Coffee Market Report February 06 2020

The International Coffee Organisation ICO have reported that the global coffee exports for the month of December were 0.3% higher than the same month last year, at a total of 10.30 million bags. This they say, has contributed to the cumulative global coffee exports for the first three months of the present October 2019 to September 2020 coffee year to be 5.8% lower than the same period in the previous coffee year, at a total of 29.01 million bags. 

The same ICO report has estimated that global coffee consumption will rise by 2.7% for this present October 2019 to September 2020 coffee year to 169.34 million bags, which is marginally above what they estimate to be the coffee supply for this coffee year. With Global coffee production expected to fall by 0.9% to 168.71 million bags, this would result in a projected deficit of 630,000 bags for the October 2019 to September 2020 coffee year. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 40.42 usc/Lb.  This equates to 41.35 % 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 725 bags yesterday; to register these stocks at 2,166,495 bags, with 89.4% of these certified stocks being held in Europe at a total of 1,935,918 bags and the remaining 10.6% being held in the USA at a total of 230,577 bags.  There was meanwhile a larger in number decrease by 3,277 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 21,265 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a firm sideways track for the day. The Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Soybean, Gold and Silver markets ended the day on a positive note, while the Coffee and Corn markets ended the day on a softer note.    The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.5422% higher; to see this index registered at 397.3281   The day starts with the U.S. Dollar showing some degree of buoyancy and steady, trading at 1.297 to Sterling, at 1.099 to the Euro and with the US Dollar buying 4.235 Brazilian Real. 

The London and New York markets started the day yesterday trading on close to par on a modest positive note, both markets encountered buying support to move deeper into positive territory into the early afternoon trade. As the afternoon progressed both the London and the New York started to attract selling pressure to drop back of the highs of the day’s trade and move into negative territory, both markets maintained this soft track to close on a modest soft note. 

The London market ended the day on a modest negative note and with 66.67% of the earlier losses of the day intact, while the New York market ended the day on a likewise modest negative note and with 66.67% of the earlier losses of the day intact.  This softer close, does little to inspire confidence and one may think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:   

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

MAR   1264 – 8                                                                      MAR     97.75 – 0.40

MAY   1284 – 6                                                                      MAY     99.85 – 0.50

JUL    1305 – 5                                                                      JUL     102.10 – 0.50

SEP    1326 – 4                                                                      SEP    104.20 – 0.55

NOV   1346 – 4                                                                       DEC   107.05 – 0.50

JAN    1364 – 4                                                                       MAR  109.90 – 0.50

MAR   1384 – 4                                                                       MAY  111.50 – 0.50

MAY   1405 – 5                                                                       JUL    112.85 – 0.55

JUL    1428 – 5                                                                       SEP    114.05 – 0.55