Coffee Market Report
The analysts Safras & Mercado have reported that harvesting of the new Brazil coffee crop has been completed. This report is based on the Safras & Mercado forecast for a new crop of 68 million bags or 15.80% higher than the previous biennially bearing lower crop in the 2019/2020 crop year. Of this total volume, arabica coffee production in the 2020/2021 crop year is seen to be 17.94% up from the previous year at their estimated 48 million bags, while robusta output is seen at 20 million bags, up 9.89% year on year.
The April 2020 to March 2021 new crop from Indonesia is flowing to the internal market within Indonesia, with current supplies remaining buoyant. The internal competition between their growing domestic roasting and soluble manufacturers and the export market, is seen to be subsiding as coffee supply to adequately fuel both sectors, is becoming more apparent.
Trade remains lacklustre within Vietnam for the present with internal supplies all but depleted. All attention is now focused on the new October 2020 to September 2021 coffee crop season that is due to begin next month.
The November to December contract arbitrage between the London and New York markets narrowed yesterday; to register this at 55.09 usc/Lb. This equates to 46.67% price discount for the London Robusta coffee market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday to register these stocks at 1,116,966 bags, with 93.60% of these certified stocks being held in Europe at a total of 1,045,562 bags and the remaining 6.40% being held in the USA at a total of 71,404 bags. There was meanwhile a 40 bag decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,199 bags.
It was a neutral day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Cocoa Market ended the day on a positive note, while the Sugar and Coffee market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1619% higher; to see this index registered at 415.9705. The day starts with the U.S. Dollar steady, trading at 1.296 to Sterling, at 1.185 to the Euro and with the US Dollar buying 5.240 Brazilian Real.
The London market started the day yesterday trading on a marginally softer note while the New York market started the day trading around par, both markets soon came under selling pressure to accentuate the losses for the early morning trade. Both markets briefly saw some support toward mid-morning, the upward momentum was short lived, to see both markets move lower into softer territory and as the Americas came to the floor bringing increased volume to the afternoon session. The markets registered an improvement from the lows of the day, to see the New York market settle on a softer note and the London market following suit in a more sedate manner.
The London market ended the day with on a modest softer note with 16.13% of the earlier losses of the day intact, while the New York market ended the day on a likewise softer note with 50% of the earlier losses of the day intact. This close does little to indicate direction and one might think the markets are due 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.
NOV 1387 – 5 DEC 118.00 – 1.85
JAN 1401 – 7 MAR 119.65 – 1.90
MAR 1413 – 9 MAY 121.05 – 1.85
MAY 1427 – 9 JUL 122.40– 1.80
JUL 1440 – 10 SEP 123.45 – 1.75
SEP 1453 – 10 DEC 124.65 – 1.65
NOV 1466 – 10 MAR 125.75 – 1.60
JAN 1479 – 9 MAY 126.45 – 1.55
