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

Coffee Market Report

18 Oct 2019

The December to January contracts arbitrage between the New York and London markets narrowed yesterday; to register this at 37.24 usc/Lb. This equates to 40.1% 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 5,430 bags yesterday; to register these stocks at 2,250,845 bags, with 86.8% of these certified stocks being held in Europe at a total of 1,954,295 bags and the remaining 13.2% being held in the USA at a total of 296,550 bags. There was a larger in number decrease to the number of bags pending grade to this exchange, by 9,100 bags; to register these pending grading stocks at 41,479 bags.

The commodity markets were mostly firmer in trade yesterday, to see overall macro commodity index taking a firm sideways track for the day. The Oil, Natural Gas, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Sugar, Cocoa, Coffee and Orange Juice markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.170 % higher; to see this index registered at 400.379. The day starts with the U.S. Dollar steady and showing signs of buoyancy, trading at 1.285 to Sterling, at 1.112 to the Euro and with the US Dollar buying 4.163 Brazilian Real.

The London and New York markets started the day yesterday trading on a modest positive note, both the London and the New York market maintained this stance into the early afternoon trade. As the afternoon progressed both markets continued to trade around par, only to encounter late in the day selling pressure and to trade in negative territory for the late afternoon trade.

The London market ended the day on a negative note, and with 85% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, and with 54% of the earlier losses of the day intact. This close does little to inspire confidence and one would expect the markets are due for little better than a near to steady start for early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                                  NEW YORK ARABICA USc/Lb.

NOV 1194 – 17                                                             DEC 92.90 – 0.65
JAN 1227 – 13                                                              MAR 96.40 – 0.65
MAR 1252 – 12                                                            MAY 98.70 – 0.65
MAY 1277 – 12                                                            JUL 100.80 – 0.70
JUL 1304 – 12                                                              SEP 102.70 – 0.70
SEP 1330 – 13                                                              DEC 105.55 – 0.70
NOV 1358 – 13                                                            MAR 108.35 – 0.65
JAN 1386 – 13                                                              MAY 110.05 – 0.60
MAR 1413 – 14                                                            JUL 111.75 – 0.50