Market Reports

Coffee Market Report April 26 2017

The coffee terminal market remained under pressure yesterday, with the London market in particular and coming off many months of speculative and fund net long holdings, suffering from steady position liquidation.  But with some thoughts that the London robusta coffee market and against still relatively tight global robusta coffee supply, might soon be seen to be somewhat oversold and due for some degree of stability and perhaps even, a modest positive correction.  

Reports from Vietnam estimate that the domestic coffee consumption is close to 2.9 million bags of coffee per annum and steadily increasing, while the exports of value added roast and ground and soluble coffee from the country are seen to be close to 2.5 million bags per annum.   With Vietnam coffee industries actively targeting the regional consumer markets and with and including one of Vietnams leading coffee roasting companies now targeting both on line and retail outlet sales of roast and ground and soluble coffee sales, within the Chinese market.  

Meanwhile the General Administration of Customs in China have reported that the countries import of coffee for the first three months of this year totalled a relatively modest 6,682 metric tons, while the country’s exports of coffee for the same period was a more substantial 9,968 metric tons.   These are relatively modest numbers, in terms of the global industry perspective that the growing coffee shop culture within the country and the growth of soluble coffee consumption, is due to fuel an active coffee market within this high population country. 

Nevertheless, and despite some question over the official coffee trade figures from China, there is no doubt that the regional Asian coffee market remains on a strong upside track and with this growing interest in coffee from the consumers in general, shall encourage increased regional production.  Suggesting that in time that the growing interest in coffee consumption within Asia shall assist to encourage the Asian coffee producers and with presently an approximate 32% share of global coffee production, shall steadily increase this share in the coming years.  

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 45.49 usc/Lb., while this equates to 34.36% price discount for the London robusta coffee market.  This still relatively low arbitrage remains not such an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 995 bags yesterday; to register these stocks at 1,410,688 bags.  There was meanwhile a larger in number 4,860 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 17,217 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 7,000 bags or 0.25% in the week of trade leading up to Monday 24th. April, to see these stock registered at 2,815,833 bags, on the day. 

The commodity markets while mixed in trade yesterday but with the U.S. dollar losing some muscle through the day, there was buoyancy within many markets and the macro overall commodity index had a modestly positive day.  The Oil, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat and Corn markets had a day of buoyancy, while the Natural Gas, Sugar, London robusta Coffee, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.54% higher, to see this Index registered at 409.38.  The day starts with the U.S. Dollar near to steady and trading at 1.284 to Sterling and at 1.094 to the Euro, while North Sea Oil is steady and is selling at $ 49.70 per barrel. 

The London market started the day yesterday on a steady note but soon dropping off to take a softer track south, while the New York market opened the day with modest buoyancy and with both markets retaining this stance through to the early afternoon trade.   As the afternoon progressed the London market lost some more weight before bouncing back to limit its losses, while the New York market trading erratically either side of par and perhaps assisted by the positive nature of the macro commodity index, took on a modestly positive stance for late in the day trade.   

The London market ended the day on a soft note but having recovered 69.2% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 50% of the earlier gains of the day intact.   This close and with the New York market having somewhat stabilised and with the London market having come back off seven and half month lows might well assist to contribute to some degree of confidence, to set the markets for a steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY     1884 – 22                                              MAY   129.90 + 0.40

JUL      1916 – 20                                              JUL    132.40 + 0.50

SEP      1931 – 22                                             SEP    134.80 + 0.55

NOV     1938 – 22                                              DEC   138.35 + 0.50

JAN      1940 – 22                                             MAR   141.75 + 0.45

MAR     1940 – 23                                             MAY   143.95 + 0.45

MAY     1943 – 21                                              JUL    146.00 + 0.45

JUL      1950 – 21                                              SEP    148.00 + 0.45

SEP      1958 – 21                                              DEC   150.35 + 0.45

NOV     1965 – 21                                              MAR   152.65 + 0.50


Coffee Market Report April 25 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease and liquidate their net short sold position within the market by 726.91% over the week of trade leading up to Tuesday 18th. April; to register a new net long position of 5,078 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 5.81%, to register a net long position of 32,178 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their long position within the market by 162.96%, to register net long position of 10,544 Lots.   This net long position which is the equivalent of 2,989,177 bags and following the sharp selloff last week, has most likely been liquidated and with this sector of the market once again within a new net short sold position and likewise, that of the Managed Money fund sector of the market.  

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net long position within this market by 4.64% during the week of trade leading up to Tuesday 18th. April; to register a net long position of 46,769 Lots.  This net long position which is the equivalent of 7,794,833 bags has most likely been significantly reduced, following the period of overall sharply softer trade that has since followed. 

It has been a good year so far for the Ugandan coffee farmers as following on from the report that the countries coffee exports for the first six months of the new October 2016 to September 2017 coffee year were 584,176 bags or 35% higher than the same period in the previous coffee year at a total of 2,253,190 bags, the value of these exports were a significant $ 112,241,330.00 or 69.48% higher than the same period, at a total of $ 273,785,834.00. 

This increased value even more significant in terms of the fact that it is related mostly towards the lower value robusta coffee exports which increased in volume over these six months by 38.46%, as against the more modest 26.23% increase in arabica coffee exports.   The ratio of these six months of Ugandan coffee exports having been 73.57 robusta coffee to 26.43 arabica coffees, in volume terms.  Albeit that the arabica coffees contributed to 32% of the value of the exports for the period.  

The coffee markets are meanwhile very much on the back foot for the present and with the fundamental of short to medium term deficit supply being countered by the evidence of significant consumer market stocks, which confirm that there is no threat of tight short term coffee supply.  Especially so with the prevailing weather reports and forecasts, indicating no threat to the prospects for improved production levels for the coming year.   This turning the speculative and fund sentiment towards the markets somewhat bearish and with follow through selling coming into play, as the markets progressed through the day yesterday.   

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 44.08 usc/Lb., while this equates to 33.42% price discount for the London robusta coffee market.  This still relatively low arbitrage remains not such an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,815 bags yesterday; to register these stocks at 1,409,693 bags.  There was meanwhile a larger in number 2,620 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,077 bags. 

The commodity markets while mixed in trade remained mostly on the downside track yesterday, with the overall macro commodity index taking a softer track for the day.   The Natural Gas, Copper, Orange Juice and Grain markets had a day of buoyancy and the Silver market was steady, while the Oil, Sugar, Cocoa, Coffee and Gold markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.59% lower, to see this Index registered at 407.17.  The day starts with the U.S. Dollar near to steady and trading at 1.279 to Sterling and at 1.086 to the Euro, while North Sea Oil is showing some early corrective buoyancy and is selling at $ 49.70 per barrel. 

The London market started the day yesterday on a softer note, but with the New York market following a brief opening dip in value, taking a positive stance.  The markets progressed into the early afternoon trade with the London market remaining south of par and the New York market on a positive track and peaking with a 1.45 usc/Lb. gain for the day, but as the afternoon progressed the New York market started to falter and slipping back to trade either side of par.   The inability of the New York market to build on its gains did little to assist the confidence within the London market that attracted further selling pressure, while the New York took a late in the day downside track into negative territory.   

