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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

25 Oct 2018
The January 2019 to December 2018 contracts arbitrage between the London and New York markets widened yesterday, to register this at 43.13 usc/Lb., while this equates to 35.61% 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 2,270 bags yesterday; to register these stocks at 2,432,320 bags. The bags pending grading for the exchange, registered an increase by 2,662 bags pending grading for this exchange; to register these pending grading stocks at 72,559 bags.

It was a mixed day in the commodity markets yesterday, as Oil futures absorbed some of the brunt of the political discomfort that has arisen between Saudi Arabia and USA. The US Dollar lost some ground on the day and the Euro, posted a mild recovery. It was a softer day for the Oil markets, Cocoa, Cotton, Copper, Orange Juice, Sugar, Soybean, although the rest of the board managed to finish in mostly steady or positive territory, Corn, Wheat, Sugar, Coffee, Gold, Silver, Platinum and Palladium all positive on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is hardly changed; to see this index registered at 415.69. The day starts with the U.S. Dollar steady and trading at 1.298 to Sterling, at 1.146 to the Euro and with the Dollar buying 3.694 Brazilian Real, while North Sea Oil is steady and is selling at US$ 77.82 per barrel.

The London coffee market opened the day on a softer note yesterday, followed by a similarly softer opening in New York, to see both markets on a lower track in the morning session. The business day opened in the America’s with an upward progression in New York, to see this market recover the losses of the morning session, through par, into positive territory, London remained steady in negative territory. A push lower in New York settled the market within rangebound territory by midsession, while London treaded in a softer range. The latter half of the day saw another positive push in New York as the day progressed into the second half of the session to trigger stops along the way and track rapidly upward in New York with London following to recover from losses and move back through par. The upward momentum quickly built in New York supported by fresh and heavy volume of trade, to see this market settle on the day, at the high. The performance in London, was more muted volume terms and this market finished the day, just below par having regained lost ground during the session, to set the markets close yesterday, as follows:

London Robusta US$/MT New York Arabica Usc/Lb.

NOV  1,693 - 3                 DEC  121.10 + 3.45
JAN   1,719 - 2                 MAR 124.85 + 3.40
MAR 1,736 - 1                 MAY 127.40 + 3.40
MAY 1,751 - 1                 JULY 129.75 + 3.40
JULY 1,765 - 1                SEPT 132.00 + 3.40
SEPT 1,779 - 1                DEC  135.30 + 3.35
NOV  1,793 - 1                MAR 138.55 + 3.35
JAN   1,806 - 1                MAY 140.50 + 3.35
MAR 1,820 - 1                JULY 142.20 + 3.35
MAY 1,832 - 1                SEPT 143.75 + 3.25