Coffee Market Report October 17 2019

The markets remain devoid of fundamental supportive news and with the prospects of a large coffee crop in top producer Brazil next season remaining a bearish influence on the markets, and the weak nature of the Brazil Real. This impacting negatively upon sentiment and resulting in the prevailing soft nature of the coffee terminal markets. 

The December to January contracts arbitrage between the New York and London markets broadened yesterday; to register this at 37.30 usc/Lb.  This equates to 39.87% 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 5,303 bags yesterday; to register these stocks at 2,245,415 bags.  There was a larger in number decrease to the number of bags pending grade to this exchange, by 7,097 bags; to register these pending grading stocks at 50,579 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, Orange Juice, Wheat, Gold and Silver markets ended the day on a positive note, while the Sugar, Cocoa, Coffee, Copper, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.045 % lower; to see this index registered at 399.698.   The day starts with the U.S. Dollar steady and showing signs of buoyancy, trading at 1.281 to Sterling, at 1.107 to the Euro and with the US Dollar buying 4.150 Brazilian Real. 

The London and New York markets started the day yesterday on a softer note, both markets encountered selling pressure which accentuated the losses for the early afternoon trade. As the afternoon progressed both the London and the New York market on the back of a weakening Brazil Real moved into deep negative territory only to recover late in the afternoon trade with the Brazil Real gaining some traction to steady after a sharp drop, to limit the losses for the day. 

The London market ended the day on a negative note, and with 46.4% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, and with 40.9% of the earlier losses of the day intact. This soft and lacklustre close does little to inspire confidence and one would expect the markets are due for little better than a near to steady start for early trade today, against the prices set yesterday, as follows:   

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

NOV   1211 – 26                                                           DEC      93.55 – 0.90

JAN    1240 – 24                                                           MAR     97.05 – 0.90

MAR   1264 – 23                                                           MAY     99.35 – 0.85

MAY   1289 – 24                                                           JUL    101.50 – 0.85

JUL    1316 – 24                                                           SEP    103.40 – 0.85

SEP    1343 – 24                                                           DEC   106.25 – 0.95

NOV   1371 – 23                                                           MAR   109.00 – 1.05

JAN    1399 – 23                                                           MAY   110.65 – 1.20

MAR   1427 – 23                                                           JUL    112.25 – 1.35