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

Coffee Market Report

10 Jun 2021

The National Coffee Growers Federation in Colombia have not reported the country’s coffee production figures for the month of May, due to the unusual circumstances surrounding the national social unrest and protests against a proposed tax reform.

The National Coffee Growers Federation in Colombia have reported that the country’s coffee exports for the month of May were 467,000 bags or 52% lower than the same month last year, at a total of 427,000 bags. This due to the national strike which has impacted the flow of coffee from the interior, as road blockades around the country are inhibiting exporters from delivering coffee to the ports. This has contributed to the country’s cumulative coffee exports for the first eight months of the present October 2020 to September 2021 coffee year to be 302,000 bags or 3.64% higher than the same period in the previous coffee year, at a total of 8,593,000 bags.

The July-to-July contract arbitrage between the London and New York markets widened yesterday; to register this at 85.44 usc/Lb. This equates to 54.35% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,680 bags yesterday, to register these stocks at 2,115,977 bags, with 93.36% of these certified stocks being held in Europe at a total of 1,975,516 bags and the remaining 6.65% being held in the USA at a total 140,461 bags. Of this, a total 1,143,402 bags, or 54.04% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 37.76% of these certified coffees, originating from Honduras. There was meanwhile a smaller in number 2,916 bags increase to the number of bags pending grading to the exchange; to register these pending grading stocks at 100,454 bags.

It was a softer day on the commodity markets yesterday as the U.S based investors still await fresh economic data on inflation that is due to be released later this week. The Sugar, Corn and Silver markets ended the day on a positive note, while the Cocoa, Coffee, Wheat, Soybean, Gold, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.411 Sterling, at 1.216 the Euro and with the US Dollar buying 5.062 Brazil Real.

The New York market started the day yesterday trading on a modest softer note, while the London market started the day yesterday trading on a firmer note. Both markets gained momentum early in the day only to hit a ceiling in early trade limiting the gains for the day. As the afternoon progressed the New York and London markets attracted a degree of selling pressure to see the markets trend softer for the early afternoon session. The late afternoon session saw the markets drop back to hit a floor, the New York market recovered to rally late in day recovering most of the day’s losses, while the London market followed suit in a more sedate manner.

The London market ended the day on a negative note and with 50% of the losses of the day intact, while the New York market ended the day on a likewise negative note and with 27.78% of the losses of the day intact. This softer close, albeit that the markets recovered from the earlier in the day losses, does little to indicate direction and one might think that 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 USC/LB.

JUL 1582 – 14                                                        JUL 157.20 – 0.50
SEP 1608 – 13                                                        SEP 159.30 – 0.55
NOV 1627 – 13                                                      DEC 162.20 – 0.60
JAN 1643 – 12                                                       MAR 164.75 – 0.65
MAR 1655 – 12                                                     MAY 166.05 – 0.65
MAY 1669 – 12                                                     JUL 166.95 – 0.60
JUL 1686 – 12                                                       SEP 167.50 – 0.60
SEP 1702 – 12                                                        DEC 168.10 – 0.65