The London market ended the day on another very soft note and with 62.8% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 80% of the losses of the day intact.   This close and with the New York market having lost its way in late trade does little to inspire confidence, but one might nevertheless expect to see some caution coming into play in early trade and possibly a hesitant near to steady start for the day against the prices set yesterday, as follows: 

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

MAY     1906 – 56                                              MAY   129.50 – 0.35

JUL      1936 – 54                                              JUL    131.90 – 1.00

SEP      1953 – 53                                             SEP    134.25 – 1.00

NOV     1960 – 52                                              DEC   137.85 – 1.00

JAN      1962 – 53                                             MAR   141.30 – 1.00

MAR     1963 – 49                                             MAY   143.50 – 0.95

MAY     1964 – 40                                              JUL    145.55 – 0.95

JUL      1971 – 39                                              SEP    147.55 – 0.90

SEP      1979 – 39                                              DEC   149.90 – 1.00

NOV     1986 – 39                                              MAR   152.15 – 1.05


Coffee Market Report April 24 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net long position within the market by 162.96% during the week of trade leading up to Tuesday 18th. April; to register a net long position of 10,544 Lots on the day.  This net long position which is the equivalent of 2,989,177 bags has most likely been liquidated and with this sector of the market back into a net short sold position, following the rather dramatic reversal of fortunes that the market has experienced in trade for the second half of last week. 

The Uganda Coffee Development Authority UCDA has reported that the countries coffee exports for the month of March were 162,078 bags or 65.4% higher than the same month last year, at a total of 409,916 bags.  This much-improved performance has contributed to the countries cumulative coffee exports for the first six months of the present October 2016 to September 2017 coffee year to being 585,040 bags or 35.05% higher than the same period in the previous coffee year, at a total of 2,254,094 bags.  

The UCDA has forecasted that the present surge in imports shall continue with an improved import performance for the month of April, but fear that due to the partial drought conditions that were experienced over the last quarter of last year and into early this year, that it shall impact negatively upon the relative export volumes in the coming months.   However, with such a good performance so far, one would guess that the countries coffee exports for the present coffee year shall still well exceed the 3,315,567 bags that the country exported during the previous coffee year. 

These previous coffee year exports having been a ratio of 73.45 to 26.55 of robusta and arabica coffee exports, which saw Uganda retain its dominant hold the number on position in terms of African robusta coffee exports, while coming second to the dominant Ethiopian share, in terms of African arabica coffee exports.  While with a good number of private trade, NGO and state coffee farm extension programs active in Uganda, one would foresee that with unforeseen weather problems aside that the countries coffee production and exports are on track for steady year by year increases for the coming years.   

It was a dramatic day for the London robusta coffee market on Friday and while there was a negative correction expected following the reversal in the fortunes of the New York market late in the day on Thursday, few foresaw the speculative sell off that came to the market later in the day on Friday.  This saw the London market with prices slipping below the 200-day moving average and with extensive volumes of trade, experience its largest one day slip in prices in six years. 

The July to July contracts arbitrage between the London and New York markets broadened on Friday, to register this at 42.64 usc/Lb., while this equates to 32.08% price discount for the London robusta coffee market.  This relatively narrow arbitrage remains not such an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,850 bags on Friday; to register these stocks at 1,407,878 bags.  There was meanwhile a smaller in number 380 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,697 bags. 

The commodity markets were mixed but with most markets on a back foot on Friday, with the overall macro commodity index taking a negative track for the day.   The Sugar, Cocoa, Cotton, Soybean and Gold markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Coffee, Copper, Orange Juice, Wheat, Corn and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.30% lower, to see this Index registered at 409.58.  The day starts with the U.S. Dollar near to steady and trading at 1.278 to Sterling and at 1.085 to the Euro, while North Sea Oil is showing some early buoyancy and is selling at $ 50.30 per barrel. 

The London market started the day on Friday on a predictable softer note, while the New York market started the day marginally softer.   The New York market did however very quickly move back into corrective positive territory and followed by a recovery of more than half of the earlier losses experienced by the London market and with the New York market taking a positive track into early afternoon trade, which was accompanied by a relatively modest stance being taken by the London market.    However, as the afternoon progressed the New York market faltered and slipped back into modest negative territory, while the London market once again slipped lower and started to attract speculative liquidation sell stops and started on a dramatic sharp downside track for the day.  Albeit that there was some modest partial recovery for the New York market, at the close of trade for the day.   

The London market ended the day on an extremely soft note and with 91.2% of the losses of the day intact, while the New York market ended the day on a soft note and with 50.1% of the earlier losses of the day intact.  This close that came with extremely high volumes of trade has taken the markets well south of the recent trading range and does little to inspire confidence, as it also contributes to a negative picture for the charts, but one might expect that there might nevertheless be some degree of corrective buying and perhaps a degree of buoyancy for early trade today against the prices set on Friday, as follows: 

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

MAY     1962 – 136                                            MAY   129.85 – 1.80

JUL      1990 – 134                                            JUL    132.90 – 1.40

SEP      2006 – 132                                           SEP    135.25 – 1.45

NOV     2012 – 131                                            DEC   138.85 – 1.40

JAN      2015 – 125                                           MAR   142.30 – 1.35

MAR     2012 – 124                                           MAY   144.45 – 1.35

MAY     2004 – 134                                            JUL    146.50 – 1.30

JUL      2010 – 134                                            SEP    148.45 – 1.25

SEP      2018 – 134                                            DEC   150.90 – 1.10

NOV     2025 – 134                                            MAR   153.20 – 1.00


Coffee Market Report April 21 2017

The weather reports from Brazil for the month of April so far confirm some scattered rain fall has been experienced over most coffee districts, but with the rainfall for the month for most of the arabica coffee districts proving to be below average for the month.   April is however not a high rainfall month and it is not a matter of short term concern, but it does indicate that with prevailing warm days that there is likely to some draw down in ground water retention levels, which one would think shall contribute to some additional stress during the forthcoming cold and dry harvest season. 

The Coffee Division of the Chinese trading conglomerate COFCO post an intensive tour through the main Brazil coffee districts have reported that they foresee that Brazil’s new coffee crop shall be approximately 15% to 20% lower than the last crop, but more likely only 15% lower.   Thus, indicating in terms of general trade and industry assessment of the last 2016 crop one would think, of a new crop of approximately 48 million bags.  Albeit that within this interview COFCO were talking on the basis of a more politically correct and conservative Brazil crop last year of only 51.37 million bags. 

Within the interview however COFCO forecast that with unforeseeable weather problems aside, that this smaller 2017 crop is likely to be followed by a much larger new Brazil crop for the coming year.   With this forecast being very much in line with most private trade and industry forecasts, which have foreseen both a small new crop for Brazil this year and to be followed by a larger new crop for 2018.   

In the meantime, it was a dramatic day for the coffee markets as prevailing fundamentals of generally accepted deficit global coffee supply through to the coming year were ignored and the speculative and fund sectors of the New York market, followed the charts and heavily sold the New York market and with the London market following suit.   Undoubtedly something of a shock for most producer market exporters and traders and it is likely for the short term, to result in price resistant internal market selling activity within most producer countries and to further slow the already mostly lacklustre volumes of new origin selling business for the coming days.  

This attrition within the coffee markets yesterday was perhaps seen to be even more dramatic for the Cocoa markets, with the New York Cocoa prices falling to ten year lows.    The Cocoa market suffering from both the perspective of surplus supply, which has assisted to encourage technical and chart based selling activity.   

