Coffee Market Report July 04 2019

There is continued talk about the coming cold front over south east Brazil and its potential to bring with it frost for some higher districts, which might not include any of the coffee growing districts.   But with the active and influential U.S.A. based speculative and fund trade on holiday today for their countries Independence Day holiday and possibly with some taking tomorrow off to make for an extended long weekend holiday, it would appear that the New York market benefited from some precautionary pre-weekend short covering support, which was followed in a more muted manner, within the London market. 

The positive nature of the markets, assisted by the sentiment that came with some renewed muscle for the Brazil Real and the influence of the positive track, which was being taken by the overall macro commodity index.   Albeit that with the reference prices of the New York market already having recovered significantly over the recent days, one might question how much the modest recovery of the Brazil Real might actually mean. 

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 48.65 usc/Lb., while this equates to 42.81% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,453 bags yesterday; to register these stocks at 2,373,661 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 4,344 bags. 

The commodity markets took a mostly positive track in trade yesterday, to see the overall macro commodity index taking a positive track for the day.  The Oil, Natural Gas, Sugar, Coffee, Copper, Orange Juice, Wheat, Corn, Soybean, Golda and Silver markets ended the day on a positive note, while the Cocoa and Cotton markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets, is 1.11% higher, to see this index registered at 399.69.   The day starts with the U.S. Dollar steady and trading at 1.257 to Sterling, at 1.128 to the Euro and with the US Dollar buying 3.826 Brazilian Real. 

The London market started the day on a steady note yesterday and with both markets soon attracting support and moving into positive territory, with the New York market tending to show more muscle than the London market as the market took a positive track into the early afternoon trade.   As the afternoon progressed, the New York market added to its gains and with buy stops being triggered, to add value.   While the London market took a more erratic track, with overhead producer price fixation selling seemingly coming into play, to limit the gains. 

The London market ended the day on a positive note and with 47.8% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 74.8% of the earlier gains of the day intact.  This close might inspire some degree of confidence ahead of the weather threatened weekend and to assist the London market that is trading solo today, towards a steady start for early trade today, against the prices set yesterday, as follows: 

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

JUL    1424 + 14                                            JUL    112.25 + 4.00

SEP    1455 + 11                                           SEP    113.65 + 4.00

NOV   1485 + 11                                           DEC    117.35 + 4.00

JAN    1509 + 10                                           MAR   120.85 + 3.95

MAR   1534 + 11                                           MAY   123.00 + 3.95

MAY   1558 + 11                                            JUL    124.80 + 3.95

JUL    1577 + 11                                            SEP    126.50 + 3.95

SEP    1595 + 11                                            DEC   129.20 + 3.90

NOV   1610 + 11                                            MAR   132.00 + 3.90

JAN    1627 + 14                                            MAY   133.90 + 3.90