I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

14 Sep 2017

The November to December contracts arbitrage between the London and New York markets broadened yesterday, to register this at 46.99 usc/Lb., while this equates to 34.09% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,062 bags yesterday; to register these stocks at 1,777,581 bags. There was meanwhile an decrease at 4,845 bags in the number of bags pending grading for this exchange; to register these pending grading stocks at 62,275 bags.

It was a positive day for the commodity markets yesterday, the leading in influence Oil markets took a more positive turn as the International Energy Agency forecast prospective surplus reductions to come. In general terms and subsequent to a phase of tumultuous Pacific rim political uncertainties, followed closely by the climatically induced humanitarian disasters in the wake of devastating hurricanes as the mopping up, rebuilding and recovery begins, the markets would appear to have found a renewed confidence in the commodity sector yesterday, to provide a boost to the day. The US Dollar held steady to firmer on the day, against a basket of other major currencies. It was a firm day for Oil markets, Sugar, Cocoa, Coffee and a steady to positive day for Wheat, Corn, Soybean markets, whereas a lower day for Cotton, Copper, Orange Juice, Gold, Silver, Platinum and Palladium sectors. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.5774% higher, to see this Index registered at 411.40. The day starts with the U.S. Dollar steady and trading at 1.32 to Sterling and at 1.187 to the Euro, while North Sea Oil is buoyant and is selling at US$ 55.57 per barrel.

The London and New York markets started the day on a marginally positive note yesterday in a relatively active start to the morning session. In the absence of fundamentals to guide direction, speculative focus has fixed on the dry weather across the Brazil coffee belt, while a degree of the all more positive sentiment within commodities, spilled into the coffee markets with technical buying activity supportive. The upward momentum was sustained in both markets into the afternoon, although volume muted in London, origin sellers returned to the floor to pick up the pace as did the strengthening U.S. Dollar weigh in around midsession. The change in direction in both markets was brief, as the push lower met with a fresh wave of buying activity to encourage a resurgence of confidence and upward momentum which was sustained to the end of the session in London and near to the close of the day in New York. The settlement was at the high on the close in London and just off the day’s highs in New York, to register the close yesterday after a fair to good volume day in both markets, as follows;

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

SEP   2024 + 34                           SEP  136.60 + 2.80
NOV 2003 + 34                           DEC 137.85 + 2.80
JAN   1989 + 35                          MAR 141.30 + 2.80
MAR 1986 + 35                          MAY 143.60 + 2.75
MAY 1997 + 35                          JUL  145.85 + 2.75
JUL    2024 + 33                         SEP   148.15 + 2.75
SEP    2033 + 33                         DEC  151.45 + 2.75
NOV 2044 + 33                          MAR 154.70 + 2.80
JAN   2055 + 33                         MAY 156.70 + 2.80
MAR 2060 + 33                          JUL  158.70 + 2.80

Kind regards,
Natasha