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.96 usc/Lb., while this equates to 28.26% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,990 bags yesterday; to register these stocks at 1,405,028 bags.  There was meanwhile a smaller in number 25 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,317 bags. 

The commodity markets were mostly steady to softer in trade yesterday against a relatively steady U.S. dollar, but with many markets once again tending negative and the overall macro commodity index taking a negative track for the day.   The Cotton and Copper markets had a day of buoyancy and the Oil and Gold markets were steady for the day, while the Cocoa, Coffee and Orange Juice markets fell out of bed and the Natural Gas, Sugar, Wheat, Corn, Soybean and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.92% lower, to see this Index registered at 410.80.  The day starts with the U.S. Dollar tending softer and trading at 1.281 to Sterling and at 1.071 to the Euro, while North Sea Oil is steady and is selling at $ 50.80 per barrel. 

The London market started the day on a softer note yesterday, while the New York market started the day with early buoyancy.    The London market did however soon recover and returned to par and with the markets taking a sideways track with London on Par and New York positive into the early afternoon trade.   However, as the afternoon progressed and once the Americans entered the field of play, the New York market that had experienced a gain of 1.95 usc/Lb. for the day faltered and fell back into modest negative territory and followed by the London market.   These losses started to increase and in late in the day trade both markets started to hit technical sell stops and with volumes increasing, to take the markets rather dramatically south. 

The London market ended the day on a very soft note and with 82% of the losses of the day intact, while the New York market ended the day on an extremely soft note and 8.30 usc/Lb. below the earlier highs of the day and with 93.4% of the losses of the day intact.   This unexpected collapse within the New York market does little to inspire confidence and further contributes to a negative technical picture for the markets, but the question is following the volumes of trade yesterday how much more in the way of speculative and fund selling volumes might there be available.   Thinking that there is a chance for opportunist consumer industry price fixation buying activity to come into play and the possibility of corrective buoyancy for early trade today, against the very soft prices set yesterday, as follows: 

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

MAY     2098 – 48                                              MAY   131.65 – 6.35

JUL      2124 – 50                                              JUL    134.30 – 6.35

SEP      2138 – 45                                             SEP    136.70 – 6.30

NOV     2143 – 41                                              DEC   140.25 – 6.20

JAN      2140 – 41                                             MAR   143.65 – 6.20

MAR     2136 – 43                                             MAY   145.80 – 6.15

MAY     2138 – 43                                              JUL    147.80 – 6.00

JUL      2144 – 45                                              SEP    149.70 – 5.85

SEP      2152 – 45                                              DEC   152.00 – 5.85

NOV     2159 – 45                                              MAR   154.20 – 5.85


Coffee Market Report April 20 2017

The National Coffee Council of El Salvador have reported that the countries coffee exports for the month of March were 15,006 bags or 28.96% higher than the same month last year, at a total of 66,819 bags.  This improved performance has contributed to the countries cumulative exports for the first six months of the present October 2016 to September 2017 coffee year to being 5,410 bags or 3.3% higher than the same period in the previous coffee year, at a total of 169,336 bags. 

Today is the start of the annual four-day Speciality Coffee Association of America conference and exhibition, which attracts global support and this year is being held within Seattle.   But with the news of the somewhat dramatic reversal in the fortunes of the New York arabica coffee market yesterday, likely to take some of the lustre out of the event, for many of the producer exporters attending the conference.  

The Brazil Real lost a bit of value against the U.S. dollar, which assisted with the prospects for some increased Brazilian to cap exuberance within the New York market, once the Americas came upon the field of play yesterday.  But with Brazilian farmers already relatively well sold in terms of their past crop arabica coffee stocks, one might not expect that even a marginally weaker Brazilian Real would have much impact upon the fortunes of the market.  Albeit that the speculative sector within the New York market tends to react to the threat of increased selling out of Brazil, whenever the Real losses some weight. 

The Brazil market is however due for another public holiday tomorrow, as the country celebrates their Tiradentes Day holiday, to commemorate the independence from Portuguese rule and taxation hero Joaquim José da Silva (nicknamed the Tooth Puller), who led the protests in February 1789 and his subsequent execution on the 21st. April 1792.   But one would not think that the prospects of an early closing today and a holiday tomorrow and along with lower reference prices within the terminal markets, shall actually bring much in the way of internal market arabica coffee selling into play within Brazil. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.04 usc/Lb., while this equates to 29.89% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,164 bags yesterday; to register these stocks at 1,408,018 bags.  There was meanwhile a smaller in number 165 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,292 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 10,833 bags or 0.38% over the week of trade leading up to Monday 17th. April, to see these stocks registered at 2,808,833 bags, on the day. 

The commodity markets were mixed in trade yesterday against a steady U.S. dollar, but with many markets tending negative and the overall macro commodity index taking a negative track for the day.   The Natural Gas, Orange Juice, Corn and Soybean markets had a day of buoyancy, while the Oil, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.84% lower, to see this Index registered at 414.62.  The day starts with the U.S. Dollar tending softer and trading at 1.280 to Sterling and at 1.072 to the Euro, while North Sea Oil is near to steady and is selling at $ 50.95 per barrel. 

The London and New York markets opened the day yesterday on a steady note and trading close to par, but with the New York market soon attracting support and showing modest buoyancy, while the London market struggled to maintain par.   The markets retained this stance into the early afternoon trade and with the London market taking a modestly softer sideways track, while the New York was trading just above par.   However, as the afternoon progressed the New York market and with perhaps the combined influences of the weaker Brazil Real and the negative nature of the overall macro commodity index started to come under pressure and drifted back into negative territory, while the London market started to extend its losses.   Late in the day though it all fell apart for the New York market and with the market falling back sufficiently to trigger sell stops and the market falling below the 50-day moving average, the bears within the market took the New York market sharply lower. 

The London market ended the day on a soft note and with 69.6% of the losses of the day intact, while the New York market ended the day on a very soft note and with 89.9% of the earlier losses of the day intact.   This somewhat unexpected collapse within the New York market does little to inspire confidence and contributes to a negative technical picture for the market and one might think that there shall be a follow through soft start for the London market and perhaps some corrective buoyancy for the New York market for early trade today, against the prices set yesterday, as follows: 

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

MAY     2146 – 17                                              MAY   138.00 – 4.90

JUL      2174 – 16                                              JUL    140.65 – 4.90

SEP      2183 – 16                                             SEP    143.00 – 4.85

NOV     2184 – 14                                              DEC   146.45 – 4.85

JAN      2181 – 13                                             MAR   149.85 – 4.85

MAR     2179 – 13                                             MAY   151.95 – 4.90

MAY     2181 – 13                                              JUL    153.80 – 4.80

JUL      2189 – 13                                              SEP    155.55 – 4.70

SEP      2197 – 13                                              DEC   157.85 – 4.60

NOV     2204 – 13                                              MAR   160.05 – 4.50


Coffee Market Report April 19 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease their net short sold position within the market by 56.12% over the week of trade leading up to Tuesday 11th. April; to register a net short position of 810 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.45%, to register a net long position of 30,412 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their long position within the market by 48.32%, to register net long position of 4,009 Lots.   This net long position which is the equivalent of 1,136,534 bags bags has most likely been increased again, following a period of mixed but overall steady trade that has since followed and likewise, the modest net short sold position of the Managed Money fund sector of the market might well have moved back into a modest net long position. 

