Coffee Market Report

by | 18 Nov 2020

The December 2020 to January 2021 contract arbitrage between the New York and London markets widened yesterday: to register this at 51.97 usc/Lb.  This equates to 44.72% 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 5,924 bags yesterday, to register these stocks at 1,206,686 bags, with 93.3% of these certified stocks being held in Europe at a total of 1,126,109 bags and the remaining 6.7% being held in the USA at a total 80,577 bags.  There was meanwhile a smaller in number 3,175 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 70,715 bags.  

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 31,833 bags over the weeks of trade leading up to Monday 16th. November, to see these stocks registered at 2,218,667 bags, on the day. 

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a positive sideways track for the day. The Sugar, Cocoa and New York Coffee markets ended the day on a positive note, while the London Robusta Coffee market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.4257% higher; to see this index registered 429.3784.  The day starts with the U.S. Dollar, trading at 1.326 Sterling, at 1.187 the Euro and with the US Dollar buying 5.328 Real.

The New York and London markets started the day yesterday trading on a modest softer note, both markets quickly attracted some degree of buying support to see the markets turn and trend positive for the remainder of the morning session. As the afternoon progressed the London and New York markets fell back off the highs of the day to see the London market trend softer for the remainder of the day, while the New York markets hit a floor only to recover and settle on a modest firmer note for the day.

The London market ended the day on a negative note with 50% of the earlier losses of the day intact. while the New York market ended the day on a positive note with 55% of the earlier gains of the day intact. This mixed close albeit that the New York market settled on a modest firmer note, does little to indicate direction and one might think the markets are possibly set for a hesitant start to early trade today, against the prices set yesterday, as follows:  

LONDON ROBUSTA US$/MT                                 NEW YORK ARABICA USc/Lb.                                                 

JAN   1416 – 24                                                  DEC   116.20 + 0.55

MAR   1423 – 26                                                           MAR   119.50 + 0.75

MAY   1435 – 22                                                          MAY   121.35 + 0.80

JUL    1450 – 20                                                          JUL     122.90 + 0.75

SEP    1468 – 18                                                           SEP     124.30 + 0.70

NOV   1485 – 18                                                            DEC    125.90 + 0.60

JAN    1501 – 18                                                           MAR   127.45 + 0.50

MAR   1517 – 18                                                             MAY     128.35 + 0.50