Coffee Market Report September 27 2019

Weather reports from Brazil indicate fair rains have fallen over most of the main coffee districts in recent days and with these due to tail off over the weekend, which should trigger flowerings for the new crop, for the coming week. Further rains are forecast to return during the second week of October, which would both trigger further flowerings and set the results of the coming week’s flowerings. Should this be the case, it is likely to inspire continued bearish sentiment of the speculative sector of the market. 

Reuters have reported that internal coffee trade in Vietnam is quiet as traders await the new crop season due to begin next week and peak around mid-November, while farmers current crop season stocks have almost been depleted. 

The November to December contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 41.25 usc/Lb.  This equates to 40.90% 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 12,410 bags yesterday; to register these stocks at 2,283,842 bags.  There was a smaller in number decrease to the number of bags pending grade to this exchange, by 914 bags; to register these pending grading stocks at 29,500 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Oil, Natural Gas, Cocoa, London Robusta Coffee, Orange Juice and Wheat markets ended the day on a positive note, while the Sugar, New York Arabica Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.196% lower; to see this index registered at 394.78.   The day starts with the U.S. Dollar steady and trading at 1.233 to Sterling, at 1.092 to the Euro and with the US Dollar buying 4.171 Brazilian Real. 

The London and New York markets started the day trading around par and taking a steady track, into the early afternoon trade. As the afternoon progressed both markets started to attract some value and show some buoyancy, but to tail off and end the day close to par. 

The London market ended the day on a steady note, but with only 35.7% of the earlier gains of the day intact, while the New York market ended the day on a likewise steady note and with 11.1% of the earlier losses of the day intact. This close provides little in the way of direction and is likely to set the markets for a hesitant steady start for early trade today, against the prices set yesterday, as follows:   

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

NOV   1314 + 5                                                     DEC    100.85 – 0.10

JAN    1332 + 1                                                     MAR   104.35 – 0.10

MAR   1358 + 1                                                     MAY   106.60 – 0.10

MAY   1384 + 1                                                     JUL    108.65 – 0.15

JUL    1410 + 1                                                     SEP    110.55 – 0.15

SEP    1436 + 1                                                     DEC   113.35 – 0.25

NOV   1462 + 1                                                     MAR   116.15 – 0.30

JAN    1488 Unch                                                 MAY   118.05 – 0.30

MAR   1512 Unch                                                 JUL    119.85 – 0.35