In the northern conilon robusta coffee district of Rondônia in Brazil the new crop harvest is well on the way, but with rain interruptions coming to the fore, to slow the day by day progress of this harvest.  While in the main south east conilon robusta coffee district in northern Espirito Santo the new crop harvest is now starting and with some comments now coming to the fore, which indicate that this new crop shall be improved over the dismal past crop, in terms of both quality and volume.   

This is positive news for Brazil’s domestic coffee roasters and particularly for the value added soluble coffee exporters, who are experiencing some degree of price relief for their purchases of new crop conilon robusta coffees.   But while there is now expected to be an improved new conilon robusta coffee crop this year, it is not foreseen to be a full recovery post last year’s dismal crop, but only a crop that shall limit the deficit supply relative to domestic market demand and few would foresee any significant volumes of conilon robusta coffee exports from Brazil until the advent of the next 2018 crop, which shall impact late in the second quarter of next year. 

The Indonesian Coffee Exporters Association are forecasting an approximately 10% improved coffee harvest for this year, which they foresee to be between 10.8 million to 11.6 million bags, which would assist and with robusta coffees dominating the countries overall coffee production, to buoy the countries robusta coffee exports for his year.   However, they note that the countries domestic coffee consumption continues to surge which they say has increased by 19.2% in volume over the past four years, which they further foresee shall limit the impact of improved production in terms of coffee exports for the year. 

Thus, and despite some improvement from Indonesia for this year’s coffee supply, one would foresee that following the 2016-year end small new Vietnam crop and on top of reduced volumes of carryover stocks, that the prevailing relatively tight supply of robusta shall continue through to at least November this year.   The big question shall be what are the prospects for the next Vietnam robusta coffee crop that shall start to impact at the end of the year, which so far is mostly being forecasted to be a larger new crop and one that shall broaden the presently relatively thin arbitrage between the London and New York markets.  

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 46.21 usc/Lb., while this equates to 31.75% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,151 bags yesterday; to register these stocks at 1,411,182 bags.  There was meanwhile a smaller in number 5,874 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,457 bags. 

The commodity markets were mixed in post-holiday trade yesterday and despite some support from the weaker U.S. dollar, the trend was somewhat soft and with the overall macro commodity index taking a softer track for the day.   The Sugar, Coffee, Orange Juice and Gold markets had a day of buoyancy and the Cotton market was steady, while the Oil, Natural Gas, Cocoa, Copper, Wheat, Corn, Soybean and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.12% lower, to see this Index registered at 418.12.  The day starts with the U.S. Dollar tending softer and trading at 1.283 to Sterling and at 1.072 to the Euro, while North Sea Oil is near to steady and is selling at $ 52.35 per barrel. 

The London market following the recovery in New York on Monday and while London was still on holiday, predictably started the day yesterday on a positive note, while the New York market suffered from a modest negative correction.  This saw both markets move into early afternoon trade on a mixed track and with London remaining north of par, while New York remained south of par.  As the afternoon progressed the New York market and perhaps with some degree of support for sentiment coming from the latest commitment of traders report that indicated little in the way of a speculative net long position started to recover, to move back to join the London market in positive territory.   The London market continued on its modestly positive sideways track for the rest of the day, but with the New York market building upon its recovery and somewhat overtaking the hesitantly positive stance being taken within the London market, towards a relatively strong close.   The London market ended the day on a positive note and with 80.9% of the earlier gains of the day intact, while the New York market ended the day on a likewise and perhaps even more positive note and with 85.4% of the earlier gains of the day intact.   This close assists to paint a more positive technical picture for the more volatile New York market and might assist to buoy confidence and one might expect to see a close to steady start for the markets for early trade today against the prices set yesterday, as follows: 

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

MAY     2163 + 18                                             MAY   142.90 + 1.80

JUL      2190 + 17                                              JUL    145.55 + 2.05

SEP      2199 + 19                                             SEP    147.85 + 2.10

NOV     2198 + 17                                              DEC   151.30 + 2.10

JAN      2194 + 17                                             MAR   154.70 + 2.10

MAR     2192 + 17                                             MAY   156.85 + 2.15

MAY     2194 + 17                                              JUL    158.60 + 2.05

JUL      2202 + 17                                              SEP    160.25 + 2.05

SEP      2210 + 17                                              DEC   162.45 + 2.10

NOV     2217 + 17                                              MAR   164.55 + 2.10


Coffee Market Report April 18 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net long position within the market by 48.35% during the week of trade leading up to Tuesday 11th. April; to register a net long position of 4,009 Lots on the day.  This net long position which is the equivalent of 1,136,534 bags has most likely been little changed to perhaps marginally increased again, following the period of mixed but overall more slightly more positive trade, which has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market increase their net long position within this market by 3.85% during the week of trade leading up to Tuesday 11th. April; to register a net long position of 49,043 Lots.  This net long position which is the equivalent of 8,173,833 bags has most likely been little changed to perhaps marginally reduced again, following the period of mixed but overall softer trade that has since followed. 

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 279,083 bags or 4.33% during the month of March, to register these stocks at 6,724,857 bags at the end of the month.   This is the record highest figure for the these stocks, since this data started being recorded and assessed in January 2002.   

These stocks do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of 560,000 bags per week, would conservatively have been at least 1.1 million bags. If one is to consider the additional unreported stocks the end month stocks would equate to approximately 7.82 million bags, it would have equated to something in the order of 14 weeks of roasting activity.  This number may be considered a very safe reserve, in combination with the steady flow of new crop arabica coffees from Colombia, Central America, and Vietnam that are presently coming to the market and soon to be followed, but the new Indonesian and Brazil crop coffees.   

It is so far, the evidence of these North American stocks that accompany similar reports of relatively high levels of stock being held within Europe and Japan, that continues to side-line the many forecasts of deficit global coffee supply for the coming year.   Albeit that this perspective for tightening producer bloc coffee supply is related to the assumption of perfect weather conditions, which is often an unlikely scenario and does leave the markets open to a potentially sharp speculative reaction to any unforeseen weather issues developing for any of the main producer blocs over the coming months. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 44.93 usc/Lb., while this equates to 31.31% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,570 bags yesterday; to register these stocks at 1,404,031 bags.  There was meanwhile a larger in number 8,206 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,331 bags. 

The commodity markets were in receipt of positive economic figures out of China yesterday, which can be expected to be supportive for buoyancy within selected markets, but with the European markets closed for the extended Easter long weekend yesterday, there was no real overall macro commodity index to adjudge direction for the day.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.05% lower, to see this Index registered at 418.61.  The day starts with the U.S. Dollar near to steady and trading at 1.257 to Sterling and at 1.065 to the Euro, while North Sea Oil is near to steady and is selling at $ 54.55 per barrel. 

