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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

19 Aug 2020

The Green Coffee Association of the U.S.A. have announced that the country’s port warehouse stocks decreased by 6,849 bags or 0.1% during the month of July, to register these stocks at 7,054,349 bags at the end of the month. The report similarly shows the country’s port warehouse stocks decreased by 44,826 bags or 0.63% when compared to the same period last year. The overall Green Coffee stocks reported, do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of approximately 595,000 bags per week, would conservatively have been at least 1.2 million bags. These cumulative coffee stocks would indicate that there is a steady level of comfort of just over twelve weeks of overall supply available to fuel these two countries’ combined coffee consumption.

The November to December contract arbitrage between the London and New York markets widened yesterday; to register this at 57.73 usc/Lb. This equates to 47.70% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 5,578 bags yesterday to register these stocks at 1,362,762 bags, with 93.6% of these certified stocks being held in Europe at a total of 1,276,010 bags and the remaining 6.4% being held in the USA at a total of 86,752 bags. There is meanwhile a smaller in number 1,167 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,048 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 11,667 bags over the weeks of trade leading up to Monday 17th. August, to see these stocks registered at 1,826,500 bags, on the day.

It was a modest 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 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 0.4377% higher; to see this index registered at 408.0603. The day starts with the U.S. Dollar steady, trading at 1.324 to Sterling, at 1.194 to the Euro and with the US Dollar buying 5.467 Brazilian Real.

The London and New York markets started the day yesterday trading on a positive note, both markets continued on this firmer track into the early afternoon trade. As the afternoon both the London and the New York markets hit a ceiling limiting the gains for the early afternoon trade. Late In the afternoon session saw the New York market attracting a degree of buying support to see the market close on a positive note, with the London market following suit in a more sedate manner.

The London market ended the day on a modest close to positive note and with 69.23% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 86.75% of the earlier gains of the day intact. This firmer close might inspire some degree of confidence to possibly see the markets set for a steady start for early trade today, against the prices set yesterday, as follows:

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

SEP 1470 + 30                                                                       SEP 119.30 + 3.75
NOV 1396 + 18                                                                     DEC 121.05 + 3.60
JAN 1402 + 17                                                                       MAR 122.85 + 3.45
MAR 1415 + 17                                                                     MAY 123.70 + 3.45
MAY 1429 + 15                                                                     JUL 124.50 + 3.40
JUL 1443 + 13                                                                       SEP 125.15 + 3.30
SEP 1457 + 13                                                                       DEC 126.00 + 3.20
NOV 1471 + 13                                                                     MAR 126.95 + 3.15