Coffee Market Report

The analysts Safras & Mercado have estimated that almost 40% of the new Brazil coffee crop has already been harvested. Based on the forecast for a new crop of 56.50 million bags, the report would indicate that so far approximately 23 million bags of the new crop have been harvested. The coffee made up of around 15 million bags of conilon robusta coffee, which begin harvest earlier in the seasonal year, and approximately 8 million bags of arabica coffee harvested thus far.

The Brazil harvest this year is at a marginally slower pace, compared to the same week in 2020 when approximately 41% of the crop was harvested. There have been reports of scattered light rains over the Brazil Coffee Belt during June, however and for the most part weather conditions are seen to remain dry over the next few weeks.

The September-to-September contract arbitrage between the London and New York markets narrowed yesterday; to register this at 78.56 usc/Lb. This equates to 51.21% 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 1,402 bags yesterday, to register these stocks at 2,176,947 bags, with 93.59% of these certified stocks being held in Europe at a total of 2,037,412 bags and the remaining 6.41% being held in the USA at a total 139,535 bags. Of this, a total 1,150,751 bags, or 52.86% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.33% of these certified coffees, originating from Honduras. There was meanwhile a smaller in number 4,236 bags decrease to the number of bags pending grading to the exchange; to register these pending grading stocks at 33,213 bags.

It was a mixed day on the commodity markets yesterday, as investors await further news on the stance that the US Federal Reserve is going to take on the withdrawal of various economic stimulus models. The Sugar, London Robusta Coffee, Corn, Silver, Platinum and Palladium markets ended the day on a positive note, while the Cocoa, New York Arabica Coffee, Wheat, Soybean and Gold markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.392 Sterling, at 1.193 the Euro and with the US Dollar buying 4.914 Brazil Real.

The New York and London markets started the day yesterday trading on a modest close to par positive note, the markets would quickly drop back to trend softer for the remainder of the morning session. As the afternoon progressed the markets continued to oscillate trading either side of par during the early afternoon session. Both the New York and London markets gained momentum buoyed by a marginal degree of buying support to see the markets trend firmer, both markets hit a ceiling during the afternoon trade to see the New York market drop back from these highs and settle on a near to unchanged modest softer note at the close, while the London market maintained the gains from the afternoon session to 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 modest negative note and with 26.32% of the losses of the day intact. This mixed close does little to indicate direction, albeit that the New York market recovered from the majority of the earlier in the day losses to settle on a near to unchanged note for the day, making one think that the markets may be due for a hesitant but steady start to early trade today, against the prices set yesterday as follows, as follows:

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

SEP 1650 + 27                                                       SEP 153.40 – 0.50
NOV 1669 + 25                                                     DEC 156.25 – 0.50
JAN 1680 + 22                                                      MAR 158.85 – 0.50
MAR 1688 + 21                                                    MAY 160.15 – 0.55
MAY 1698 + 19                                                    JUL 161.20 – 0.65
JUL 1712 + 19                                                      SEP 162.10 – 0.65
SEP 1726 + 20                                                      DEC 163.20 – 0.65
NOV 1737 + 20                                                     MAR 164.25 – 0.65