The May-to-May contract arbitrage between the London and New York markets narrowed yesterday: to register this at 61.46 usc/Lb. This equates to 50.13% 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 3,045 bags yesterday, to register these stocks at 1,831,885 bags, with 94.9% of these certified stocks being held in Europe at a total of 1,738,422 bags and the remaining 5.1% being held in the USA at a total 93,442 bags. There was meanwhile a larger in number 5,120 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,551 bags.
The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 8,500 bags over the weeks of trade leading up to Monday 29th. March, to see these stocks registered at 2,479,667 bags, on the day.
It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a negative track for the day, with the US Dollar making significant gains yesterday, to reach a four month, on the back of renewed speculative confidence in the largest, U.S.A. economy. A stronger US Dollar is seen to be a bearish factor for many of the US Dollar based commodity markets when trading in other currencies. The Palladium market ended the day on a positive note, the Sugar market remained unchanged on the day, while the Cocoa, Coffee, Gold, Silver and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar, trading at 1.372 Sterling, at 1.171 the Euro and with the US Dollar buying 5.773 Real.
The New York and London markets started the day yesterday trading on a modest positive note, this support was short lived as the markets soon came under pressure from a degree of technical selling activity. As the afternoon progressed both the New York and the London markets continued on a softer path, accentuated by the selling pressure exerted upon the markets. The New York market broke through emotive chart levels, to trigger stops along the way, with a lower floor established toward the latter end of the day. London followed New York lower, although in a more subdued manner and this saw both markets settle near to the lows of the day on a very negative note. The New York May position dropped back to its lowest point since mid-February, with the London market following suit, albeit in a more sedate manner.
The London market ended the day on a negative note with 90.32% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 96.74% of the earlier losses of the day intact. This very soft close, with both markets dropping back late in the day to settle near to the lows of the day, does little to inspire confidence, nor does it indicate direction and one might think the markets are due for little better than hesitant start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 1348 – 28 MAY 122.60 – 4.45
JUL 1373 – 24 JUL 124.65 – 4.40
SEP 1394 – 21 SEP 126.60 – 4.40
NOV 1410 – 21 DEC 129.00 – 4.35
JAN 1425 – 21 MAR 131.05 – 4.25
MAR 1441 – 20 MAY 132.05 – 4.20
MAY 1458 – 20 JUL 132.70 – 4.00
JUL 1475 – 19 SEP 133.05 – 3.85