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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

05 Nov 2020

The December 2020 to January 2021 contract arbitrage between the New York and London markets widened yesterday: to register this at 43.44 usc/Lb. This equates to 42.17% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange was seen to remain unchanged yesterday, to register these stocks at 1,152,585 bags, with 94% of these certified stocks being held in Europe at a total of 1,083,100 bags and the remaining 6% being held in the USA at a total 69,485 bags. There was meanwhile a larger in number 5,760 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 76,504 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 71,000 bags over the weeks of trade leading up to Monday 2nd. November, to see these stocks registered at 2,086,500 bags, on the day.

It was a marginally firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day, with many investors out of the field of play whilst awaiting a verdict on the Presidential Elections in the USA and the potential for a stimulus package being injected into the markets once an outcome has been reached. The Sugar, Cocoa and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.5255% higher; to see this index registered 414.8074.   The day starts with the U.S. Dollar marginally weaker but steady, trading at 1.297 Sterling, at 1.174 the Euro and with the US Dollar buying 5.664 Brazilian Real. 

The New York and London markets started the day yesterday trading around par on a modest soft note, both markets oscillated around par for most of the morning session. As the afternoon progressed the markets came under some degree of selling pressure to see the markets drop back from the highs of the day and trend softer for the early afternoon session. Late in the day saw the New York market recover to some degree, with both markets settling on a near to par modest softer note for the day.

The London market ended the day with on a modest negative note with 70% of the earlier losses of the day intact, while the New York market ended the day on a likewise modest negative note with 34.62% of the earlier losses of the day intact. This soft and lacklustre close, does little to inspire confidence and one might think that the markets are due for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

JAN 1313 – 14                                                           DEC    103.00 – 0.45
MAR   1326 – 14                                                              MAR   105.65 – 0.40
MAY   1340 – 13                                                               MAY  107.35 – 0.45
JUL   1357 – 13                                                                 JUL    109.10 – 0.40
SEP     1375 – 13                                                                SEP    110.55 – 0.40
NOV    1393 – 13                                                               DEC   112.50 – 0.25
JAN    1409 – 13                                                               MAR   114.25 – 0.15
MAR    1426 – 13                                                               MAY   115.40 – 0.15