The London market remained on holiday yesterday for the Easter Monday celebrations, while the New York market started the day with a late start and for a shortened day’s trade.   The New York market did however seemingly gain some heart from the hesitantly positive close to the shortened week on Thursday last week and lacking much in the way of producer selling activity over the market, took a positive track for the day and stepped up a little in terms of the prevailing range bound sideways trade that has been experienced over the past few weeks.   The New York market and despite the shortened day and with many players on holiday and off the field of play, had a surprisingly active day and with the market ending the day on a positive note and with 83.3% of the earlier gains of the day intact.   This close might be seen to be positive for confidence and is likely to set the markets for a catch up positive start for the post-holiday London market and  near to steady start for the New York market for early trade today against the prices set in London on Thursday last week and in New York yesterday, as follows: 

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

MAY     2145 – 12                                             MAY   141.10 + 2.20

JUL      2173 – 10                                              JUL    143.50 + 2.25

SEP      2180 – 10                                             SEP    145.75 + 2.20

NOV     2181 – 9                                                DEC   149.20 + 2.20

JAN      2177 – 9                                               MAR   152.60 + 2.25

MAR     2175 – 13                                             MAY   154.70 + 2.20

MAY     2177 – 15                                              JUL    156.55 + 2.25

JUL      2185 – 15                                              SEP    158.20 + 2.25

SEP      2193 – 15                                              DEC   160.35 + 2.20

NOV     2200 – 15                                              MAR   162.45 + 2.15


Coffee Market Report April 14 2017

It is seemingly going to be a dry Easter weekend for the main coffee growing districts in Brazil, but with a cold front due to enter the southern arabica coffee districts for the second half of next week and to bring with it, light rains.   But it would seem that the dry and cold winter harvest season for Brazil’s main coffee districts is starting, with focus now on the cold fronts and the usual frost threat reports that start from late next month. 

There is evidence of a steady stream of new crop robusta coffees starting to come to the fore in Indonesia and somewhat just in time, with the internal market farm stock of robusta coffees being mostly sold.   Allowing for the consumer market roasters to start to look to Indonesia, for additional robusta coffee supplies and to supplement the potential medium term dip in robusta coffee import volumes out of Vietnam. 

The U.S. Government Climate Protection Centre have forecasted that there is no longer much chance for a new El Niño weather phenomenon to develop within the Pacific Ocean during the first half of this year, but there remains a chance that this might be forthcoming during the second half of this year.   Thus, with the prevailing neutral weather conditions, there are no weather-related issues to influence short term market sentiment. 

However, should the El Niño come about with any intensity it could be damaging to the Pacific Rim coffee producing countries and have some impact upon the prospects for the Colombian, Peru and Indonesian crops in the coming year.     Thus the possibility of this phenomenon, shall continue to be closely watched.  

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 42.68 usc/Lb., while this equates to 30.22% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,824 bags yesterday; to register these stocks at 1,399,461 bags.  There was meanwhile a smaller in number 1,963 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,537 bags. 

The commodity markets were mixed yesterday and with the U.S. dollar tending to stabilise, to see the overall macro commodity index taking a somewhat sideways track for the day.   The Natural Gas, New York arabica Coffee, Copper, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Orange Juice and Wheat markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.23% higher, to see this Index registered at 418.83.  The day U.S. Dollar is steady and trading at 1.250 to Sterling and at 1.061 to the Euro, while North Sea Oil is near to steady and is selling at $ 54.10 per barrel. 

The London market started the day yesterday on a steady note and with the New York market starting the day with immediate buoyancy and followed by a recovery for the London market, to see both markets taking a modestly positive track into the early afternoon trade.  As the afternoon progressed the New York market started to add some more value and the London market continuing with modest buoyancy, but with both markets finally hitting some resistance and to see the London market slipping back into negative territory and the New York market shedding most of the day’s gains.  The London market ended the day on a soft note but having recovered 67.7% of the earlier losses of the day, while the New York market ended the day on modestly positive note and with 36.1% of the earlier gains of the day intact.   This close does little to inspire but does assist to paint something of a positive picture for the more volatile New York market, which might assist to inspire a steady start for trade on Monday, when the New York market shall trade solo for a shortened day and ahead of the return to the field of play for the London market on Tuesday, against the prices set yesterday, as follows.  

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

MAY     2145 – 12                                             MAY   138.90 + 0.60

JUL      2173 – 10                                              JUL    141.25 + 0.65

SEP      2180 – 10                                             SEP    143.55 + 0.70

NOV     2181 – 9                                                DEC   147.00 + 0.70

JAN      2177 – 9                                               MAR   150.35 + 0.65

MAR     2175 – 13                                             MAY   152.50 + 0.70

MAY     2177 – 15                                              JUL    154.30 + 0.70

JUL      2185 – 15                                              SEP    155.95 + 0.70

SEP      2193 – 15                                              DEC   158.15 + 0.75

NOV     2200 – 15                                              MAR   160.30 + 0.80


Coffee Market Report April 13 2017

The new conilon robusta coffee crop harvest has started in the northern Rondônia coffee producing province in Brazil, but with some rain interruptions to the progress of this harvest.  This shall soon be followed by the new conilon robusta coffee harvest from the leading conilon producing state of Espirito Santo and thus for the medium term, the tight internal market supply of robusta coffees to the countries domestic roasters is no longer a problem.  Albeit that one might expect there to be some degree of price resistance on the part of the farmers, who have grown used to the premium prices that they have been receiving over the past few months of tight supply. 

Weather forecasts from south and central Vietnam are indicating hot weather and accompanied by severe thunder showers for this month and thus it would seem, that the new summer rain season is very much on track and shall be beneficial for the prospects of the next crop that shall be harvested from October to December this year.   Most early forecasts tending to indicate that following the small new crop that came in at the end of last year, that this new crop shall potentially be another large crop of at least 28 million bags. 

The physical coffee markets with most producer countries closed for business tomorrow for the Easter Friday and some already on holiday and with the main stream consumer market countries shall likewise be closed tomorrow, can be expected to be somewhat lacklustre in nature.   While with many of the European markets also closed for business for Easter Monday and only due back at work on Tuesday next week, one cannot expect much in the way of trading activity until later on in the coming week. 

In terms of the coffee terminal markets both the New York and London markets shall be closed tomorrow and with the London market also close on Monday, while the New York market shall be open with a late start and for a shortened day on Monday.    

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.58 usc/Lb., while this equates to 29.57% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 8,565 bags yesterday; to register these stocks at 1,395,637 bags.  There was meanwhile a larger in number 11,325 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,500 bags. 

The commodity markets were mixed yesterday and with the U.S. dollar tending softer, but this did not assist to stop the overall macro commodity index from taking a softer track for the day.   The Natural Gas, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, Sugar, Cocoa, Coffee, Cotton, Copper and Orange Juice markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% lower, to see this Index registered at 417.85.  The day starts with the U.S. Dollar tending softer and trading at 1.255 to Sterling and at 1.066 to the Euro, while North Sea Oil is showing some early buoyancy and is selling at $ 54.60 per barrel. 

