Coffee Market Report

by | 07 Oct 2020

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of September was 93,000 bags or 8.55% lower than the same month last year, at a total of 995,000 bags.   This has contributed to the countries cumulative production for the October 2019 to September 2020 coffee year to be 234,000 bags or 1.69% higher than the same period in the previous coffee year, at a total of 14,100,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of September were 123,000 bags or 12.19% lower than the same month last year, at a total of 886,000 bags.   This has contributed to the country’s cumulative coffee exports for the October 2019 to September 2020 coffee year to be 1,027,000 bags or 7.75% lower than the same period in the previous coffee year, at a total of 12,222,000 bags. These exports numbers are similarly reported, to have registered a decline due to restrictions put in place as part of the nationwide efforts to combat the spread of the Covid-19 virus.

The November to December contract arbitrage between the London and New York markets broadened yesterday; to register this at 50.72 usc/Lb.  This equates to 47.11% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 1,774 bags yesterday to register these stocks at 1,097,998 bags, with 93.80% of these certified stocks being held in Europe at a total of 1,029,800 bags and the remaining 6.20% being held in the USA at a total of  68,198 bags.  There was meanwhile a smaller in number 677 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 23,634 bags.  

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 14,333 bags over the weeks of trade leading up to Monday 5th. October, to see these stocks registered at 1,808,000 bags, on the day.

It was a relatively firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar and New York Arabica markets ended the day on a positive note, while the London Robusta Coffee and Cocoa markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.4214% higher; to see this index registered at 414.0482.   The day starts with the U.S. Dollar steady, trading at 1.289 Sterling, at 1.173 the Euro and with the US Dollar buying 5.593 Brazilian Real.

The New York and London markets both started the day yesterday trading on a modest positive note, both markets oscillated back and forth around par for most of the morning trade. The volume in both markets were relatively subdued at the outset.  As the afternoon progressed both the London and the New York markets started to attract buying support to see the markets recover some of the earlier losses of the day, the New York market hit a ceiling to limit the gains for the day and see the market slip back to settle on a modest positive note, while the London market gained a degree of selling pressure to see the market fall back and settle on a softer note for the day.

The London market ended the day with on a negative note with 59.09% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 20.45% of the earlier gains of the day intact. This mixed close, with the New York market falling back from the highs of the day, does little to indicate direction and one might think the markets are due for 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.                                               

NOV   1255 – 13                                                                       DEC    107.65 + 0.45 

JAN    1279 – 14                                                                      MAR   109.85 + 0.45 

MAR   1295 – 15                                                                      MAY   111.45 + 0.50

MAY   1313 – 14                                                                      JUL     113.00 + 0.60

JUL     1330 – 13                                                                     SEP     114.30 + 0.60 

SEP    1347 – 12                                                                     DEC    115.85 + 0.70

NOV   1363 – 12                                                                      MAR   117.40 + 0.80

JAN    1382 – 12                                                                       MAY   118.55 + 0.80