Coffee Market Report January 10 2020

The international Coffee Organisation (ICO) widened its forecast for a global coffee deficit in the October 2019 to September 2020 coffee year to 626,000 bags, 24.7% higher than the previous forecast of 502,000 bags, while not large considering last season’s 3.7 million bag surplus, Global production is forecast to fall by 0.9% to 168.71 million bags with Global consumption forecast to climb by 0.7% to 169.34 million bags. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 56.66 usc/Lb.  This equates to 48.28% 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 15,236 bags yesterday; to register these stocks at 2,061,311 bags, with 88.4% of these certified stocks being held in Europe at a total of 1,822,765 bags and the remaining 11.6% being held in the USA at a total of 238,546 bags.  There was meanwhile a smaller in number increase by 8,014 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 186,127 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Sugar, Cocoa, Cotton and Wheat markets ended the day on a positive note, the Oil markets remained unchanged on the day, while the Natural Gas, Coffee, Copper, Orange Juice, Corn, 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 0.0020% lower; to see this index registered at 418.5577   The day starts with the U.S. Dollar steady, trading at 1.308 to Sterling, at 1.111 to the Euro and with the US Dollar buying 4.094 Brazilian Real. 

The London and New York markets started the day yesterday trading close to par on a modest negative note, both markets maintained this modest soft stance into the early afternoon trade. As the afternoon progressed both the London and the New York markets gained buying support to move into modest positive territory only to drop back and set the markets on a soft track for the remainder of the afternoon trade. Both markets closed near to the lows of the day. 

The London market ended the day on a negative note, and with 88.8% of the earlier losses of the day intact, while the New York market ended the day on likewise negative note, and with 83.7% of the earlier losses of the day intact. This soft and lacklustre close does little to inspire confidence and one might expect the markets are due for little better than a hesitant steady start for early trade today, against the prices set yesterday, as follows:   

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

MAR   1338 – 16                                                             MAR   117.35 – 1.80

MAY   1356 – 16                                                             MAY   119.70 – 1.75

JUL    1374 – 16                                                             JUL     122.00 – 1.70

SEP    1393 – 17                                                             SEP     124.05 – 1.65

NOV   1412 – 16                                                              DEC    126.70 – 1.60

JAN    1429 – 15                                                              MAR   129.05 – 1.65

MAR   1450 – 15                                                              MAY   130.10 – 1.65

MAY   1473 – 15                                                              JUL    130.95 – 1.65

JUL    1594 – 15                                                              SEP    131.75 – 1.65