Coffee Market Report December 11 2019

The Coffee Exporters Association in Brazil Cecafé have reported that the countries coffee exports for the month of November were 22.1% lower than the same month last year, to total 2.8 million bags.   This they say has contributed to the country’s cumulative coffee exports for the first two months of the October 2019 to September 2020 Coffee year to be 6.12 million bags. 

The Coffee Exporters Association in Brazil Cecafé have indicated that Brazil harvested a smaller crop in 2019 when compared to the record crop in 2018 and due to this, supply of high-quality export-type coffees were smaller. The Brazil Government said that the 2019 harvest reached 49 million bags in comparison to the 2018 harvest which reached 61.6 million bags. 

The United States Department of Agriculture (USDA) has revised its coffee production figures for Vietnam  for the October 2019 to September 2020 coffee year to be 32.22 million bags, higher than the previous estimate of 30.5 million bags, this due to the ongoing expansion of Vietnams cultivation area, increasing in yield on replanted high yield trees and favourable weather conditions. The USDA maintains its forecast of 28.25 million bags for export from Vietnam in the October 2019 to September 2020 coffee year. 

The London Robusta Coffee contract for March 2020 extended its gains, up more than 5% to $1,473 per Mt, its highest-level hit since July this Year. 

The March to March contracts arbitrage between the London and New York markets broadened yesterday; to register this at 67.39 usc/Lb.  This equates to 50.56% 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 1,368 bags yesterday; to register these stocks at 2,062,187 bags, with 87.4% of these certified stocks being held in Europe at a total of 1,802,499 bags and the remaining 12.6% being held in the USA at a total of 259,688 bags.  There a smaller in number increase by 87 bags to the number of bags pending grade to this exchange; to register these pending grading stocks at 34,400 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a buoyant sideways track for the day. The Coffee, Sugar and Palladium markets ended the day on a positive note, while the Cocoa, Platinum, 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 0.8492% higher; to see this index registered at 409.3467.   The day starts with the U.S. Dollar steady, trading at 1.314 to Sterling, at 1.109 to the Euro and with the US Dollar buying 4.146 Brazilian Real. 

The London and New York markets started the day yesterday trading in positive territory, both markets maintained this positive stance into the early afternoon trade. As the afternoon progressed the London and New York markets started to attract buying support to move deeper into positive territory and accentuate the gains for the day, both  markets continued on this upward trend for the remainder of the day’s trade only to hit a ceiling and drop back from the highs of the day. 

The London market ended the day on a very positive note, and with 66.7% of the earlier gains of the day intact, while the New York market ended the day on likewise very positive note, and with 81.6% of the earlier gains of the day intact. This close albeit that both the London and the New York markets did hit a ceiling and come off their respective highs for the day, might nevertheless inspire some degree of confidence, to possibly set the markets for another hesitant follow-through steady start for early trade today, against the prices set yesterday, as follows:   

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

JAN    1490 + 81                                                            MAR   133.30 + 4.90

MAR   1453 + 52                                                            MAY   135.40 + 4.85

MAY   1463 + 49                                                            JUL    137.15 + 4.85

JUL    1474 + 45                                                            SEP    138.80 + 4.90

SEP    1491 + 43                                                            DEC   140.70 + 4.95

NOV   1509 + 42                                                            MAR   142.65 + 5.00

JAN    1532 + 43                                                            MAY   143.80 + 4.95

MAR   1556 + 42                                                            JUL    144.95 + 4.90

MAY   1578 + 42                                                            SEP    146.10 + 4.80