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

Coffee Market Report

29 Apr 2016

 

The July on July contracts arbitrage between the London and New York markets narrowed yesterday, to register at 49.37 usc/Lb., while this equates to a 40.82% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, with the good discount most likely due to remain in place for the foreseeable future, in line with steady robusta shipments out of Vietnam.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,025 bags yesterday; to register these stocks at 1,386,066 bags. The number of bags pending grading to the exchange was unchanged on the day; to register these pending grading stocks at 2,889 bags.

It was a mostly positive day in the commodity markets yesterday, the focus within the financial sector moved across the Pacific, where the Bank of Japan’s surprise decision to maintain interest rates steady contributed to a stronger Yen on the day, whereas the US Dollar had a softer day against major currencies. It was a positive for the Oil markets, Wheat, Corn, robusta Coffee and Soybean posted a recovery on the day, a firm day for Gold, Silver, Platinum and Palladium markets, a steady day for Copper and Orange Juice. It was however, a softer close on the day for Cotton, arabica Coffee, Cocoa and Sugar markets yesterday. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.5392% higher; to see this Index registered at 404.33. The day starts with a softer U.S. Dollar which is trading at 1.464 to Sterling and 1.139 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 46.13 per barrel.

The Coffee markets started the day yesterday narrowly softer in London and to the positive in New York, to take a more positive track for both markets as the morning progressed, although modest volume for both markets. The opening of the day in the America’s introduced a bout of fresh speculative sellers to the floor in New York pushing this market through to negative territory once more, with London following but this market registering a recovery near to unchanged with underlying buyer support providing a boost and the latter half of the day in London, in mildly positive territory. The New York market posted a recovery from earlier losses incurred, back toward unchanged as the tail end of the session but with the US Dollar oscillating in value against other currencies and activity in New York tapering off toward the close, although a choppy session, the day could be considered range bound and the end saw New York regain much of the ground lost over the day, although a finish in negative territory. The close after a fair volume day was set near to the days high in London and near unchanged and closer to the lows of the day in New York, to set the close yesterday, as follows:

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

MAY   1542 + 7                           MAY 120.40 – 0.65
JUL     1578 + 5                           JUL   120.95 – 0.55
SEP     1598 + 3                           SEP   122.75 – 0.55
NOV   1617 + 3                           DEC  125.15 – 0.50
JAN    1634 + 3                           MAR 127.55 – 0.50
MAR  1649 + 4                            MAY 129.00 – 0.50
MAY  1669 + 5                            JUL   130.35 – 0.50
JUL    1687 + 5                            SEP   131.50 – 0.50
SEP    1705 + 5                            DEC  133.30 – 0.50
DEC   1725 + 5                            MAR 135.00 – 0.50