Coffee Market Report April 17 2020

Reuters has reported that the Vietnamese Government has on Wednesday extended a two-week social distancing programme for 12 provinces in the country but lifted the stringent measures for most of the rural areas, including the coffee belt area of the central highlands. Although restrictions have been somewhat eased in the rural outlying areas, elsewhere such as Ho Chi Minh City where the main port is located, still have lockdown measures place however, these measures are related to societal restrictions and social distancing which will impact day to day business and citizens, it would appear meanwhile that logistical services and therefore, coffee deliveries to port and exports will continue to flow to consumer markets. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 65.04 usc/Lb.  This equates to 54.34% price discount for the London Robusta coffee market.    

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 1,866,211 bags, with 90.4% of these certified stocks being held in Europe at a total of 1,686,704 bags and the remaining 9.6% being held in the USA at a total of 179,507 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,580 bags.  

The commodity markets were sideways in trade yesterday, to see the overall macro commodity index taking a sideways. The Cocoa Markets ended the day on a positive note, the Sugar market remained unchanged on the day, while the coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2032% higher; to see this index registered at 336.5349.   The day starts with the U.S. Dollar steady, trading at 1.248 to Sterling, at 1.085 to the Euro and with the US Dollar buying 5.234 Brazilian Real.     

The New York and London markets started the day yesterday trading close to par on a modest positive note, both markets continued on this sideways track into the early afternoon trade. As the afternoon progressed both the London and the New York markets attracted selling pressure to drop into negative territory for the day, the London market bounced off the lows of the day to close on a modest close to par negative note, while the New York market closed on a negative note for the day. 

The London market ended the day on a modest negative and with 7.70% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 65.22% of the earlier losses of the day intact. This softer close does little to inspire confidence and with the Brazil Real showing some degree of marginal muscle against the US Dollar one might expect 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.                                                 

JUL    1205 – 1                                                                     JUL    119.70 – 1.50 

SEP    1221 – 3                                                                     SEP   120.70 – 1.55 

NOV   1237 – 6                                                                     DEC   121.90 – 1.65

JAN    1255 – 5                                                                      MAR  123.25 – 1.80 

MAR   1269 – 5                                                                      MAY  123.95 – 1.90  

MAY   1284 – 5                                                   JUL   124.70 – 1.90

JUL     1301 – 5                                                                      SEP    125.50 – 1.80

SEP    1322 – 5                                                   DEC  126.90 – 1.75