The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of December 2020 were 41.77% higher than the same month in the previous year, to total 3.91 million bags, this number made up of 3.53 million bags of Arabica Coffee up 46.32% from the same month last year and 380,669 bags of Robusta Coffee up 10.06% from the same month last year.

The Coffee Exporters Association in Brazil Cecafé have since reported the cumulative exports of green coffee for the first six months of the July 2020 to June 2021 Brazil coffee year, to be 23.04% higher, overall at the end of December than the same period in the previous coffee year at a total of 22.47 million bags, this large increase in reported exports for this month of December when compared to the same month in the previous years can be attributed to the biennially bearing larger production for the 2020 coffee year.

The coffee markets meanwhile continue to reflect the evidence of global surplus coffee supply, which has encouraged speculative short selling and has overshadowed the markets to levels that are considered to be unsustainable low prices for many producers. Particularly so for the producers of relatively high cost of production washed Arabica coffees, with many of these producers likely to continue to suffer from declining yields, as a result of reduced inputs into their farms.

Evidence of this can be seen in the washed arabica harvest to come from Mexico, Guatemala, Honduras, Nicaragua, Costa Rica and El Salvador is nearing completion, a number of Central American countries having endured infrastructural damage through the back-to-back hurricanes which swept through Honduras and Nicaragua late last year. The Mexican and Central American washed arabica producer bloc was forecast ahead of the harvest of this October 2020 to September 2021 coffee year, to be collectively 1.12% lower year on year when compared to the same twelve months in 2019/20, and 11.56% lower than production in 2018/19.

The record 2020/21 from largest coffee producer Brazil, continues to flow to consumer markets, as is evident in the monthly exports registered, and this record production has for the most part, already been factored into the relatively low values on the coffee markets. Forecasts continue to come to the markets meanwhile, for what is widely anticipated to be a reasonable, but nevertheless smaller Brazil natural arabica coffee crop to come from this country's seasonal July 2021 to June 2022 coffee year. This smaller harvest that is due to start mid this year, could contribute toward fund and speculative short covering and some degree of buoyancy for the volatile New York coffee market for the second half of the year. Meanwhile, following on from the widely dispersed and above average rainfall over December, some of the leading coffee districts in Brazil have experienced lower than average rainfall for the first few weeks of this year, and there is a close watch upon the weather reports out of this leading producer, as the new biennial bearing arabica coffee crop develops on the trees.

The March 2021 to March 2021 contract arbitrage between the London and New York markets narrowed yesterday: to register this at 66.01 usc/Lb. This equates to 51.92% 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 22,815 bags yesterday, to register these stocks at 1,542,125 bags, with 94.5% of these certified stocks being held in Europe at a total of 1,457,849 bags and the remaining 5.5% being held in the USA at a total 84,276 bags. There was meanwhile a smaller in number 11,630 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 120,587 bags.

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 18th. January, to see these stocks registered at 2,364,500 bags, on the day.

It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a soft 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 0.4932% lower; to see this index registered 470.1440. The day starts with the U.S. Dollar, trading at 1.366 Sterling, at 1.214 the Euro and with the US Dollar buying 5.358 Real.

The New York and London markets started the day yesterday trading on a softer note, both markets continued on this softer path for the remainder of the early morning session before coming under a degree of support to see the markets trend firmer for the late morning session. As the afternoon progressed the New York market hit a ceiling limiting the gains for the day, while the London market continued on a firmer path to see the market settle on a modest positive note for the day. The New York market recovered most of the earlier in the day losses to settle on a softer note for the day.

The London market ended the day on a positive note with 83.33% of the earlier gains of the day intact, while the New York market ended the day on a negative note with 28.57% of the earlier losses of the day intact. The mixed close does little to indicate direction for the day today, albeit that the New York market recovered most of the earlier in the day losses, to possibly see the markets 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.

MAR 1348 + 5                                          MAR 127.15 – 1.00
MAY 1358 + 5                                          MAY 129.25 – 1.00
JUL 1372 + 5                                            JUL 131.10 – 1.05
SEP 1391 + 6                                            SEP 132.90 – 1.10
NOV 1409 + 5                                          DEC 134.85 – 1.15
JAN 1423 + 5                                            MAR 136.65 – 1.15
MAR 1438 + 4                                          MAY 137.40 – 1.25
MAY 1453 + 2                                          JUL 138.05 – 1.30