Coffee Market Report June 28 2019

28th. June, 2019.
The weather in Brazil is reported to be fair and dry over most of the main coffee districts and this weather is conducive to the new crop harvest which is in full swing. In this respect, the analysts Safras & Mercado have forecast that around 54% of their estimated new crop total of 58.90 million bags has already been harvested. Thus, the earlier to ripen Conilon robusta areas are estimated to have completed harvest of 71% or 13 million bags, and an estimated 19 million bags of the arabica crop at this stage.

The General Statistics office in Vietnam has reported that they foresee coffee exports to register a decline of 10.60% in the first six months of this calendar year, to an estimated 15.47 million bags. The report goes on to estimate that the export revenue is likely to register a decline by 21.20% on that of the same time last year, and is forecast to reach US$ 1.58 billion over the January to June 2019 period. The lower value of the London terminal market reflected in the decline in revenue for this largest exporter of robusta coffees to consumer markets and with June export figures still to be confirmed this month is estimated to reach 2.5 million bags of exports, valued at US$ 250 million.

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.83 usc/Lb., while this equates to 39.21% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,816 bags yesterday; to register these stocks at 2,379,349 bags. There was an increase of 1,210 bags in the number of bags pending grading for the exchange; to register these pending grading stocks at 4.344 bags yesterday.

It was a mixed and mostly flat day on the commodity markets yesterday, ahead of the usual round of month end data and the G20 summit underway, with the tariff and trade discussion sideline meetings making the business news headlines. It was a steady day for the US Dollar, the Oil markets little changed and a softer day for Cocoa, Cotton, Corn, Soybean, Gold, Silver and Platinum markets. A positive finish for Sugar, and mildly positive day for Copper, Orange Juice and Wheat markets. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 0.032% lower, to see this index registered at 397.43. The day starts with the U.S. Dollar steady and trading at 1.267 to Sterling, at 1.136 to the Euro and with the US Dollar buying 3.819 Brazilian Real.

The London Market opened in mildly softer territory yesterday, New York started the day on a positive track gaining upward momentum in the early morning session. London retraced a recovery to par and into mildly positive territory and both markets in relatively modest volume positioned within a narrowly positive trading range through the morning and into the afternoon, in both markets. The session continued in steady and comparatively light volume toward the end of the session when London pushed through par into softer territory to settle just below par, and so too a steady note in New York to finish around the middle of the days trading range, and set the close yesterday, as follows:

LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.

JUL   1398 – 4        JUL 105.55 + 0.65
SEP  1430 – 4        SEP 106.70 + 0.65
NOV 1459 – 2        DEC 110.10 + 0.70
JAN  1483 – 3        MAR 113.85 + 0.65
MAR 1506 – 3        MAY 115.95 + 0.70
MAY 1530 – 3        JUL 117.80 + 0.70
JUL   1549 – 3       SEP 119.65 + 0.70
SEP 1568 – 3        DEC 122.50 + 0.70
NOV 1583 – 3        MAR 125.35 + 0.55
JAN 1598 - 3         MAY 127.35 + 0.55