Coffee Market Report September 19 2019

While the new crop coffee marketing year and new crop coffee harvests are set to begin in the coming six weeks or so for many coffee producer countries, the current October 2018 to September 2019 coffee year is drawing to a close. One might anticipate that finalised production and export statistics for the current 2018/19 coffee year, will soon start to flow to the markets. The coffee markets are meanwhile generally devoid of fresh fundamental news to guide direction. The focus primarily set on the circumstances of climatic conditions within the two largest coffee producers; in Brazil the approaching spring and summer rain season; and in Vietnam, the end to the rain season for soon to be required drier weather, ahead of the new robusta coffee harvest to start next month.

The November to December contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 40.52 usc/Lb. This equates to 40.37% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,172 bags yesterday; to register these stocks at 2,312,845 bags. There was meanwhile a larger in number 4,772 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 21,547 bags.

It was a mixed day on the commodity markets yesterday, the Oil markets registered another softer day while the anticipated US Federal Reserve Bank announcement of an interest rate confirmed, the US Dollar gained ground against a basket of other major currencies. It was a softer day for Oil markets, Sugar, Cotton, Copper, Orange Juice, Soybean, Gold, Silver, Platinum and Palladium markets. The Coffee markets were relatively steady and a positive close for Cocoa, Wheat and Corn markets on the day. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.321% lower; to see this index registered at 394.97. The day starts with the U.S. Dollar steady and trading at 1.246 to Sterling, at 1.103 to the Euro and with the US Dollar buying 4.11 Brazilian Real.

The London and New York markets started the day on a mildly positive note albeit in muted volume at the outset. Both markets held on a narrowly positive range as the morning progressed, with additional buying activity providing a boost in New York toward midsession as the America’s came to the floor to start their business day. An upward trend in London followed the New York track, which met with sellers waiting overhead in both markets and the trend drifted back toward unchanged. The New York market slipped back to par to break through into negative territory as the afternoon progressed and a degree of consolidation in New York in relatively modest volume to see this market finish the day mostly unchanged on the lower end of the days trading range. The volumes were comparatively thin in London which market remained above par for the latter half of the session and a finish on the day in the middle of the days range on a narrowly positive note, to set the close in both markets yesterday, as follows:

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

SEP   1302 + 6                       SEP   96.85 Unch
NOV  1319 + 6                       DEC 100.35 Unch
JAN   1345 + 5                       MAR 103.95 Unch
MAR  1372 + 5                      MAY  106.25 – 0.05
MAY  1399 + 5                       JUL   108.30 – 0.10
JUL    1424 + 5                      SEP  110.15 – 0.15
SEP   1451 + 5                      DEC  113.00 – 0.20
NOV  1473 + 5                      MAR  115.85 – 0.25
JAN   1505 + 5                      MAY  117.75 – 0.25
MAR  1529 + 5                      JUL   119.55 – 0.30