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

Coffee Market Report

10 Sep 2020

The November to December contract arbitrage between the London and New York markets narrowed yesterday; to register this at 64.63 usc/Lb. This equates to 50.16% 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 28,081 bags yesterday to register these stocks at 1,152,058 bags, with 93.7% of these certified stocks being held in Europe at a total of 1,079,029 bags and the remaining 6.3% being held in the USA at a total of 73,029 bags. There is meanwhile a smaller in number 1,415 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 4,344 bags. The Certified washed Arabica Stocks held against the New York exchange continue to be drawn down, thus giving support to the markets which has been seen over the past week. The Certified Stocks levels are currently hovering around a 20-year low point.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 1,667 bags over the weeks of trade leading up to Monday 7th. September, to see these stocks registered at 1,827,833 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 Cocoa and London Robusta Coffee Markets ended the day on a positive note, while the Sugar and New York Arabica Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.3600% higher; to see this index registered at 409.8700. The day starts with the U.S. Dollar steady, trading at 1.300 to Sterling, at 1.182 to the Euro and with the US Dollar buying 5.309 Brazilian Real.

The London and New York markets started the day yesterday trading on a softer note, both markets soon came under pressure to accentuate the losses for the morning trade. As the afternoon progressed the London and New York markets started to attract a degree of buying support to see both markets trend positive, the London market was able to hold onto the gains of the day to close on a modest positive note, while the New York market fell back from the highs and under strong selling pressure dipped back into negative territory to see the market settle on a softer note for the day.

The London market ended the day on a modest positive note and with 35.71% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 72.22% of the earlier losses of the day intact. This close does little to inspire confidence and provides little indication for direction to possibly set the markets for a hesitant near to steady start against the prices yesterday, as follows:

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

NOV 1416 + 5                                                                  DEC 128.85 – 3.25
JAN 1428 + 4                                                                   MAR 129.65 – 3.10
MAR 1441 + 4                                                                 MAY 130.45 – 3.05
MAY 1454 + 4                                                                 JUL 131.30 – 3.00
JUL 1467 + 4                                                                   SEP 132.00 – 2.95
SEP 1481 + 5                                                                   DEC 132.75 – 2.90
NOV 1494 + 5                                                                 MAR 133.75 – 2.90
JAN 1505 + 5                                                                  MAY 133.90 – 2.90