Coffee Market Report January 31 2020

The Vietnamese have returned yesterday from their week-long Tet New Year celebrations, which brought in the new Year of the Rat on Saturday 25th. January.  This with the possibility of some catch up price fixation selling activity, it likely to bring some more activity to the London market in the coming week, once the countries traders have settled back into their daily commercial routine. 

March Arabica Coffee KCc1 settled lower by 0.5% at 101.50 US cents per lb, bouncing back from an earlier in the session near three month low of 100.90 US cents per lb. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 42.35 usc/Lb.  This equates to 41.72 % 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 8,496 bags yesterday; to register these stocks at 2,179,162 bags, with 89.3% of these certified stocks being held in Europe at a total of 1,945,112 bags and the remaining 10.7% being held in the USA at a total of 234,050 bags.  There was meanwhile a smaller in number decrease by 4,930 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,151 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, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn and Soybean markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.6136% lower; to see this index registered at 399.9728   The day starts with the U.S. Dollar steady, trading at 1.310 to Sterling, at 1.102 to the Euro and with the US Dollar buying 4.244 Brazilian Real. 

The London market started the day yesterday trading on close to par on a modest negative note, while the New York market started the day yesterday trading close to par on a modest negative note, both markets retained their respective stance into the early afternoon trade. As the afternoon progressed both the London and the New York markets encountered selling pressure to drop into negative territory only to hit a price floor and bounce back from the lows of the days to settle on a modest negative note in New York and a very modest positive note in London. 

The London market ended the day on a modest 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 negative note and with 47.83% of the earlier losses of the day intact.  This mixed soft close does little to inspire confidence and with the Brazil Real slipping once again yesterday 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   1304 + 1                                                                      MAR  101.50 – 0.55

MAY   1315 – 2                                                                      MAY   103.65 – 0.60

JUL    1335 – 1                                                                      JUL    105.95 – 0.60

SEP    1355 unch                                                                  SEP    108.00 – 0.60

NOV   1374 – 1                                                                      DEC    110.75 – 0.65

JAN    1391 – 1                                                                      MAR   113.60 – 0.60

MAR   1411 unch                                                                  MAY   115.20 – 0.60

MAY   1433 unch                                                                  JUL     116.55 – 0.70

JUL    1458 unch                                                                  SEP     117.70 – 0.75