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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

27 Aug 2020

The November to December contract arbitrage between the London and New York markets broadened yesterday; to register this at 57.38 usc/Lb. This equates to 46.99% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 373 bags yesterday to register these stocks at 1,307,150 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,230,080 bags and the remaining 5.9% being held in the USA at a total of 77,070 bags. There is meanwhile a larger in number 9,280 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 1,600 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 8,500 bags over the weeks of trade leading up to Monday 24th. August, to see these stocks registered at 1,818,000 bags, on the day.

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 London Robusta Coffee market ended the day on a positive note, while the Sugar, Cocoa and New York Arabica Coffee Market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.0509% higher; to see this index registered at 408.7246. The day starts with the U.S. Dollar steady, trading at 1.321 to Sterling, at 1.182 to the Euro and with the US Dollar buying 5.608 Brazilian Real.

The London and New York markets started the day yesterday trading on a positive note, both markets continued this firmer track into the early afternoon trade. As the afternoon progressed the New York market fell back from the highs of the day to trade on a modest positive note before attracting late in the day selling pressure to see the market fall back from a 3-week high to settle on a softer note for the day, while the London market also attracted late in the day selling pressure but limited the losses for the day and settled on a modest positive note.

The London market ended the day on a positive note and with 22.22% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 50% of the earlier losses of the day intact. This mixed close does little to indicate direction and with the continued weak nature of the Brazil Real against the US Dollar one might think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                                        NEW YORK ARABICA USc/Lb.

SEP 1521 + 9                                                                     SEP 122.80 – 0.40
NOV 1427 + 6                                                                    DEC 122.10 – 0.85
JAN 1435 + 9                                                                     MAR 123.50 – 0.95
MAR 1445 + 9                                                                   MAY 124.45 – 0.85
MAY 1456 + 9                                                                   JUL 125.25 – 0.75
JUL 1467 + 8                                                                     SEP 125.85 – 0.65
SEP 1479 + 8                                                                     DEC 126.70 – 0.55
NOV 1492 + 8                                                                   MAR 127.60 – 0.60