Coffee Market Report July 17 2019

Brazil’s and the world’s largest coffee cooperative Cooxupé have reported that with their members having already harvested 66.4% of their new crop coffees as at Friday last week, that this is the quickest harvest that they have experienced over at least the last eight years.  They meanwhile with the new crop harvest peaking, have estimated the with the expectations of a smaller Brazil arabica coffee crop this year, that their members shall bring in a 9.2% smaller crop this year, which they foresee to be approximately 7.6 million bags. 

Brazil is due to experience a few days of colder weather this week, but most foresee that this is not going to be frost threatening weather and this seemingly had its impact upon speculative sentiment within the volatile New York market yesterday, which experienced a later in the day sell off.  Followed in a more sedate manner, by selling pressure within the London market.   

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.00 usc/Lb., while this equates to 39.79% 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 3,034 bags yesterday; to register these stocks at 2,364,214 bags.  There was meanwhile a larger in number 12,140 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 12,140 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 34,167 bags or 1.58% over the week of trade leading up to Monday 15th. July, to see these stocks registered at 2,197,000 bags, on the day. 

The commodity markets and with the U.S. dollar experiencing some renewed muscle were mostly on the back foot yesterday, to see the overall macro commodity index taking a softer track for the day.   The Cocoa, Orange Juice and Silver markets ended the day on a positive note and the Wheat market was near to steady for the day, while the Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Corn, Soybean and Gold markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.69% lower; to see this index registered at 398.25.   The day starts with the U.S. Dollar steady and trading at 1.241 to Sterling, at 1.121 to the Euro and with the US Dollar buying 3.768 Brazilian Real. 

The London and New York markets started the day yesterday trading to the south of par and with the New York market soon attracting added selling pressure, to see both markets taking a negative track into the early afternoon trade.   As the afternoon progressed and with the Americas entering the field of play, the New York market attracted more selling pressure and with sell stops being triggered, to accentuate the gains.   Followed by the London market, that took a more sedate track south. 

The London market ended the day on a very negative note and with 89.2% of the earlier losses of the day intact, while the New York market ended the day on a likewise very negative note and with 97.9% of the earlier losses of the day intact.   This soft close is unlikely to inspire confidence and one might expect to see little better than a near to steady start due for early trade today, against the prices set yesterday, as follows:  

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

JUL    1369 – 33                                            JUL    104.10 – 4.70

SEP    1401 – 33                                           SEP    105.55 – 4.70

NOV   1431 – 33                                           DEC    109.35 – 4.65

JAN    1460 – 31                                           MAR   112.95 – 4.70

MAR   1486 – 31                                           MAY   115.25 – 4.65

MAY   1509 – 32                                            JUL    117.25 – 4.60

JUL    1531 – 34                                            SEP    119.20 – 4.60

SEP    1554 – 35                                            DEC   122.10 – 4.50

NOV   1571 – 35                                            MAR   125.00 – 4.35

JAN    1587 – 36                                            MAY   126.85 – 4.30