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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

22 Jan 2020

The European coffee federation have reported that coffee stocks held within reporting port warehouses in Western Europe decreased by 86,677 bags or 4.19% during the month of November, to register these stocks at 1,983,170 bags. These stocks which service both the west and east European markets do not include all of the port warehouses in Western Europe nor do they include many other private warehouses, in transit container stocks and on-site roaster inventory stocks.

The March to March contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 50.50 usc/Lb. This equates to 45.48 % 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 17,088 bags yesterday; to register these stocks at 2,132,428 bags, with 88.8% of these certified stocks being held in Europe at a total of 1,894,238 bags and the remaining 11.2% being held in the USA at a total of 238,190 bags. There was meanwhile a larger in number decrease by 20,785 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 98,970 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 43,000 bags over the weeks of trade leading up to Monday 20th January, to see these stocks registered at 2,425,500 bags, on the day.

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Sugar, Cocoa, London Robusta Coffee, Orange Juice and Wheat markets ended the day on a positive note, while the Oil, Natural Gas, New York Arabica Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.7787% lower; to see this index registered at 416.6374 The day starts with the U.S. Dollar steady, trading at 1.306 to Sterling, at 1.108 to the Euro and with the US Dollar buying 4.212 Brazilian Real.

The London market started the day yesterday on a positive note, while the New York market started the day trading close to par and maintained this modest positive track into the early afternoon trade. As the afternoon progressed the London market continued to trade in positive territory to close on a positive note for the day, while the New York market started to attract selling pressure to move into modest negative territory for the afternoon trade and to close on a negative note for the day.

The London market ended the day on a positive note and with 88.20% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 45.83% of the earlier losses of the day intact. This mixed close does little to indicate direction for the day today, which is likely to see the markets due for a hesitant near to steady start for early trade today, against the prices yesterday, as follows:

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

MAR 1335 + 30                                                                    MAR 111.05 – 1.10
MAY 1348 + 24                                                                    MAY 113.35 – 1.10
JUL 1366 + 21                                                                      JUL 115.65 – 1.10
SEP 1385 + 20                                                                      SEP 117.75 – 1.10
NOV 1404 + 20                                                                    DEC 120.55 – 0.95
JAN 1422 + 20                                                                      MAR 123.15 – 0.80
MAR 1444 + 20                                                                    MAY 124.45 – 0.70
MAY 1467 + 20                                                                    JUL 125.55 – 0.65
JUL 1490 + 20                                                                      SEP 126.65 – 0.55