The London market started the day yesterday on a steady note and with the New York market starting the day with immediate buoyancy and with the both markets maintaining this track into the early afternoon trade.  As the afternoon progressed the New York market started to attract more support and with buy stops being triggered to see the market post gains that the peaked at 1.75 usc/Lb. for the day, while the London market started to follow suit and to move up into modest positive territory.  However, in late in the day trade the New York market and with the added influence of the negative nature of the overall macro commodity index faltered and suffered a rather sharp reversal and attracting sell stops to accentuate the losses, suffered something of a collapse and dipped relatively sharply back into negative territory and followed by a steady backwards slide for the London market.   The London market ended the day on a soft note and with 80% of the losses of the day intact, while the New York market ended the day on a likewise soft note and with 78.3% of the losses of the day intact.   This close does little to inspire but one might expect that with a softer dollar in play that the markets might attract some corrective support and the possibility for a steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY     2157 – 19                                             MAY   138.30 – 1.90

JUL      2183 – 16                                              JUL    140.60 – 1.80

SEP      2190 – 13                                             SEP    142.85 – 1.85

NOV     2190 – 14                                              DEC   146.30 – 1.85

JAN      2186 – 13                                             MAR   149.70 – 1.75

MAR     2188 – 13                                             MAY   151.80 – 1.80

MAY     2192 – 13                                              JUL    153.60 – 1.80

JUL      2200 – 13                                              SEP    155.25 – 1.75

SEP      2208 – 13                                              DEC   157.40 – 1.75

NOV     2215 – 13                                              MAR   159.50 – 1.75


Coffee Market Report April 12 2017

The Brazilian Exporters Association Cecafé have commented on the fact that March was the second consecutive month of relatively low coffee exports, with green coffee exports having been 14.8% lower than the same month last year which is only partially due to the lack of conilon robusta coffee exports, as it was mostly due to a 13.33% dip in arabica coffee exports.   As by this time last year and with the new conilon robusta coffee crop that was starting to be harvested and clearly due to be a dismal low and deficit crop, the internal market demand had already priced the available conilon coffee stocks out of the price competitive export market.   

The tight supply of conilon robusta coffees had however in terms of the Brazil coffee year that runs from July to June has had its affect upon the countries coffee exports for the present coffee year and despite some aggressive arabica coffee export sales for the second half of last year, as the country’s coffee exports for the first nine months of the July 2016 to June 2017 Brazil coffee year are seen to be 2.31 million bags or 9.1% lower than the same period in the previous coffee year, at a total of 23.05 million bags.   The Cecafé comment being that this is despite the free flow supply of arabica coffees, which came with the bumper arabica coffee crop last year.  

Perhaps the significant factors for the steady rather than aggressive Brazil arabica coffee sales, are that in the meantime the Brazil Real had been firming over the past nine months that made international prices less attractive for coffee sales.   This along with the perspective that this year’s new arabica coffee harvest is due to be lower, which might inspire many farmers to hold back stocks to supplement their forthcoming lower new crop inventories. 

The big question is what shall be the size of this new crop in Brazil, with forecasts that range between a 10% and 15% dip in overall coffee production this year, which is mainly attributed to the biennial bearing effect upon the arabica coffee farms.    But with many private trade and industry forecasts looking to a new crop that shall be little more than a 10% lower crop of close to 50 million bags, while the traditionally conservative official forecasts talk of numbers that are closer to 47 million bags and perhaps even lower.  

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.66 usc/Lb., while this equates to 29.96% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,807 bags yesterday; to register these stocks at 1,387,072 bags.  There was meanwhile a larger in number 11,740 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 51,825 bags. 

The commodity markets were mixed yesterday and with the U.S. dollar tending softer, to assist the overall macro commodity index to take a steady and modestly buoyant sideways track for the day.  The Oil, Sugar, Cocoa, Coffee, Copper, Wheat, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Cotton, Orange Juice, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.36% higher, to see this Index registered at 418.91.  The day starts with the U.S. Dollar steady and trading at 1.248 to Sterling and at 1.060 to the Euro, while North Sea Oil is steady and is selling at $ 55.45 per barrel. 

The London market started the day on a modestly softer note yesterday, while the New York market started the day with a degree of buoyancy and soon followed by the London market recovering to trade around par and with both markets trading around par into the early afternoon trade.  As the afternoon progressed the New York market started to add value and to look to have the potential of some renewed muscle but to falter and to fall back to join the London market in its sideways track close to either side of par.   But while the London market finally broke out of the doldrums of it sideways track for the day and experienced something of mini rally for late in the day trade, the New York market maintained its lacklustre sideways track through to the close.  The London market ended the day on a positive note and with 86.4% of the earlier gains of the day intact, the New York market ended the day on a more modest positive note and with only 33.3% of the earlier gains of the day intact.   It was nevertheless a positive close for the day and one might think a close that shall inspire some degree of confidence in the sideways rather than negative nature of the markets and therefore, the prospects for a steady start for early trade today against the prices set yesterday, as follows: 

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

MAY     2176 + 22                                             MAY   140.20 + 0.35

JUL      2199 + 19                                              JUL    142.40 + 0.25

SEP      2203 + 18                                             SEP    144.70 + 0.20

NOV     2204 + 19                                              DEC   148.15 + 0.25

JAN      2199 + 18                                             MAR   151.45 + 0.25

MAR     2201 + 18                                             MAY   153.60 + 0.20

MAY     2205 + 18                                              JUL    155.40 + 0.15

JUL      2213 + 18                                              SEP    157.00 + 0.20

SEP      2221 + 18                                              DEC   159.15 + 0.20

NOV     2228 + 18                                              MAR   161.25 + 0.20


Coffee Market Report April 11 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 15.95% over the week of trade leading up to Tuesday 4th. April; to register a net short position of 1,846 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 4.33%, to register a net long position of 29,686 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 22.51%, to register net long position of 2,703 Lots.   This net long position which is the equivalent of 766,289 bags has most likely been marginally increased again, following a period of mixed but overall positive trade that has since followed and likewise, the new net short sold position of the Managed Money fund sector of the market might well have been liquidated. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market increase their net long position within this market by 23.21% during the week of trade leading up to Tuesday 4th. April; to register a net long position of 47,226 Lots.  This net long position which is the equivalent of 7,871,000 bags has most likely been little changed, following the period of mixed but overall steady trade that has since followed. 

The Vietnam Customs authorities who had estimated on the 29th. March that the countries coffee exports of mostly robusta coffees for the month of March would be 3 million bags, have now announced that these exports were in fact approximately 2.8 million bags, which is still higher than what most of the private trade had forecasted for the month.   These exports for the month of March would contribute to the countries coffee exports for the first three months of this year, to have been close to 7.6 million bags. 

These export volumes from Vietnam are however with internal market farm stocks foreseen to be relatively modest, expected to start tailing off in the coming months.   But with the advent of the new Indonesian robusta coffee crop that is due to start coming to the market in volume for May onwards, there is presently no concern over medium terms robusta coffee supply. 

The well-respected commodity bank Rabobank, who on the basis of the forecasted dip in the new Brazil arabica coffee crop for this year, have revised their global coffee supply forecast for the coming October 2017 to September 2018 coffee year to 153 million bags.  As against this they have forecasted rising global coffee consumption to be as high as 158.4 million bags, which would indicate a global coffee supply deficit for the coming coffee year of 5.3 million bags.    This report being somewhat supportive for market sentiment. 

One might comment that most trade and industry reports agree that there shall be a deficit coffee supply for the forthcoming October 2017 to September 2018 coffee year and a factor that most probably shall assist to buoy terminal market prices for the second half of the year, which might encourage the producers who are overall low in stocks to increase their price resistance and to look to build up some stocks.   A factor that would assist to support the presently relatively soft New York market, while maintaining the relatively strong stance that is being taken by the London market for the present. 

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 43.27 usc/Lb., while this equates to 30.44% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,783 bags yesterday; to register these stocks at 1,380,265 bags.  There was meanwhile a smaller in number 4,759 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 63,565 bags. 

