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

Coffee Market Report

22 Apr 2021

The July-to-July contract arbitrage between the London and New York markets narrowed yesterday: to register this at 70.24 usc/Lb. This equates to 52.34% price discount for the London Robusta coffee market. This arbitrage may become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 278 bags yesterday, to register these stocks at 1,898,277 bags, with 95.1% of these certified stocks being held in Europe at a total of 1,805,099 bags and the remaining 4.9% being held in the USA at a total 93,178 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,765 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 11,833 bags over the weeks of trade leading up to Monday 19th. April, to see these stocks registered at 2,455,500 bags, on the day.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a positive track for the day. The Sugar, Cocoa, London Robusta Coffee, Gold, Silver, Platinum and Palladium markets ended the day on a positive note, while the New York Arabica Coffee market ended the day on a softer note. The day starts with the U.S. Dollar, trading at 1.393 Sterling, at 1.203 the Euro and with the US Dollar buying 5.569 Real.

The New York and London markets started the day yesterday trading to the north of par on a modest firmer note, this support was short lived as the markets quickly came under a degree of selling pressure to see both the New York and the London market drop back from the early morning highs and set on a softer path for the remainder of the morning session. As the afternoon progressed the markets recovered most of the earlier in the day losses before the New York market attracted selling pressure late in the day. The New York market managed to recover form these losses to settle near to par for the day, while the London market retained some of the earlier in the day gains to settle on a modest firmer note for the day.

The London market ended the day on a modest positive note and with 75% of the earlier gains the day intact, while the New York market ended the day on a modest close to par negative note and with 12.82% of the earlier losses of the day intact. This mixed close does little to indicate direction, albeit that the New York market recovered most of the earlier in the day losses to close near to par for the day, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:

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

JUL 1410 + 12                                               JUL 134.20 – 0.25
SEP 1427 + 13                                               SEP 136.10 – 0.25
NOV 1442 + 12                                             DEC 138.50 – 0.30
JAN 1455 + 11                                              MAR 140.50 – 0.30
MAR 1469 + 11                                            MAY 141.30 – 0.25
MAY 1486 + 11                                            JUL 141.75 – 0.20
JUL 1503 + 11                                              SEP 142.00 – 0.15
SEP 1519 + 11                                               DEC 142.35 – 0.15