Coffee Market Report December 04 2019

The International Coffee Organisation ICO have reported that world coffee exports for the month of October were 13.4% lower than the same month last year, at a total of 8.91 million bags. These exports related to a 9.0% decrease in arabica coffee exports and a 21.6% decrease in robusta coffee exports, with the ratio of 68 to 32 of arabica and robusta coffee exports. The deficit primarily driven by a lower export performance by leading exporters Brazil and Vietnam, whereas Colombia washed arabicas registered an increase in exports over the same month. 

The Brazil government have reported that the country’s coffee exports for the month of November were 600,400 bags or 15.41% lower than the same month last year, at a total of 3,293,500 bags. The large decrease in reported exports for this month compared to the larger biennial bearing production in 2018 coffee year, to similarly reflect the increased exports of Conilons robustas, to consumer markets over the same month in the previous year. 

The National Coffee Institute of Costa Rica have reported that the country’s coffee exports for the month of November were 30% lower than the same month last year, at a total of 15,796 bags. This they say has contributed to the cumulative coffee exports for the first two months of the present October 2019 to September 2020 coffee year to be 40% lower than the same period in the previous coffee year, at a total of 25,627 bags. 

The March to March contracts arbitrage between the London and New York markets broadened yesterday; to register this at 59.75 usc/Lb.  This equates to 48.26% 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 25,380 bags yesterday; to register these stocks at 2,056,348 bags, with 87.3% of these certified stocks being held in Europe at a total of 1,794,877 bags and the remaining 12.7% being held in the USA at a total of 261,471 bags.  There was a smaller in number increase to the number of bags pending grade to this exchange, by 11,763 bags; to register these pending grading stocks at 52,998 bags. 

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 44,333 bags over the weeks of trade leading up to Monday 2nd December, to see these stocks registered at 2,550,333 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 Oil, Sugar, Cocoa, Coffee, Orange Juice, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Cotton, Copper, Wheat and Corn markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.5091% higher; to see this index registered at 403.096.   The day starts with the U.S. Dollar steady, trading at 1.299 to Sterling, at 1.107 to the Euro and with the US Dollar buying 4.205 Brazilian Real. 

The London and New York markets started the day yesterday trading around par, both markets maintained this modest soft stance into the early afternoon trade. As the afternoon progressed Both the London and New York markets started to attract buying support to move into positive territory for the day. The London market hit a ceiling a dropped back from the highs of the day to close on a modest positive note, while the New York market continued its upward trend to close near the highs of the day. 

The London market ended the day on a positive note, and with 11.1% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, and with 65.45% of the earlier gains of the day intact. This close, might inspire some degree of confidence. To possibly set the markets for another hesitant steady start for early trade today, against the prices set yesterday, as follows:   

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

JAN    1392 + 4                                                             MAR   123.80 + 1.80

MAR   1412 + 2                                                             MAY   126.05 + 1.80

MAY   1428 + 4                                                             JUL    127.90 + 1.75

JUL    1445 + 4                                                             SEP    129.50 + 1.70

SEP    1463 + 4                                                             DEC   131.45 + 1.80

NOV   1484 + 4                                                             MAR   133.40 + 1.75

JAN    1505 + 4                                                             MAY   134.70 + 1.70

MAR   1528 + 4                                                             JUL    135.90 + 1.65

MAY   1550 + 4                                                             SEP    137.20 + 1.60