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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

15 Apr 2019

12th. April, 2019.
The July to July contract arbitrage between the London and New York markets narrowed yesterday, to register this at 28.24 usc/Lb., while this equates to 30.47% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange registered a decrease by 1,915 bags yesterday, to set these stocks at 2,483,254 bags. There was an increase of 4,699 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 7,897 bags.

It was a mostly softer day on the commodity markets yesterday, the latest round of economic data to come from USA saw an improvement in sentiment and the US Dollar gained territory against a basket of other currencies. The decision by the European Union to extend the Brexit deadline similarly provided a boost to investor confidence. It was a softer day for the Oil markets, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Corn, Soybean, Gold, Silver, Platinum and Palladium markets, with Wheat the only positive close on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.13% lower; to see this index registered at 407.72. The day starts with the U.S. Dollar trading at 1.307 to Sterling, at 1.128 to the Euro and with the US Dollar buying 3.857 Brazilian Real.

The London market started the day on a steady note and in limited volume around unchanged, the New York market opened the day on a mildly softer note, both markets remained within a narrow range just below par for the first few hours of the session. The generally bearish influence across the commodities sector spilled into the coffee sector to see both markets pulled lower toward midsession. The lows touched triggered fresh stops and both markets set a gradually lower track in the afternoon, with selective buyer activity coming in to provide support as the day moved toward the close. The London market broke lower as the day drew to a close and finished the day on the lows after a modest volume session.

The New York market registered massive volume on the day, with a total across the board 176,379 lots traded on the day and 91% of that volume traded on the first three months of the board. It was a lower overall finish to the day in the coffee markets. New York is trading within a low range in territory last seen 13 years ago, and yesterday the lows touched brought almost disproportionate activity to the floor which saw the trading volume double up in the space of a couple of hours, the selling activity outweighing buyer absorption and hefty spread activity ahead of the first notice day on 22nd April for the prompt month, to set the close yesterday, as follows:

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

MAY 1,392 - 32               MAY    90.25 - 4.00
JULY 1,421 - 31               JULY   92.70 - 4.05
SEPT 1,442 - 28               SEPT   95.30 - 3.90
NOV 1,463 - 25                DEC    99.25 - 3.75
JAN   1,482 - 25               MAR 103.05 - 3.65
MAR 1,501 - 25               MAY 105.50 - 3.60
MAY 1,522 - 25               JULY 107.75 - 3.60
JULY 1,543 - 25              SEPT 109.90 - 3.55
SEPT 1,563 - 25              DEC   113.05 - 3.45
NOV 1,581 - 25               MAR 116.15 - 3.40