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

Coffee Market Report

21 Mar 2019

The arbitrage for the May to May contracts between the London and New York markets narrowed yesterday, to register this at 26.94 usc/Lb., while this equates to 28.43% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,866 bags yesterday; to register these stocks at 2,497,239 bags. There was no change on the day to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,399 bags.

It was a mixed day on the commodity markets yesterday, the US Federal Reserve Bank post their midweek meetings announcing that further interest rate hikes are unlikely to come about in this calendar year, citing lower U.S. economic growth indicators. The U.S. Dollar lost ground on the day, with an overall positive result for the Oil markets, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver, Platinum and Palladium markets. It was lower day for Coffee, Cocoa and Sugar. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.14% higher; to see this index registered at 410.50. The day starts with the U.S. Dollar steady and trading at 1.315 to Sterling, at 1.139 to the Euro and with the U.S. Dollar buying 3.775 Brazilian Real.

The coffee markets opened the day on a buoyant note in London followed by a narrowly positive opening in New York, where both markets remained above par in the early morning. As trading volumes gathered momentum in New York with speculative and fund selling activity at the helm, this market met with volume selling activity within a void of underlying buyers to hold the floor, to see this market slip lower by midmorning. The London market followed suit to move through par and into negative territory by midmorning, just below par. The New York market attracted a measure of buyer support in the latter half of the day and a push upward away from the lows where this market steadied out and in a narrow range toward the close. The more muted activity in London saw this market trading either side of par in low volume and tight range. It was a hefty volume day in New York while London had a moderate volume day, to set the close in both markets marginally above the lows of the day and in negative territory, as follows:

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

MAR 1,485 - 13            MAY 94.75 - 1.90
MAY 1,495 - 13            JULY 97.45 - 1.95
JULY 1,502 - 14           SEPT 100.25 - 1.90
SEPT 1,515 - 15           DEC 104.10 - 1.90
NOV 1,532 - 14           MAR 107.95 - 1.90
JAN  1,550 - 14           MAY 110.40 - 1.85
MAR 1,569 - 14          JULY 112.75 - 1.75
MAY 1,588 - 14          SEPT 115.05 - 1.60
JULY 1,607 - 15         DEC 118.30 - 1.50
SEPT 1,625 - 15         MAR 121.55 - 1.45

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