Coffee Market Report October 30 2019

The General Statistics office in Vietnam have estimated that the countries coffee exports for the month of October shall be approximately 1.67 million bags, which they say shall contribute to the countries cumulative exports for the first ten months of this year to be 13.8% lower than the same period last year, at a total of 22.75 million bags. 

Illustrating the problems producers are facing from the prevailing soft reference prices of the coffee terminal markets, the report notes that while the volume of exports for the first ten months of this year was 13.8% lower than the same period last year, they say that the value of these exports was a more extreme 28% lower than the value of the coffee exports for the same period last year. 

The December to January contracts arbitrage between the New York and London markets narrowed yesterday; to register this at 41.07 usc/Lb.  This equates to 41.51% 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 180 bags yesterday; to register these stocks at 2,240,029 bags, with 87.4% of these certified stocks being held in Europe at a total of 1,958,729 bags and the remaining 12.6% being held in the USA at a total of 281,300 bags.  There was a larger in number decrease to the number of bags pending grade to this exchange, by 2,321 bags; to register these pending grading stocks at 19,538 bags. 

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 15,000 bags over the weeks of trade leading up to Monday 28th October, to see these stocks registered at 2,642,833 bags, on the day. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a sideways track for the day. The Cocoa, Copper, Orange Juice and Corn markets ended the day on a positive note, the Oil markets remained unchanged for the day, while the Natural Gas, Sugar, Coffee, Cotton, Wheat, 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 0.0021 % higher; to see this index registered at 402.467.   The day starts with the U.S. Dollar steady, trading at 1.287 to Sterling, at 1.111 to the Euro and with the US Dollar buying 3.998 Brazilian Real. 

The London and New York markets started the day yesterday trading around par, with the London market in modest positive territory and the New York market in modest negative territory, both markets maintained this stance into the early afternoon trade. As the afternoon progressed the New York market encountered selling pressure to trade into negative territory with the London market following suit in a more sedate manner. 

The London market ended the day on a negative note, and with 25% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, and with 86% of the earlier losses of the day intact. This close, with the Brazil Real showing some degree of buoyancy one would expect a hesitant near to steady start to early trade today, against the prices set yesterday, as follows:   

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

NOV   1251 + 6                                                             DEC      98.95 – 1.55  

JAN    1276 – 1                                                             MAR   102.50 – 1.45  

MAR   1296 – 1                                                             MAY   104.70 – 1.40

MAY   1312 – 3                                                             JUL    106.85 – 1.35

JUL    1334 – 4                                                             SEP    108.65 – 1.30

SEP    1359 – 5                                                             DEC   111.30 – 1.30

NOV   1385 – 5                                                             MAR   113.95 – 1.30

JAN    1412 – 5                                                             MAY   115.50 – 1.35

MAR   1438 – 5                                                             JUL    117.05 – 1.40