Coffee Market Report September 13 2019

The coffee markets remain devoid of fundamental news, but there is continued talk about the prevailing dry weather in south east Brazil and with some now talking in terms of this continuing through to near the end of the month, which is assisting to support sentiment within the markets and has been contributing some degree of buoyancy. 

Weather conditions in Vietnam have been conducive to the steady development of the new crop, which is due to start being harvested at the end of the rain season, during the coming month. With forecasts generally indicating a larger new crop, but with some making comment about the fact that many farmers have been replacing aged coffee trees with alternative fruit and nut trees, which might limit the increase in the volume of the new crop. 

The November to December contracts arbitrage between the London and New York markets broadened yesterday; to register this at 43.23 usc/Lb.   This equates to 41.73% 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 8,029 bags yesterday; to register these stocks at 2,316,538 bags.  There was meanwhile a larger in number 12,084 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,474 bags. 

The commodity markets encountered some softening of the US Dollar and were mixed in trade yesterday, to see the overall macro commodity index taking an upside track for the day. The Natural Gas, Cocoa, New York arabica Coffee, Cotton, Copper, Wheat, Corn, Soybean and Gold markets ended the day on a positive note, while the Oil, Sugar, London robusta Coffee, Orange Juice and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.94% higher; to see this index registered at 392.56.   The day starts with the U.S. Dollar near to steady and trading at 1.235 to Sterling, at 1.107 to the Euro and with the US Dollar buying 4.06 Brazilian Real. 

The London and New York markets started the day yesterday trading on a softer note, but with the New York market remaining closer to par and with both markets taking a softer track into the early afternoon trade. As the afternoon progressed the London market came under further pressure and dipped deeper into negative territory, before bouncing back from the lows and joining the New York market to trade close to par. The London market did however come under further pressure and move back into negative territory, while the New York market attracted late in the day support and ended the day on the positive side of par. 

The London market ended the day on a negative note and with 31.8% of the earlier losses of the day intact, while the New York market ended the day on a modest positive note and with 44.4% of the earlier gains of the day intact. This close provides little in the way of direction and is likely to set the markets for a hesitant 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    1314 – 7                                                            SEP    100.35 + 0.20

NOV   1331 – 7                                                            DEC    103.60 + 0.20 

JAN    1356 – 6                                                            MAR   107.15 + 0.25 

MAR   1383 – 4                                                            MAY   109.45 + 0.25

MAY   1409 – 4                                                            JUL    111.65 + 0.30

JUL    1436 – 3                                                            SEP    113.65 + 0.30

SEP    1463 – 2                                                            DEC   116.65 + 0.30

NOV   1491 – 1                                                            MAR   119.60 + 0.20

JAN    1518 – 1                                                            MAY   121.55 + 0.20

MAR   1542 – 1                                                            JUL    123.40 + 0.20