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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

27 Jan 2017
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 53.11 usc/Lb., while this equates to a 34.50% price discount for the London robusta coffee market. This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 1,514 bags yesterday; to register these stocks at 1,288,675 bags. The certified stocks reported a further 2,577 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36.344 bags.

The commodity markets were mixed in trade yesterday, the leading oil markets took a positive turn while the U.S. Dollar gained strength over the day, most other commodities on the index taking a softer track for the day. Apart form the oil markets it was a mildly positive day for Cotton and Sugar, with the rest of the board finishing the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.44% lower, to see this Index registered at 429.83. The day starts with the U.S. Dollar near to steady and trading at 1.255 to Sterling and 1.067 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 55.77 per barrel.

The London and New York markets started the day incrementally positive in London and slightly softer in New York yesterday. It was a relatively modest volume and muted day in London with Vietnam entering Tet New Year celebrations and this market held either side of unchanged throughout the morning. Following a firmer start to the day, the New York arabica market lost ground as the fundamentals provided little fresh news to the speculative sector and the macro influence of the firmer U.S. Dollar leant in to apply seller pressure across the commodities sector. The latter day performance in both markets was for a steadier day, although in negative territory and a close in London just off of the days low in that market, and in New York around the middle of the days trading range, to set the close on a softer note after a fair volume day in both markets, against the prices set yesterday, as follows:


JAN   2222 – 21
MAR 2210 – 21                          MAR  151.45 – 1.45
MAY 2223 – 21                          MAY  153.95 – 1.40
JUL   2230 – 20                          JUL    156.30 – 1.35
SEP   2232 – 22                          SEP    157.55 – 1.30
NOV 2232 – 22                          DEC   161.60 – 1.25
JAN   2230 – 22                         MAR  164.50 – 1.20
MAR 2229 – 22                         MAY  166.10 – 1.20
MAY 2231 – 22                         JUL    167.65 – 1.20
JUL   2241 – 22                         SEP    169.20 – 1.10