Coffee Market Report

by | 06 Nov 2020

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of October was 210,000 bags or 15.34% lower than the same month last year, at a total of 1,159,000 bags.   

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of October were 170,000 bags or 14.04% lower than the same month last year, at a total of 1,041,000 bags.  The National Coffee Growers Federation in Colombia have reported that the country’s coffee exports at the end of 2020 calendar year are expected to reach between 12.7 million and 13.4 million bags, this number slightly below the 13.6 million bags exported during the 2019 calendar year 

The new crop harvest in Vietnam is soon to start in Mid-November, albeit slightly delayed in their seasonal year, due to a continuation of rain through October and the beginning of November across the coffee growing areas, with the effects of Typhoon Molave triggering widespread rain over the coffee belt that is expected to persist over the next few days. So long as the rain subsides in the coming weeks the harvest may be expected to peak by the second half of this month. 

The December 2020 to January 2021 contract arbitrage between the New York and London markets widened yesterday: to register this at 45.24 usc/Lb.  This equates to 42.70% 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 7,854 bags yesterday, to register these stocks at 1,160,439 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,091,480 bags and the remaining 5.9% being held in the USA at a total 68,959 bags.  There was meanwhile a larger in number 9,000 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 67,504 bags.  

It was a marginally firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day, with many investors keeping a close eye on the verdict of the Presidential Elections in the USA. The Cocoa and Coffee markets ended the day on a positive note, while the Sugar market ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.9010% higher; to see this index registered 418.5448.   The day starts with the U.S. Dollar marginally weaker but steady, trading at 1.312 Sterling, at 1.182 the Euro and with the US Dollar buying 5.525 Brazilian Real.

The New York and London markets started the day yesterday trading on a positive note, both markets continued to trend firmer for the remainder of the morning session. As the afternoon progressed the New York market briefly dropped off the highs of the day before gaining a degree of buying support to see both the New York and the London markets trend positive for the early afternoon session. Late in the day both markets hit a ceiling only to drop back marginally and settle near to the highs of the day.

The London market ended the day with on a positive note with 83.87% of the earlier gains of the day intact, while the New York market ended the day on a likewise modest positive note with 77.63% of the earlier gains of the day intact. This positive close and with both markets settling near to the highs of the day might inspire some degree of confidence to possibly set the markets 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.                                                 

JAN   1339 + 26                                                      DEC    105.95 + 2.95

MAR   1350 + 24                                                               MAR   108.45 + 2.80

MAY   1363 + 23                                                                 MAY  110.10 + 2.75

JUL     1380 + 23                                                                JUL    111.75 + 2.65

SEP     1397 + 22                                                                 SEP    113.15 + 2.60

NOV    1415 + 22                                                                 DEC   115.00 + 2.50

JAN     1431 + 22                                                                MAR   116.65 + 2.40

MAR    1448 + 22                                                                  MAY   117.75 + 2.35