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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

27 Mar 2020
May Arabica Coffee KCc1 closed 5.30 Us Cents down, or more than 4% to 124.65 Usc/lb, it had earlier touched a 2 and a half month high of 130.6 Usc/lb but reverted direction mid-way in the session to close down for the first time since 17th March, 2020.

The May to May contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 68.35 usc/Lb. This equates to 54.83% 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 11,351 bags yesterday; to register these stocks at 2,016,557 bags, with 90.5% of these certified stocks being held in Europe at a total of 1,824,194 bags and the remaining 9.5% being held in the USA at a total of 192,363 bags. There was meanwhile a larger in number increase by 40,157 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,157 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 17,667 bags over the weeks of trade leading up to Monday 23rd. March, to see these stocks registered at 2,411,333 bags, on the day.

The commodity markets were softer in trade yesterday, to see overall macro commodity index taking a sideways track for the day. The Cocoa, Coffee and Sugar markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.4984% lower; to see this index registered at 346.4801. The day starts with the U.S. Dollar steady, trading at 1.227 to Sterling, at 1.107 to the Euro and with the US Dollar buying 5.023 Brazilian Real.

The London and New York markets started the day yesterday trading on a modest positive note, both markets started to attract selling pressure to move into negative territory for the early afternoon trade, as the afternoon progressed the London and New York markets gained mid-session support to move onto a positive track, only to take a late in the day dive and close on a negative note.

The London market ended the day on a negative note and with 72% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 89.8% of the earlier losses of the day intact. This soft close does little to inspire confidence and with the uncertainty surrounding the Coronavirus pandemic, one might think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

MAY 1241 – 18                                                                        MAY 124.65 – 5.30
JUL 1278 – 19                                                                          JUL 124.15 – 4.80
SEP 1299 – 18                                                                          SEP 124.60 – 4.35
NOV 1313 – 19                                                                        DEC 125.15 – 4.05
JAN 1323 – 21                                                                          MAR 126.40 – 3.55
MAR 1334 – 21                                                                        MAY 127.50 – 3.35
MAY 1349 – 21                                                                        JUL 128.45 – 3.20
JUL 1369 – 22                                                                          SEP 129.40 – 3.10