The commodity markets worked with a strong dollar again yesterday to dampen upside spirits within many markets, to see the overall macro commodity index taking a hesitant sideways track for the day.   The Oil, Cotton, Orange Juice, Wheat and Corn markets had a day of buoyancy and the New York arabica Coffee market was close to steady for the day, while the Natural Gas, Sugar, Cocoa, London robusta Coffee, Copper, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% lower, to see this Index registered at 417.42.  The day starts with the U.S. Dollar steady and trading at 1.241 to Sterling and at 1.058 to the Euro, while North Sea Oil is steady and is selling at $ 54.75 per barrel. 

The London and New York markets started the day yesterday on a softer note and with both markets taking a softer track into the early afternoon trade, when the New York market started to attract support and to move back into positive territory.   As the afternoon progressed the London market recovered and moved back to par but to dip back into negative territory for late trade, while the New York market shed its gains and moved back into modest negative territory.   The London market ended the day on a soft note and with 70% of the earlier losses of the day intact, while the New York market ended the day on a marginally softer note and with 25% of the earlier losses of the day intact.  This close is somewhat indecisive in nature and one might see it as more a down day for the presently sideways in nature markets and one might not expect to see any follow through negative pressure, but rather to see a hesitantly steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY     2154 – 16                                             MAY   139.85 – 0.20

JUL      2180 – 14                                              JUL    142.15 – 0.25

SEP      2185 – 14                                             SEP    144.50 – 0.25

NOV     2185 – 15                                              DEC   147.90 – 0.25

JAN      2181 – 14                                             MAR   151.20 – 0.15

MAR     2183 – 14                                             MAY   153.40 – 0.15

MAY     2187 – 14                                              JUL    155.25 unch

JUL      2195 – 14                                              SEP    156.80 + 0.05

SEP      2203 – 14                                              DEC   158.95 + 0.10

NOV     2210 – 14                                              MAR   161.05 + 0.10


Coffee Market Report April 10 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net long position within the market by 22.51% during the week of trade leading up to Tuesday 4th. April; to register a net long position of 2,703 Lots on the day.  This net long position which is the equivalent of 766,289 bags has most likely been marginally increased again, following the period of mixed but overall more positive trade, which has since followed. 

The National Coffee Institute in Costa Rica have reported that the countries coffee exports for the month of March were 7,034 bags or 4.01% lower than the same month last year, at a total of 168,413 bags.   This has contributed to the countries cumulative coffee exports for the first six months of the present October 2016 to September 2017 coffee year to be 48,082 bags or 9.83% lower than the same period in the previous coffee year, at a total of 440,683 bags. 

This dip in coffee exports from Costa Rica in light of the reports that due to unseasonal excessive rain interruptions at the start of the last harvest that had damaged the potential of the new crop, was to have been expected.   While with this small dip in production from what is now one of the small producers within the Central American producer bloc being overshadowed by the surge in production from Honduras, it is not a factor of concern for the market and shall have little impact upon market sentiment. 

The latest March 2017 coffee report from the International Coffee Organisation highlights that the prevailing good supply of arabica coffees that is presently in play and over and above the high levels of mainstream consumer market coffee stocks, is the reason for the prevailing soft nature of the volatile New York market.   But the report does estimate that global coffee consumption presently marginally exceeds global coffee production and is a view that is largely accepted, by most private trade and industry reports. 

Thus, one might comment that with the uncertainties of weather to the fore, that any issues that might develop for any of the main coffee producer blocs, would very quickly change the present complacency within the presently sideways trading coffee markets.   Suggesting that caution might dictate that the downside for the markets is presently limited, while the medium-term upside potential for the markets might be the more realistic view to take.   

The July to July contracts arbitrage between the London and New York markets broadened on Friday, to register this at 42.88 usc/Lb., while this equates to 30.11% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,265 bags on Friday; to register these stocks at 1,374,482 bags.  There was meanwhile a similar in number 2,153 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 68,324 bags. 

The commodity markets were in receipt of improved employment figures from the U.S.A. on Friday and a firming of the dollar which had its impact within many markets, but the overall macro commodity index did nevertheless manage to take a steady track for the day.  The Oil, Sugar, Coffee, Orange Juice and Gold markets had a day of buoyancy, while the Natural Gas, Cocoa, Cotton, Copper, Wheat, Corn, Soybean and Silver markets had a softer day’s trade.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher, to see this Index registered at 418.05.  The day starts with the U.S. Dollar steady and trading at 1.239 to Sterling and at 1.058 to the Euro, while North Sea Oil is steady and is selling at $ 54.60 per barrel. 

The London market started the day on Friday on a steady note and the New York market following an initial pip up on a modestly softer note, with the London market hovering around par and the New Yorke market tending to remain south of par for the early afternoon trade.   As the day progressed however the London market started to add some value and with the New York market following suit, to see both markets taking a positive stance for late in the day’s trade.   The London market ended the day on a positive note and with 86.2% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 92% of the earlier gains of the day intact.    This close assists to improve the technical picture of the markets and might perhaps assist to buoy confidence, but with a firmer U.S. dollar in play and along with a weaker Brazil Real that is trading at close to 3.15 to the dollar, one might not expect much more than a cautious steady start for early trade today against the prices set on Friday, as follows: 

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

MAY     2170 + 27                                              MAY   140.05 + 2.30

JUL      2194 + 25                                              JUL    142.40 + 2.30

SEP      2199 + 23                                             SEP    144.75 + 2.30

NOV     2200 + 22                                              DEC   148.15 + 2.30

JAN      2195 + 20                                             MAR   151.35 + 2.30

MAR     2197 + 20                                             MAY   153.55 + 2.35

MAY     2201 + 20                                              JUL    155.25 + 2.20

JUL      2209 + 22                                              SEP    156.75 + 2.15

SEP      2217 + 22                                              DEC   158.85 + 2.15

NOV     2224 + 22                                              MAR   160.95 + 2.15


Coffee Market Report April 07 2017

The National Coffee Institute in Costa Rica and indicating a rain damaged new crop to have been below 1.4 million bags, is indicating that as much as 75% of this new crop has already been sold.  This is however not really striking news for the markets, as Costa Rica is these days a relatively small player in terms of regional Central American production and a small dip in Costa Rica supply is overshadowed by the surge in coffee supply from Honduras.  

It has been a dry month so far for the main coffee districts in Brazil, but with a cold front now coming in from the south of the country, to bring much needed rains for the coming weekend.    However, while it has been hotter and mostly dry over the past few weeks, there are reasonable levels of ground water retention and for the present the Brazil weather news is not a striking item in terms of market sentiment.  

Rather focus within Brazil is the new conilon robusta coffee crop that is starting to be harvested and with the local industries who have been paying up in recent months for the tight in supply robusta coffees, holding back for more affordable value from the new crop coffees.   

The Brail Crop Supply Agency sold all 3,733 bags which was the last of the Brazil governments aged retention stocks on Wednesday, to tee these stocks at zero for the first time for over a decade.    This modest quantity of coffee that sold for the equivalent of 117 usc/Lb., was directed towards the countries price sensitive domestic roasting industry. 

Yesterday saw commercial activity in Vietnam off the field of play and it shall be the case again today, as the country commemorate and celebrates the Hung Kings, who are considered to have been the founders of Vietnam and ruled for eighteen generations.    Thus, with the major producer player within the London market off the field so to speak, there was only limited activity and direction for the day and is likely unless the funds find some reason to play, to be the case again today.   

