Coffee Market Report
The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of December was 63,000 bags or 3.75% higher than the same month last year, at a total of 1,743,000 bags. This has contributed to the countries cumulative production for the first three months of the present October 2020 to September 2021 coffee year to be 210,000 bags or 4.61% lower than the same period in the previous coffee year, at a total of 4,345,000 bags.
The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of December were 86,000 bags or 6.20% lower than the same month last year, at a total of 1,300,000 bags. This has contributed to the country’s cumulative coffee exports for the first three months of the present October 2020 to September 2021 coffee year to be 147,000 bags or 3.91% lower than the same period in the previous coffee year, at a total of 3,612,000 bags.
The Ivory Coast as west Africa’s leading robusta coffee producer, have reported that their coffee exports for the month of November were 109,483 bags or 71.30% lower than the same month last year, at a total of 44,067 bags. This has contributed to their country’s cumulative coffee exports for the first three months of the October 2020 to September 2021 coffee year to be 331,666 bags or 63.44% lower than the same period last year, at a total of 191,134 bags.
There is less than a month of trading days against the London market ahead of the Eve of the Tet New Year holiday in Vietnam, set to begin on Friday 12th. February this year. This is a traditionally a quiet couple of weeks for coffee trading activity within the country as preparations begin some days ahead, and, as families gather for the week of celebrations, bringing in the Year of the Buffalo. Although, Covid19 related restrictions on movement and travel, could dampen the celebrations to a certain extent, which would ordinarily see an exodus from urban environments, to traditional family homes or holiday destinations.
The lead up to Tet celebrations would usually be considered a possible short term negative factor for sentiment within the London market, as farmers are anticipated to be looking to sell new crop stocks to finance these festivities. Most Vietnamese coffee farmers are now multi cropping their farms as an insurance against soft coffee reference prices and with the Vietnamese coffee farming community relatively sophisticated in commercial terms, one might anticipate that selling activity will be met with some degree of internal market price resistance, and not a flood of new crop coffee coming to the market in the coming weeks.
The March 2021 to March 2021 contract arbitrage between the London and New York markets widened yesterday: to register this at 60.50 usc/Lb. This equates to 49.96 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 8,250 bags yesterday, to register these stocks at 1,467,023 bags, with 94.2% of these certified stocks being held in Europe at a total of 1,381,680 bags and the remaining 5.8% being held in the USA at a total 85,343 bags. There was meanwhile a smaller number 6,180 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 94,680 bags. This marks the fifth consecutive day that the Certified washed arabica stocks held against the New York exchange were seen to increase.
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 and New York Arabica Coffee markets ended the day on a positive note, while the Sugar and London Robusta Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1901% higher; to see this index registered 469.3291. The day starts with the U.S. Dollar, trading at 1.356 Sterling, at 1.226 the Euro and with the US Dollar buying 5.410 Real.
The London and New York markets started the day yesterday trading close to par on a modest soft note, the London market continued on a downward path for the remainder of the morning session while the New York market was seen to trend firmer to hit a ceiling and limit the gains for the morning session. As the afternoon progressed both the New York and the London markets were seen to trend softer, this saw the New York market settle on a near to unchanged positive note for the day, while the London market was seen to settle near to the lows of the day on a negative note for the day.
The London market ended the day on a negative note with 90.91% of the earlier losses of the day intact, while the New York ended the day on a modest positive note with 10.81% of the earlier gains of the day intact. This mixed close does little to indicate direction, albeit that the New York markets recovered from the earlier in the day losses to settle near to par for the day, and one might think that the markets are due for little better than a hesitant steady start to early trade today, against the prices set on yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAR 1336 – 20 MAR 121.10 + 0.20
MAY 1347 – 19 MAY 123.10 + 0.15
JUL 1360 – 19 JUL 124.95 + 0.20
SEP 1376 – 18 SEP 126.60 + 0.20
NOV 1391 – 18 DEC 128.50 + 0.25
JAN 1407 – 18 MAR 130.25 + 0.35
MAR 1422 – 18 MAY 131.05 + 0.35
MAY 1439 – 18 JUL 131.80 + 0.35
