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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

09 Jan 2019

9th January, 2019.

The International Coffee Organisation have come forth with their latest report to confirm global coffee exports rose 12.7% year on year, in November to a total 20.55 million bags. This total includes arabica coffee exports at 13.65 million bags, which registered an 11.6% increase on that of the previous year and the balance, made up of Robusta coffees, which registered a 14.9% increase on that of the same time in last year.

The March to March contracts arbitrage between the London and New York markets widened yesterday, to register this at 34.47 usc/Lb., while this equates to 32.81% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange registered an increase by 5,199 bags yesterday to register these stocks at 2,457,730 bags. There was a decrease of 5,420 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 45,909 bags.

It was a buoyant day on the commodity markets yesterday, the trade talks between China and USA grabbing business news headlines to boost positive sentiment, the US Dollar registered gains on the day. It was a positive day for the Oil markets, Sugar, Copper, Orange Juice, Coffee, Silver and Palladium and a softer day for Cotton, Cocoa, Corn, Wheat, Soybean, Gold and Platinum markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.413% higher; to see this index registered at 401.45. The day starts with the U.S. Dollar steady and trading at 1.2741 to Sterling, at 1.146 to the Euro and the US Dollar buying 3.713 Brazilian Real, while North Sea Oil is steady at US$ 57.94 per Barrel.

The coffee markets started the day in muted volume with London marginally below par and New York in modestly positive territory, both markets treaded around unchanged in the early morning. The overall positive sentiment in across the commodity sector assisted a buoyant day in both markets, while the Brazil Real has continued to strengthen against the US Dollar, removing the likelihood of strong origin selling activity from this sector. The day progressed in a positive manner with both New York and London tracking higher into the afternoon in London and the midmorning session in New York, when the highs attained in the latter market introduced speculative selling activity back to the floor. The volumes in New York picked up pace as fresh volumes came in, to see this market lose a degree of the gains of the day in New York but recover toward the end of the session, while it was a comparatively slow volume day in London, this market similarly set the close near to the days high and the markets set the close yesterday in positive territory, as follows:

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

JAN   1,538 + 14               MAR  105.05 + 2.30
MAR 1,556 + 14               MAY  108.10 + 2.35
MAY 1,574 + 14               JULY  110.95 + 2.40
JULY 1,591 + 16              SEPT  113.75 + 2.45
SEPT 1,609 + 17              DEC   117.60 + 2.40
NOV 1,628 + 18               MAR 121.30 + 2.40
JAN   1,645 + 17              MAY 123.70 + 2.40
MAR 1,665 + 16              JULY 126.00 + 2.40
MAY 1,687 + 16              SEPT 128.20 + 2.45
JULY 1,704 + 16              DEC  131.30 + 2.45