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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

18 Aug 2017

17th. August, 2017.

The November to December contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.33 usc/Lb., while this equates to a 30.73% 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 6,905 bags yesterday; to register these stocks at 1,599,942 bags. There was meanwhile a decline in the number of bags pending grading for this exchange by 6,674 bags; to register these pending grading stocks at 93,692 bags.

The commodity markets had a mixed overall lower day, focus on the minutes from US Federal Reserve policy meetings yesterday provided little guidance as to another interest rate hike to come (or not). Although the latest Pacific geopolitical impasse side lined, reports of disruptions flaring within the political arena in the U.S.A., may have contributed toward a degree of uncertainty as the markets drew to a close yesterday. The U.S. Dollar lost ground against a basket of currencies as the day progressed. It was a lower result for the Oil markets, Cocoa, Coffee, Corn, Cotton, Copper, Sugar, Soybeans, Wheat, with robusta Coffee narrowly in the plus, it was a positive day for Copper, Soybean, Orange Juice, along with Gold, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.475% lower, to see this Index registered at 395.44. The day starts with the U.S. Dollar trading at 1.29 to Sterling and at 1.178 to the Euro, while North Sea Oil is steady and is selling at $ 49.99 per barrel.

The coffee markets started the day yesterday in positive territory as underlying buyer support made an appearance at the outset to provide a boost to the early morning session in relatively active starting volume. The London market held within the positive range for the first half of the session yesterday, volume of trade tapered lower while the absence of origin seller participation assisted to maintain the early gains. The positive gains attained in the New York market gradually found overhead selling participation to see this market back toward par ahead of the start of the business day in the Americas with a further push lower in a continuation of technical spread and speculative trade to reach the low of the day in negative territory, by midsession. London followed suit to break below par and into negative territory as the afternoon progressed. There was a degree of recovery posted in both markets toward the latter half of the day, in London volume of trade picked up pace to see this market push through to positive territory once more, New York settled into a narrow and negative range as the day drew to a close. The coffee markets finished the day, mildly positive for the front months in London and softer in New York, after another sizable volume day in both markets, to set the close yesterday, as follows:


SEP   2057 + 1                            SEP   130.95 – 1.05
NOV 2054 + 1                            DEC  134.50 – 1.05
JAN  2035 – 3                            MAR  138.10 – 1.00
MAR 2026 – 7                            MAY 140.40 – 0.95
MAY 2034 – 8                            JUL   142.60 – 0.95
JUL   2053 – 9                            SEP   144.70 – 1.00
SEP   2064 – 11                           DEC 147.75 – 1.05
NOV 2076 – 9                             MAR 150.70 – 1.05
JAN   2082 – 9                            MAY 152.35 – 1.10
MAR 2087 – 9                            JUL  153.90 – 1.10