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

Coffee Market Report

25 Jun 2020

The September to September contract arbitrage between the London and New York markets widened yesterday; to register this at 44.46 usc/Lb. This equates to 45.46% 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 4,198 bags yesterday; to register these stocks at 1,665,883 bags, with 92.1% of these certified stocks being held in Europe at a total of 1,534,279 bags and the remaining 7.9% being held in the USA at a total of 131,604 bags. There was meanwhile a smaller in number 341 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,553 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 24,667 bags over the weeks of trade leading up to Monday 22nd. June, to see these stocks registered at 1,982,500 bags, on the day.

It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a negative track for the day. The Cocoa market ended the day on a positive note, while the Sugar and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.5224% lower; to see this index registered at 355.7266. The day starts with the U.S. Dollar steady, trading at 1.241 to Sterling, at 1.125 to the Euro and with the US Dollar buying 5.348 Brazilian Real.

The New York and London markets started the day trading on a modest close to par on a modest soft note, both markets maintained this neutral stance into the early afternoon trade. As the afternoon progressed the New York and London markets started to attract a small degree of selling pressure to drop back slightly to see both markets trading on a modest soft note for the afternoon session. The late afternoon session saw the New York market gain some momentum which was short lived, as both the New York and London markets closed on a modest soft note for the day.

The London market ended the day on a modest negative note and with 81.82% of the earlier losses of the day intact, while the New York market ended the day on a likewise modest negative note and with 38.10% of the earlier losses of the day intact. The Brazil Real slipped back against the US Dollar, to fall by 3.12% in value against the Greenback lending an influence to the softer day, though with a recovery seen and back toward unchanged as the markets finished the day. This modest close does little to indicate direction albeit that both markets settled close to par for the day, one might think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

SEP 1176 – 9                                                                            SEP 97.80 – 0.40
NOV 1194 – 9                                                                          DEC 100.05 – 0.35
JAN 1213 – 8                                                                           MAR 102.15 – 0.25
MAR 1231 – 8                                                                         MAY 103.55 – 0.15
MAY 1250 – 9                                                                         JUL 104.95 – 0.05
JUL 1267 – 11                                                                         SEP 106.20 – 0.10
SEP 1281 – 11                                                                         DEC 107.95 – 0.10
NOV 1296 – 10                                                                       MAR 109.70 – 0.10