Coffee Market Report

by | 14 Oct 2020

The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of September were 11.53% higher than the same month last year, to total 3.51 million bags, this number made up of 2.84 million bags of Arabica Coffee up 1.5% from the same month last year and 672,000 bags of Robusta Coffee up 94.22% from the same month last year.  This brings the total Brazil exports for the twelve months October 2019 to September 2020, to a total of 40.51 million bags of which 11.46% constituted Brazil Conilon robusta coffee, 9.77% soluble exports, the balance mostly natural processed, arabica coffee. 

The Coffee Exporters Association in Brazil Cecafé have since reported the cumulative exports for the first three months of the July 2020 to June 2021 Brazil coffee year, to be marginally lower 0.33% overall at the end of September than the same period in the previous coffee year at a total of 9.19 million bags. 

The weather across the Brazil coffee belt meanwhile, has registered a week of above average daytime temperatures with weather forecasters foreseeing wet weather and cooler temperatures to come to the main coffee growing areas next week.  This is forecast to bring more useful rains for these areas, to assist flowering of the new Brazil 2021 coffee crop to come. 

The November to December contract arbitrage between the London and New York markets broadened yesterday; to register this at 54.63 usc/Lb.  This equates to 49.62% 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 35 bags yesterday to register these stocks at 1,099,630 bags, with 93.60% of these certified stocks being held in Europe at a total of 1,028,987 bags and the remaining 6.40% being held in the USA at a total 70,643 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,208 bags.  

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 4,000 bags over the weeks of trade leading up to Monday 12th. October, to see these stocks registered at 1,804,000 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 sideways track for the day. The Sugar and New York Arabica Coffee markets ended the day on a positive note, while the Cocoa and London Robusta Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1792% lower; to see this index registered at 418.3045.   The day starts with the U.S. Dollar steady, trading at 1.292 Sterling, at 1.174 the Euro and with the US Dollar buying 5.569 Brazilian Real.

The New York and London markets started the day yesterday trading on a positive note, both markets continued on this positive path into the early morning trade, before hitting a ceiling and limiting the gains for the early morning session. As the afternoon progressed both markets continued to slip back into negative territory, before attracting a degree of buying support late in the day. The New York market settled on a positive note, while the London market slipped back off the highs of the afternoon to settle on a softer note for the day.

The London market ended the day with on a modest negative note with 52.63% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 47.50% of the earlier gains of the day intact. This mixed close does little to indicate direction but with the New York market showing some signs of recovery late in the day 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.                                               

NOV   1223 – 10                                                                       DEC    110.10 + 0.95 

JAN    1250 – 5                                                                        MAR   112.60 + 1.10 

MAR   1263 – 8                                                                        MAY   114.10 + 1.15

MAY   1279 – 8                                                                        JUL     115.55 + 1.15

JUL     1296 – 7                                                                       SEP     116.80 + 1.15 

SEP    1315 – 6                                                                       DEC    118.55 + 1.25

NOV   1334 – 5                                                                        MAR   120.20 + 1.25

JAN    1349 – 5                                                                         MAY   121.30 + 1.25