Coffee Market Report January 24 2020

The United States Department of Agriculture (USDA) has revised its coffee production figures for Indonesia for the October 2019 to September 2020 coffee year to be 10.7 million bags with the gain split evenly between Arabica and Robusta output. Robusta production is expected to reach 9.5 million bags on favorable growing conditions in the lowland areas of Southern Sumatra and Java, where approximately 75 percent is grown. Despite heavy rainfall in West Java that delayed its Arabica harvest, output is expected up slightly. The USDA also revised its forecast to 6.3 million bags for export from Indonesia in the October 2019 to September 2020 coffee year. 

The USDA reported that Coffee production in Indonesia for the October 2018 to September 2019 coffee year was 10.6 million bags. Indonesia exported 4.91 million bags of coffee in the October 2018 to September 2019 coffee year. 

The March to March contracts arbitrage between the London and New York markets broadened yesterday; to register this at 50.60 usc/Lb.  This equates to 44.94 % 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 2,414 bags yesterday; to register these stocks at 2,145,447 bags, with 88.9% of these certified stocks being held in Europe at a total of 1,908,057 bags and the remaining 11.1% being held in the USA at a total of 237,390 bags.  There was meanwhile a larger in number decrease by 20,866 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 103,318 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Coffee, Wheat, Corn and Gold markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Soybean and Silver markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.4407% lower; to see this index registered at 414.4845   The day starts with the U.S. Dollar steady, trading at 1.312 to Sterling, at 1.105 to the Euro and with the US Dollar buying 4.173 Brazilian Real. 

The London and New York markets started the day yesterday trading close to par on a modest positive note, both markets maintained this modest positive stance into the arly afternoon trade. As the afternoon progressed both the London and the New York markets started to attract buying support to move deeper into positive territory towards the days close. 

The London market ended the day on a positive note and with 90.91% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 59.26% of the earlier gains of the day intact.  This positive close might assist towards some degree of confidence and to set the markets for near to steady hesitant start for early trade today, against the prices yesterday, as follows:   

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

MAR   1367 + 30                                                                   MAR   112.60 + 1.60

MAY   1374 + 23                                                                   MAY    114.80 + 1.55

JUL    1391 + 22                                                                   JUL     117.05 + 1.55

SEP    1409 + 22                                                                  SEP     119.15 + 1.60

NOV   1427 + 22                                                                   DEC    121.80 + 1.50

JAN    1445 + 22                                                                   MAR   124.40 + 1.50

MAR   1463 + 18                                                                   MAY   125.65 + 1.45

MAY   1486 + 18                                                                   JUL    126.80+ 1.45

JUL    1410 + 19                                                                   SEP    127.90 + 1.40