Coffee Market Report February 28 2020

Reuters have reported that Vietnam’s coffee exports for the month of January are down by 22.9% from the previous month, to total 2,418,350 bags. This number proving to be slightly above the 2.3 million bags that had been initially forecast for the month’s coffee exports. 

While the report well illustrates the negative effects of the prevailing soft coffee terminal markets, in that the value of Vietnam coffee exports for the first month of 2020 is 22.9% lower than the same month last year, at a total of approximately 246 million US dollars. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 51.18 usc/Lb.  This equates to 47.30% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 225 bags yesterday; to register these stocks at 2,140,415 bags, with 89.6% of these certified stocks being held in Europe at a total of 1,916,933 bags and the remaining 10.4% being held in the USA at a total of 223,482 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 0 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Natural Gas, Cocoa, Orange Juice and Soybean markets ended the day on a positive note, while the Oil, Sugar, Coffee, Cotton, Copper, Wheat, Corn, 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 1.3477% lower; to see this index registered at 388.0630.   The day starts with the U.S. Dollar steady, trading at 1.288 to Sterling, at 1.100 to the Euro and with the US Dollar buying 4.486 Brazilian Real. 

The London and New York markets started the day yesterday trading on modest negative note, both markets maintained this soft stance into the early afternoon trade. As the afternoon progressed the New York market started to attract buying support to move into modest positive territory only to hit a ceiling and fall back from the highs of the day to settle in negative territory, while the London market followed suite in a more sedate manner. 

The London market ended the day on a modest negative note and with 81.25% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 88.8% of the earlier losses of the day intact.  This close does little to inspire confidence and especially so in terms of the weak nature of the Brazil Real, which is likely to set the market for little better than a near to steady start for early trade today, against the prices set yesterday, as follows:   

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

MAR   1257 – 11                                                                      MAR  108.20 – 0.90

MAY   1289 – 6                                                                        MAY  109.75 – 0.90

JUL    1308 – 5                                                                        JUL    111.70 – 1.00

SEP    1327 – 6                                                                       SEP    113.45 – 1.15

NOV   1344 – 5                                                                        DEC   115.85 – 1.30

JAN    1359 – 5                                                                        MAR  117.95 – 1.50

MAR   1372 – 4                                                                        MAY  119.15 – 1.60

MAY   1392 – 4                                                                        JUL    120.30 – 1.65

JUL    1413 – 4                                                                        SEP    121.40 – 1.75