Coffee Market Report

by | 17 Feb 2021

The Green Coffee Association of the U.S.A. have announced that the country’s port warehouse stocks fell by 135,130 bags or 2.26% during the month of January, to register these stocks at 5,843,171 bags at the end of the month.  Of this total, 92,888 bags were registered in the U.S. Certified coffee stock warehouses at the time of reporting. The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 585,000 bags per week, would conservatively have been at least 1.2 million bags.  

Thus, if one is to consider the additional unreported stocks that are being held in private inventories at the end of month, this would equate to more than ten weeks of roasting activity, which most would consider to be a very safe reserve.  

The March 2021 to March 2021 contract arbitrage between the London and New York markets widened yesterday: to register this at 63.66 usc/Lb. This equates to 51.19% 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 4,227 bags yesterday, to register these stocks at 1,724,480 bags, with 94.6% of these certified stocks being held in Europe at a total of 1,631,592 bags and the remaining 5.4% being held in the USA at a total 92,888 bags.  There was meanwhile a smaller in number 1,925 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 76,094 bags.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking firm something of a sideways track for the day. The Sugar and Coffee markets ended the day on a positive note, while the Cocoa market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.53% higher; to see this index registered 496.12.  The day starts with the U.S. Dollar, trading at 1.390 Sterling, at 1.209 the Euro and with the US Dollar buying 5.370 Real.

The New York and London markets started the day yesterday trading south of par on a modest softer note, both markets quickly gained support to see the fortunes reversed and the markets set on a firmer path for the remainder of the morning session. As the afternoon progressed the New York and London markets continued a firmer path buoyed by a degree of buying support. The New York market settled near to the highs of the day, while the London market hit a ceiling late in the day limiting the gains for the late afternoon session to see the market settle on a modest positive note at the close.

The London market ended the day on a modest positive note with 46.15% of the earlier gains of the day intact, while the New York market ended the day on a firm positive note with 85.33% of the earlier gains of the day intact. This firmer close, with the New York market settling near to the highs of the day, might inspire some degree of confidence to possibly set the markets for a follow through steady start for early trade today, against the prices set yesterday, as follows:  

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

MAR    1338 + 6                                     MAR    124.35 + 3.20

MAY     1363 + 7                                     MAY     126.20 + 3.15

JUL      1376 + 6                                     JUL     128.10 + 3.10

SEP     1391 + 6                                     SEP     129.85 + 3.05

NOV     1407 + 6                                     DEC     131.90 + 3.00

JAN     1421 + 5                                     MAR    133.55 + 2.95

MAR    1438 + 5                                     MAY    134.30 + 2.90

MAY     1455 + 5                                     JUL        134.85 + 2.80