Coffee Market Report May 07 2020

The July to July contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 56.03 usc/Lb.  This equates to 50.66% 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 2,648 bags yesterday; to register these stocks at 1,804,141 bags, with 90.7% of these certified stocks being held in Europe at a total of 1,635,837 bags and the remaining 9.3% being held in the USA at a total of 168,304.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,515 bags. 

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 65,000 bags over the weeks of trade leading up to Monday 4th May, to see these stocks registered at 2,211,667 bags, on the day. 

The commodity markets were softer in trade yesterday, to see the overall macro commodity index taking a negative track for the day. The London Robusta Coffee market ended the day on a positive note, While the Sugar, Cocoa and New York Arabica Coffee markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.1413% lower; to see this index registered at 340.7679.   The day starts with the U.S. Dollar steady, trading at 1.232 to Sterling, at 1.080 to the Euro and with the US Dollar buying 5.714 Brazilian Real.   

The London and New York markets started the day trading close to par on a modest negative note, both markets maintained this soft stance into the early afternoon trade. As the afternoon progressed the New York market and London markets attracted buying support to move onto a positive track for the afternoons trade, this was positive momentum late in the day was short lived to see the London and New York markets close near to par for the day.  Following a cut in their debt rating yesterday, the already weak Brazil Real fell a further 1.83% against the US Dollar yesterday, settling close to the record low of 5.746. 

The London market ended the day on a modest close to unchanged positive note and with 14% of the earlier gains of the day intact, while the New York market also ended the day on a modest close to unchanged negative note and with 1.95% of the earlier losses of the day intact. This mixed close with both markets settling near to unchanged for the day does little to indicate direction and one might think the markets are due for 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    1201 + 1                                                                    JUL    110.60 – 0.05

SEP    1222 + 1                                                                    SEP   111.90 + 0.05

NOV   1243 + 2                                                                     DEC   113.95 + 0.10

JAN    1263 + 2                                                                     MAR  115.75  Unch 

MAR   1281 + 3                                                                     MAY  116.65 – 0.30 

MAY   1301 + 5                                                   JUL   117.55 – 0.60

JUL     1318 + 4                                                                     SEP    118.40 – 0.85

SEP    1339 + 4                                                  DEC  119.60 – 1.05