Coffee Market Report March 19 2020

Arabic Coffee KCc2 surged up 5.7 usc/Lb or 5%, it was up 11% earlier in the days trade, this may be attributed talks of supply logjams at Ports in Brazil and due to the softer nature of the Brazil Real which reached a new record low against the US Dollar yesterday. The Brazil Real tumbled another 3.5% yesterday and posted a new record low of 5.2014 to the Dollar. 

The May to May contracts arbitrage between the London and New York markets broadened yesterday; to register this at 52.65 usc/Lb.  This equates to 48.61% 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 1,115 bags yesterday; to register these stocks at 2,082,288 bags, with 90.5% of these certified stocks being held in Europe at a total of 1,888,867 bags and the remaining 9.5% being held in the USA at a total of 198,421 bags.  There was meanwhile a larger in number decrease by 2,200 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,200 bags.

 The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 47,500 bags over the weeks of trade leading up to Monday 16th.March, to see these stocks registered at 2,429,000 bags, on the day. 

The commodity markets were very soft in trade yesterday, to see overall macro commodity index taking a negative track for the day. The Coffee market ended the day on a positive note, while the Sugar and Cocoa markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 4.3619% lower; to see this index registered at 317.4721.   The day starts with the U.S. Dollar steady and showing some degree of buoyancy, trading at 1.1502 to Sterling, at 1.0901 to the Euro and with the US Dollar buying 5.1064 Brazilian Real. 

The London and New York markets started the day yesterday trading on a modest soft close to par note, both markets continued to trade around par into the early afternoon trade. As the afternoon progressed both the London and the New York markets started to attract buying support to move deep into positive territory only to hit a ceiling a drop back to close on a positive note for the day. 

The London market ended the day on a positive note and with 51.7% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 49.6% of the earlier gains of the day intact.  This close might inspire some degree of confidence but with the underlying volatility in the commodity markets due to the fears over the coronavirus pandemic one might expect 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.                                               

MAY   1227 + 15                                                                        MAY  108.30 + 5.70

JUL    1245 + 12                                                                        JUL    108.15 + 4.15

SEP    1264 + 12                                                                       SEP    108.70 + 3.25

NOV   1278 + 8                                                                          DEC   109.95 + 2.30

JAN    1292 + 3                                                                          MAR  111.60 + 2.00

MAR   1306 + 2                                                                          MAY  112.60 + 1.90

MAY   1324 + 4                                                                          JUL    113.45 + 1.75

JUL    1345 + 5                                                                          SEP    114.25 + 1.65