Coffee Market Report October 10 2019

The Brazil coffee exporters association Cecafé have reported that the green coffee exports for the month of September were up by 2.28% compared to the same month last year, to total 2.90 million bags. This is well illustrated by the report’s indication that Brazil’s cumulative coffee exports for the first eight months of this year are 30% higher than the same period last year, at a total of 27.37 million bags. 

The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of August were 140,232 bags or 40.19% higher than the same month last year, at a total of 489,184 bags. This has contributed to the country’s cumulative coffee exports for the first eleven months of the present October 2018 to September 2019 coffee year to have been 67,147 bags or 1.67% higher than the same period in the previous coffee year, at a total of 4,078,069 bags. 

The December to January contracts arbitrage between the New York and London markets narrowed yesterday; to register this at 37.39 usc/Lb.  This equates to 39.17% 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 3,396 bags yesterday; to register these stocks at 2,245,457 bags.  There was a larger in number increase to the number of bags pending grade to this exchange, by 7,865 bags; to register these pending grading stocks at 60,431 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, Cotton, Soybean, Gold and Silver markets ended the day on a positive note, the Wheat market remained unchanged for the day, while the Sugar, Cocoa, Coffee, Copper, Orange Juice and Corn markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.128% lower; to see this index registered at 394.657.   The day starts with the U.S. Dollar marginally firmer and trading at 1.222 to Sterling, at 1.098 to the Euro and with the US Dollar buying 4.106 Brazilian Real. 

The London and New York markets started the day yesterday trading marginally south of par, both markets showed signs of buoyancy to trade modestly firmer into early afternoon trade. As the afternoon progressed the markets continued to take a firmer and mostly sideways track but to encounter selling pressure and drop back from the modest highs of the day and take a softer track for the late afternoon trade. 

The London market ended the day on a modest soft note, and with 11% of the earlier losses of the day intact, while the New York market ended the day on a likewise soft note, and with 38.5% of the earlier losses of the day intact. This marginally softer close is unlikely to inspire confidence and one would think the markets are due little better than a cautious and hesitant start for early trade today, against the prices set yesterday, as follows:   

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

NOV   1258 – 1                                                       DEC      95.45 – 0.25

JAN    1280 – 2                                                       MAR     99.10 – 0.25

MAR   1305 – 2                                                       MAY   101.40 – 0.25

MAY   1331 – 3                                                       JUL    103.60 – 0.25

JUL    1357 – 4                                                       SEP    105.65 – 0.20

SEP    1384 – 3                                                       DEC   108.60 – 0.15

NOV   1411 – 3                                                       MAR   111.45 – 0.10

JAN    1439 – 2                                                       MAY   113.20 – 0.10

MAR   1469 – 2                                                       JUL    114.95 – 0.05