Coffee Market Report August 29 2019

The General Statistics Office in Vietnam have estimated that the countries coffee exports for the month of August shall be approximately 2.17 million bags which they say shall contribute to the countries cumulative exports for the first eight months of this year to be 10.3% lower than the same period last year, at a total of 19.83 million bags. 

It is noted though that with approximately 95% of the last harvest having been made up by robusta coffees and with internal market price resistance having made Vietnam robusta coffees relatively expensive, that many consumer market roasters have been taking advantage of some alternative origin coffees. In this respect and while many north west European roasters are not friendly towards the cup profile of Brazil conilon robusta coffees, there have been many roasters in North America, eastern Europe and some other markets, who have been taking advantage of the alternative of price competitive new crop Brazil conilon coffees. 

This opportunity to supplement Vietnam robusta coffees with Brazil conilon robusta coffees coming to the fore,following a significantly larger new conilon robusta coffee crop this year, which many appropriate to have been approximately 6 million bags or 47% larger than the previous crop. 

The November to December contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 36.27 usc/Lb.   This equates to 37.18% 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 4,851 bags yesterday; to register these stocks at 2,349,249 bags.  There was meanwhile a smaller in number 1,070 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 7,458 bags. 

The commodity markets were mostly showing some degree of buoyancy in trade yesterday, to see the overall macro commodity index on an upside track for the day. The Oil, Natural Gas, Sugar, Coffee, Cotton, Orange Juice, Corn, Soybean and Silver markets ended the day on a positive note, while the Cocoa, Wheat and Gold markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.05% higher; to see this index registered at 383.83.   The day starts with the U.S. Dollar steady and trading at 1.221 to Sterling, at 1.108 to the Euro and with the US Dollar buying 4.169 Brazilian Real. 

The London market started the day yesterday trading on a positive note and the New York market showing modest buoyancy around par, but with the London market soon attracting further support and making significant gains, with the New York market moving up into positive territory in a less aggressive manner. As the afternoon progressed the London market came back off the highs and the New York market moved back into modest negative territory, but to bounce back off the lows in late trade and to see both markets ending the day on a modestly positive note. 

The London market ended the day on a positive note and with 41.4% of the earlier gains of the day intact, while the New York market ended the day on a positive note, and with 40% of the earlier gains of the day intact. This positive close whilst it might inspire some degree of confidence is accompanied by a weaker start for the Brazil Real for the day, which might inspire the perception for increased Brazil selling activity due and set the markets for only a near to steady start for early trade today, against the prices set yesterday, as follows:  

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

SEP    1328 + 12                                                 SEP      93.80 + 0.40

NOV   1351 + 12                                                 DEC      97.15 + 0.40 

JAN    1371 + 10                                                 MAR   100.75 + 0.30 

MAR   1392 + 9                                                   MAY   103.05 + 0.30

MAY   1415 + 7                                                   JUL    105.25 + 0.25

JUL    1438 + 6                                                   SEP    107.20 + 0.25

SEP    1464 + 6                                                   DEC   110.15 + 0.20

NOV   1490 + 5                                                   MAR   113.05 + 0.30

JAN    1515 + 4                                                  MAY   115.00 + 0.40

MAR   1536 + 5                                                  JUL    116.90 + 0.40