Coffee Market Report August 01 2019

The Indonesian government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of July were 174,203 bags or 47.07% lower than the same month last year, at a total of 195,917 bags.  This contributes to the islands cumulative robusta coffee exports for the first ten months of the present October 2018 to September 2019 coffee year to be 224,577 bags or 13.61% lower than the same period in the previous coffee year, at a total of 1,425,622 bags. 

There remains for the present price resistance on the part of the farmers for their new crop robusta coffee stocks, which continues to retard export volumes.  Fortunately for the farmers, the country has a vibrant and less price sensitive domestic coffee market, which one would speculate can for the short term, offer some more profitable prices for their rising new crop coffee stocks. 

The Ivory Coast as west Africa’s leading robusta coffee producer, have reported that their coffee exports for the month of June were 86,200 bags or 82.63% higher than the same month last year, at a total of 190,517 bags.  This has contributed to their country’s cumulative coffee exports for the first six months of 2019 to be 211,083 bags or 40.05% higher than the same period last year, at a total of 738,083 bags.  These export numbers for the first half of the year would indicate that the country is well on track to meet the targeted export figure for the year of 1.1 million bags and might in fact with six months to go, well exceed this number. 

The November to December contracts arbitrage between the London and New York markets broadened yesterday; to register this at 41.29 usc/Lb.   This equates to 39.97% 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 6,306 bags yesterday; to register these stocks at 2,355,884 bags.  There was meanwhile a smaller in number 6,077 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,916 bags. 

The commodity markets were mixed in trade yesterday but with many markets tending softer for the day, to see the overall macro commodity index on a modest negative track for the day. The Natural Gas, Sugar, New York arabica Coffee, Cotton and Orange Juice ended the day on a positive note, while the Oil, Cocoa, London robusta Coffee, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.27% lower; to see this index registered at 395.27.   The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.212 to Sterling, at 1.105 to the Euro and with the US Dollar buying 3.813 Brazilian Real. 

The London and New York markets started the day yesterday on a softer note and to see the markets retain this stance, into the early afternoon trade. As the afternoon progressed the London market continued to remain under pressure and moved deeper into negative territory, while the New York market attracted support and recovered to trade in positive territory. However, in later trade the New York market fell back from the highs of the day, while the London market managed to bounce back from its lows of the day. 

The London market ended the day on a negative note and with 57.7% of the earlier losses of the day intact, while the New York market ended the day on a modest positive note and with 21.1% of the earlier gains of the day intact. This close and with a softer Brazil Real in play is unlikely to inspire confidence and one would think to see only a hesitant steady start due for early trade today against the prices set yesterday, as follows: 

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

SEP    1338 – 16                                             SEP      99.65 + 0.15

NOV   1367 – 15                                             DEC    103.30 + 0.20

JAN    1394 – 14                                             MAR   107.05 + 0.25

MAR   1421 – 14                                             MAY   109.40 + 0.25

MAY   1449 – 13                                             JUL    111.55 + 0.25

JUL    1478 – 11                                             SEP    113.65 + 0.25

SEP    1504 – 9                                               DEC   116.70 + 0.20

NOV   1529 – 8                                                MAR   119.70 + 0.20

JAN    1554 – 8                                               MAY   121.65 + 0.20

MAR   1573 – 8                                               JUL   123.45 + 0.20