Coffee Market Report September 11 2019

The Brazil coffee exporters association Cecafé have reported that the green coffee exports for the month of August fell by 8.5% compared to the same month last year, to total 2.89 million bags. This does however follow three months of surging coffee exports, which have buoyed consumer market inventories with Brazil past and new crop coffees. This is well illustrated by the report’s indication that Brazil’s cumulative coffee exports for the first eight months of this year are 33% higher than the same period last year. 

The November to December contracts arbitrage between the London and New York markets broadened yesterday; to register this at 41.41 usc/Lb.   This equates to 40.76% 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 5,739 bags yesterday; to register these stocks at 2,332,282 bags.  There was meanwhile a 6,010 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 10,920 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 16,000 bags or 0.63% over the week of trade leading up to Monday the 9th. of September, to see these stocks registered at 2,572,000 bags, on the day. 

The commodity markets were mixed in trade yesterday, to see the overall macro commodity index showing a degree of buoyancy for the day. The Oil, Coffee and Corn markets ended the day on a positive note, while the Sugar and Cocoa markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.62% higher; to see this index registered at 389.86.   The day starts with the U.S. Dollar near to steady and trading at 1.236 to Sterling, at 1.105 to the Euro and with the US Dollar buying 4.081 Brazilian Real. 

The London market started the day yesterday trading around par and with the New York market showing some modest buoyancy and with the London market soon joining the New York market in positive territory and to see both markets taking a positive track, into the early afternoon trade. As the afternoon progressed the New York market started to attract increased support and with buy stops being triggered, to accentuate the gains. This sharp positive correction was very soon followed by a similar but less aggressive positive move within the London market and with both markets taking a positive sideways track for the rest of the day’s trade. 

The London market ended the day on a positive note and with 71.9% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 83.7% of the earlier gains of the day intact. This close is not supported by any fundamental news and one would think is more of a technical correction, but it is evident that consumer industries in general, do need to cover good volumes of medium-term requirements. This might assist to inspire a follow through cautious and hesitant steady start for early trade today, against the prices set yesterday, as follows:   

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

SEP    1305 + 23                                                           SEP      98.35 + 3.35

NOV   1327 + 23                                                           DEC    101.60 + 3.35 

JAN    1349 + 24                                                           MAR   105.00 + 3.35 

MAR   1373 + 25                                                           MAY   107.30 + 3.40

MAY   1399 + 25                                                           JUL    109.40 + 3.40

JUL    1425 + 25                                                           SEP    111.35 + 3.40

SEP    1451 + 25                                                           DEC   114.35 + 3.50

NOV   1477 + 25                                                           MAR   117.30 + 3.50

JAN    1504 + 25                                                           MAY   119.30 + 3.50

MAR   1528 + 25                                                           JUL    121.20 + 3.50