Coffee Market Report July 03 2019

3rd July, 2019.

The National Coffee Institute in Honduras have reported that the countries coffee exports for the month of June registered a total of 851,719 bags, marginally lower than that in the same month last year.   This has contributed to the country’s cumulative coffee exports for the first nine months of the present October 2018 to September 2019 coffee year to be 4% lower than the same period in the previous coffee year, at a total of 5,521,863 bags. 

The National Coffee Institute in Costa Rica have reported that the countries coffee exports for the month of June registered 136,112 bags or 18% lower than the same month last year.   This has contributed to the country’s cumulative coffee exports for the first nine months of the present October 2018 to September 2019 coffee year to be 13% lower than the same period in the previous coffee year, at a total of 858,505 bags.

The International Coffee Organisation ICO have reported that global coffee exports for the month of May were 19.40% higher than the same month last year, at a total of 11.60 million bags.  This they say has contributed to global coffee exports for the first eight months of the present October 2018 to September 2019 coffee year to be 7.5% higher than the same period in the previous coffee year, at a total of 86.57 million bags.

The Brazil Government export data for the month of June has reported that the countries coffee exports for the month were 643,476 bags or 29.83% higher than the same month last year, at a total of 2,800,839 bags.  This monthly export data has been released in combination with other major commodities exported from Brazil over the month of June.  This, ahead of the monthly breakdown of specifically detailed coffee exports, the percentages of arabica, conilon robusta and soluble value-add products that have been exported to the consumer markets are pending publication. 

The Brazil national weather service Inmet, has issued a forecast overnight to confirm that low temperatures are due to come to Minas Gerais and Sao Paulo as the weekend approaches. The forecasts are for overnight temperatures to touch between 4 and 6ºC and the likelihood of frost is mentioned in the report, however the report goes on to say that stronger occurrences are expected in mountainous regions away from the coffee growing areas.  Thus the progress and development of the prevailing cooler weather system that is forecast to be moving through the southern Santa Catarina where no coffee is grown, will continue to be monitored.

The September to September contracts arbitrage between the London and New York markets narrowed slightly yesterday, to register this at 44.15 usc/Lb., while this equates to 40.26% 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 250 bags yesterday; to register these stocks at 2,370,208 bags.  The number of bags pending grading to the exchange were unchanged on the day; to register these pending grading stocks at 4,344 bags.

It was a mixed and overall softer day for the commodity markets yesterday, the latest round of economic data and concerns that the global economy could be slowing weighed on sentiment as did news of another round of tariff negotiations between two leading consumer blocs, EU and USA.  The US Dollar index dipped on the day.  It was a soft day for the Oil markets, Sugar, Cocoa, Coffee, Copper, Orange Juice, Wheat, Soybean, and Platinum.  The few commodity markets to finish the day in positive territory were Cotton, Corn, Silver and Palladium markets, as well as safe haven Gold. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 0.17% lower, to see this index registered at 395.29.  The day starts with the U.S. Dollar steady and trading at 1.258 to Sterling, at 1.128 to the Euro and with the US Dollar buying 3.84 Brazilian Real.

The coffee markets opened the day on a softer note in comparatively good volume for the early morning session in both markets.  The morning session registered a degree of underlying buyer support, to set an upward track and push both markets above par, and into positive territory. The lower overall sentiment across the commodities sector yesterday and particularly on the leading in influence Oil markets, spilled into the coffee sector toward mid session in New York and the price trend track turned to softer territory with a recovery at the lows touched but off of the days’ highs.  A similarly softer track in London for the afternoon session which touched the lows and registered a modest recovery, to register a close just above the days’ lows.  It was another hefty volume day in New York and a light volume day in London, the markets closed in negative territory yesterday, as follows:

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

JUL    1410 – 29                                            JUL    108.25 – 1.90
SEP    1444 – 30                                            SEP   109.65 – 1.70
NOV   1474 – 29                                            DEC   113.35 – 1.60
JAN    1499 – 27                                            MAR   116.90 – 1.60
MAR   1523 – 27                                            MAY   119.05 – 1.50
MAY   1547 – 26                                            JUL    120.85 – 1.50
JUL    1566 – 26                                            SEP    122.55 – 1.60
SEP    1584 – 27                                            DEC   125.30 – 1.65
NOV   1599 – 27                                            MAR   128.10 – 1.75
JAN    1613 – 28                                            MAY   130.00 – 1.85