Coffee Market Report September 05 2019

The markets remained devoid of fundamental supportive news yesterday, with the perspective of more than adequate global coffee supply continuing to dominate speculative bearish sentiment and keeping the markets within the prevailing soft trading range. One might speculate though with the small deficit global coffee supply due for the forthcoming new October 2019 to September 2020 coffee year and with the added potential for an approximate 3 million bags increase in global coffee consumption over this coming coffee year, that there could be some degree of market buoyancy due by the end of the year. 

The November to December contracts arbitrage between the London and New York markets broadened yesterday; to register this at 37.18 usc/Lb.   This equates to 38.49% price discount for the London Robusta coffee market. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 2,329,092 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 17,233 bags. 

The commodity markets were mostly on the up side yesterday against US Dollar weakness, to see the overall macro commodity index taking an upside track for the day. The Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Soybean, Gold and Silver markets ending the day on a positive note, while the Sugar and Corn markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.4% higher; to see this index registered at 389.99.   The day starts with the U.S. Dollar steady and trading at 1.224 to Sterling, at 1.103 to the Euro and with the US Dollar buying 4.095 Brazilian Real. 

The London and New York markets started the day yesterday trading on a positive note, but with the New York market remaining close to par and with the markets maintaining this track, into the early afternoon trade. As the afternoon progressed and with some support forthcoming from renewed muscle for the Brazil Real, both markets started to attract buy stops and increased their gains. The London market did however soon hit a ceiling and fell back towards par for late trade, while the New York market managed to hold onto a fair percentage of the gains for the day. 

The London market ended the day on a modestly positive note and with 31.6% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 75% of the earlier gains of the day intact. This close and with a firmer Brazil Real in play is likely to inspire a follow through steady start for early trade today, against the prices set yesterday, as follows:  

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

SEP    1288 + 6                                                        SEP      93.40 + 1.05

NOV   1310 + 6                                                        DEC      96.60 + 1.05 

JAN    1332 + 4                                                        MAR   100.05 + 1.05 

MAR   1355 + 4                                                        MAY   102.30 + 1.00

MAY   1378 + 1                                                        JUL    104.40 + 1.05

JUL    1403 + 1                                                        SEP    106.35 + 1.00

SEP    1430 + 1                                                        DEC   109.35 + 1.05

NOV   1457 + 1                                                        MAR   112.30 + 1.05

JAN    1484 + 1                                                        MAY   114.30 + 1.05

MAR   1508 + 1                                                        JUL    116.25 + 1.05