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

Coffee Market Report

22 Jul 2020

The September to September contract arbitrage between the London and New York markets widened yesterday; to register this at 42.01 usc/Lb. This equates to 41.29% 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 4,125 bags yesterday to register these stocks at 1,598,207 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,504,440 bags and the remaining 5.9% being held in the USA at a total of 93,767 bags. There was meanwhile a larger in number 10,727 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,776 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 15,500 bags over the weeks of trade leading up to Monday 20th. July, to see these stocks registered at 1,889,667 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. Speculative sentiment buoyed by broad based gains in commodity and equity markets, seemingly linked to positive news about Covid-19 vaccine trails and the news of a European Union stimulus deal to fuel recovery from the economic slowdown within these consumer markets, caused by the Covid-19 pandemic. The US Dollar registered a softer day against a basket of major currencies, contributing to the firmer day. The Coffee markets ended the day on a positive note, while the Sugar and Cocoa markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.326% higher; to see this index registered at 378.6937. The day starts with the U.S. Dollar steady, trading at 1.272 to Sterling, at 1.154 to the Euro and with the US Dollar buying 5.170 Brazilian Real.

The New York and London markets started the day yesterday trading on a close to par positive note, both markets maintained this stance into the early afternoon trade. As the afternoon progressed both markets attracted buying support to see the markets trend positive, the New York and London markets gained momentum to see both markets close near to the highs of the day in very positive territory.

The London market ended the day on a very positive note and with 97.50% of the earlier gains of the day intact, while the New York market ended the day on a likewise very positive note and with 93.02% of the earlier gains of the day intact. This positive close, with both markets settling near to the highs of the day, might inspire some degree of confidence to possibly set the markets for 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 1317 + 39                                                                       SEP 101.75 + 2.00
NOV 1332 + 37                                                                      DEC 104.50 + 2.05
JAN 1342 + 39                                                                       MAR 106.60 + 2.00
MAR 1354 + 41                                                                     MAY 107.75 + 2.00
MAY 1367 + 42                                                                     JUL 108.80 + 1.90
JUL 1381 + 43                                                                       SEP 109.80 + 1.80
SEP 1392 + 44                                                                       DEC 111.50 + 1.80
NOV 1409 + 46                                                                     MAR 113.25 + 1.80