Coffee Market Report

The September-to-September contract arbitrage between the London and New York markets widened yesterday; to register this at 81.56 usc/Lb. This equates to 52.47% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,389 bags yesterday, to register these stocks at 2,146,156 bags, with 93.46% of these certified stocks being held in Europe at a total of 2,005,695 bags and the remaining 6.54% being held in the USA at a total 140,461 bags. Of this, a total 1,145,002 bags, or 53.35% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 38.64% of these certified coffees, originating from Honduras. There was meanwhile a larger in number 9,321 bags decrease to the number of bags pending grading to the exchange; to register these pending grading stocks at 61,930 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 16,167 bags over the weeks of trade leading up to Monday 14th. June, to see these stocks registered at 2,570,167 bags, on the day.

It was a mixed day on the commodity markets yesterday, as the US Federal Reserve announced projections on the first post pandemic interest rate hikes. The Coffee, Corn, Wheat, Silver and Palladium market ended the day on a positive note, the Sugar market remained unchanged on the day, while the Cocoa, Soybean, Gold and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.399 Sterling, at 1.199 the Euro and with the US Dollar buying 5.055 Brazil Real.

The New York and London markets started the day yesterday trading on a modest firmer note. Both markets gained buying support early in the day to see the markets trend firmer in the early morning session. As the afternoon progressed the markets came under a marginal degree of selling pressure to see both the New York and the London market drop back from the early morning highs, the markets hit a floor but quickly recovered to be seen to trend firmer towards the close, both the New York and the London markets would hit a ceiling late in the day to see the markets settle near to the highs of the day at the close.

The London market ended the day on a positive note and with 90% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 69.35% of the gains of the day intact. This firmer close might inspire some degree of confidence, with both the New York and the London markets retaining most of the earlier in the day gains, one might think that the markets are due for follow through steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                             NEW YORK USC/LB.

JUL 1600 + 27                                                        JUL 153.35 + 2.15
SEP 1629 + 29                                                        SEP 155.45 + 2.20
NOV 1648 + 28                                                      DEC 158.45 + 2.25
JAN 1662 + 28                                                       MAR 161.10 + 2.30
MAR 1674 + 28                                                     MAY 162.40 + 2.30
MAY 1686 + 28                                                     JUL 163.50 + 2.35
JUL 1701 + 28                                                       SEP 164.40 + 2.50
SEP 1714 + 28                                                       DEC 165.60 + 2.75