Coffee Market Report

by | 19 Nov 2020

The December 2020 to January 2021 contract arbitrage between the New York and London markets widened yesterday: to register this at 56.16 usc/Lb.  This equates to 46.90% 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 16,200 bags yesterday, to register these stocks at 1,222,886 bags, with 93.5% of these certified stocks being held in Europe at a total of 1,142,859 bags and the remaining 6.5% being held in the USA at a total 80,027 bags.  There was meanwhile a smaller in number 14,795 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 55,920 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 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 0.7291% higher; to see this index registered 432.5089.  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 market hit a ceiling to drop back limiting the gains for the day, while the New York market also fell back off the highs of the day. This saw the London market trend softer for the remainder of the day, while the New York market buoyed by a degree of buying support settled near to the highs of the day.

The London market ended the day on a softer note with 82.35% of the earlier losses of the day intact. while the New York market ended the day on a positive note with 91.03% of the earlier gains of the day intact. This mixed close, with first notice day today 19th November, albeit that the New York market settled near to the highs of the day, does little to indicate direction and one might think the markets are possibly set for a follow through hesitant steady start to early trade today, against the prices set yesterday, as follows:  

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

JAN   1402 – 14                                                  DEC   119.75 + 3.55

MAR   1409 – 14                                                           MAR   122.85 + 3.35

MAY   1421 – 14                                                          MAY   124.70 + 3.35

JUL    1435 – 15                                                          JUL     126.15 + 3.25

SEP    1451 – 17                                                           SEP     127.50 + 3.20

NOV   1468 – 17                                                            DEC    129.00 + 3.10

JAN    1484 – 17                                                           MAR   130.45 + 3.00

MAR   1500 – 17                                                             MAY     131.30 + 2.95