Coffee Market Report

by | 23 Oct 2020

The December 2020 to January 2021 contract arbitrage between the New York and London markets widened yesterday; to register this at 47.42 usc/Lb.  This equates to 44.44% price discount for the London Robusta coffee market.    

The Certified washed Arabica coffee stocks held against the New York exchange was seen to increase by 3,560 bags yesterday, to register these stocks at 1,131,030 bags, with 93.80% of these certified stocks being held in Europe at a total of 1,061,270 bags and the remaining 6.20% being held in the USA at a total 69,760 bags.  There was meanwhile a smaller in number 1,355 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,633 bags.  

It was a modest 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, Cocoa and Coffee markets ended the day on a positive note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.0993% lower; to see this index registered at 420.3756.   The day starts with the U.S. Dollar marginally weaker but steady, trading at 1.306 Sterling, at 1.180 the Euro and with the US Dollar buying 5.593 Brazilian Real.

The New York and London markets opened the day yesterday trading on a modest firm, both markets quickly gained momentum to see the markets trend marginally positive for the remainder of the morning session. As the afternoon progressed both the New York and London markets came under a degree of selling pressure to see the markets drop back off the highs of the day, this was short lived as both markets quickly gained a degree of buying support to see both the London and the New York market trend very positive towards the end of the afternoon session.

The London market ended the day with on a positive note with 71.80% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 77.27% of the earlier gains of the day intact. This positive close might inspire some degree of confidence with both markets gaining traction 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   1276 + 26                                                               DEC   106.70 + 2.55

JAN    1307 + 28                                                               MAR   109.40 + 2.40

MAR   1313 + 24                                                                MAY  111.10 + 2.45

MAY   1327 + 23                                                                 JUL    112.65 + 2.50

JUL     1344 + 23                                                                 SEP    113.95 + 2.50

SEP    1361 + 23                                                                 DEC   115.65 + 2.55

NOV   1378 + 23                                                                 MAR   117.30 + 2.60

JAN    1394 + 23                                                                  MAY   118.40 + 2.60