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 41.72 usc/Lb., while this equates to 29.78% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

Meanwhile there is really noting in the way of striking news related to the coffee markets and with ample supply of short term arabica coffee supply while the tighter supply of robusta coffees has already been factored into the value of the London market, the markets continue to move sideways within a relatively narrow trading range.  With little indication that this is going to change, until at least post the interruptions of the pending Easter holidays.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,648 bags yesterday; to register these stocks at 1,372,217 bags.  There was meanwhile a larger in number 12,022 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 66,171 bags. 

The commodity markets were mixed in trade yesterday, but with buoyancy for many markets and the overall macro commodity index took a positive track for the day.   The Oil, Natural Gas, Sugar, New York arabica Coffee, Orange Juice, Gold and Silver markets had a day of buoyancy and the Cocoa, London robusta Coffee, Cotton, Copper, Wheat, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.23% higher, to see this Index registered at 417.88.  The day starts with the U.S. Dollar steady and trading at 1.247 to Sterling and at 1.064 to the Euro, while North Sea Oil is near to steady and is selling at $ 54.70 per barrel. 

The London market started the day yesterday on a marginally softer note, while the New York market started the day with modest buoyancy and with both markets retaining this track into the early afternoon trade.  As the afternoon progressed the New York market added some more value and the London market moved closer to par, but with the New York market soon sliding back to maintain a modest sideways track for the rest of the day’s trade and matched by the London market, which maintained a lacklustre sideways track to the south of par through to the close.    The London market ended the day on a soft note and with 90.9% of its modest losses for the day intact, while the New York market ended the day on a modestly positive note and with 29.4% of the earlier gains of the day intact.   This close does little to inspire or provide any indication of direction and one might expect to see little better than a steady start for early trade today against the prices set yesterday, as follows: 

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

MAY     2143 – 10                                              MAY   137.75 + 0.45

JUL      2169 – 10                                              JUL    140.10 + 0.50

SEP      2176 – 12                                             SEP    142.45 + 0.55

NOV     2178 – 11                                              DEC   145.85 + 0.55

JAN      2175 – 11                                             MAR   149.05 + 0.60

MAR     2177 – 11                                             MAY   151.20 + 0.60

MAY     2181 – 11                                              JUL    153.05 + 0.70

JUL      2187 – 11                                              SEP    154.60 + 0.70

SEP      2195 – 11                                              DEC   156.70 + 0.65

NOV     2202 – 11                                              MAR   158.80 + 0.65


Coffee Market Report April 06 2017

With the month of March past, the Indonesia government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month were 61,778 bags or 28.33% higher than the same month in the previous year, at a total of 279,823 bags.   This contributes to the cumulative Sumatran robusta coffee exports for the first six months of the present October 2016 to September 2017 coffee year to being 90,282 bags or 5.16% higher than the same period in the previous coffee year, at a total of 1,840,996 bags. 

It has to be noted though that while robusta coffee exports for the present 2016/ 2017 coffee year from Sumatra are so far keeping pace with the volumes exported during the previous 2015/2016 coffee year, that this latter 2015 to 2016 coffee year registered 50.49% lower exports than the previous 2014/ 2015 coffee year and that the 2015/2016 coffee year was in reality a dismal coffee year for the island.  However, with the new crop now starting and forecasted to be a larger new crop, one can expect that the islands monthly export volumes shall continue to improve and that by October, one shall see a much-improved performance for the present 2016/2017 coffee year.   But unlikely to match the 5.3 million bags exported during the 2015/2015 coffee year.   

The Colombian Coffee Federation have reported that the countries coffee production for the month of March was 76,000 bags or 8.05% higher than the same month last year, at a total of 1,020,000 bags.   This improved performance has contributed to the countries cumulative coffee production for the first six months of the present October 2016 to September 2017 coffee year to being 652,000 bags or 8.87% higher than the same period in the previous coffee year, at a total of 7,999,000 bags. 

In terms of coffee exports from Colombia the Coffee Federation have reported that the countries coffee exports for the month of March were 70,000 bags or 6.48% higher than the same month last year, at a total of 1,150,000 bags.   This contributes to the countries cumulative exports for the first six months of the present October 2016 to September 2017 coffee year to being 605,000 bags or 8.86% higher than the same period in the previous coffee year, at a total of 7,433,000 bags. 

These are impressive figures and it would appear that Colombia is well on target for the forecasted 15 million bags crop for the present coffee year, which is related to the recent years of an extensive replanting program of aged trees and along with improved farm husbandry and inputs.   While the increased volumes of mostly fine washed arabica coffee exports from Colombia this year and accompanied by overall increased supply from the Central American producer bloc, continues to impact negatively upon speculative sentiment within the related New York arabica coffee market. 

These washed arabica coffee exports do however come on top of the steady volumes of mostly natural arabica coffees that have been coming to the consumer markets from Brazil, which follows the countries bumper arabica coffee harvest last year and has contributed to the present surplus supply of overall arabica coffee.  But with most of the trade, industry and official forecasts pointing to a biennial bearing dip in the size of the pending new Brazil arabica coffee crop, it does so far indicate that by the second half of this year there might no longer be a surplus arabica coffee supply.   Albeit that for the present and with the main stream consumer markets in Europe, North America and Japan holding relatively large volumes of coffee stocks, there would appear to be no short term concerns on the part of the consumer market industry buyers.  

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 40.76 usc/Lb., while this equates to 29.22% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,390 bags yesterday; to register these stocks at 1,367,569 bags.  There was meanwhile a larger in number 7,075 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,149 bags. 

The commodity markets were mixed in trade yesterday, but with buoyancy for many markets and the overall macro commodity index took a positive track for the day.   The Oil, Cocoa, London robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy, while the Natural Gas, Sugar, New York arabica Coffee, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.26% higher, to see this Index registered at 416.92.  The day starts with the U.S. Dollar near to steady and trading at 1.249 to Sterling and at 1.067 to the Euro, while North Sea Oil is steady and is selling at $ 53.15 per barrel. 

The London and New York markets both started the day yesterday with early buoyancy and with both markets taking a positive track into the early afternoon trade, but as the afternoon progressed the London market came under pressure and drifted back to par and even took some dips south of par, which was followed by the New York market which likewise fell back to trade around par.   The London market did however recover and move back into modest positive territory in late trade, but with the New York market tending to flounder and move south in late trade.  The London market ended the day on a very positive note and with 100% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 64.3% of the earlier losses of the day intact.  This mixed close does little to inspire and might suggest that the markets are due for little better than a steady start for early trade today against the prices set yesterday, as follows: 

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

MAY     2153 + 6                                                MAY   137.30 – 0.45

JUL      2179 + 2                                                JUL    139.60 – 0.45

SEP      2188 + 2                                               SEP    141.90 – 0.50

NOV     2189 + 4                                                DEC   145.30 – 0.50

JAN      2186 + 3                                               MAR   148.45 – 0.55

MAR     2188 + 2                                               MAY   150.60 – 0.55

MAY     2192 + 3                                                JUL    152.35 – 0.50

JUL      2198 + 3                                                SEP    153.90 – 0.50

SEP      2206 + 3                                                DEC   156.05 – 0.50

NOV     2213 + 3                                                MAR   158.15 – 0.55


Coffee Market Report April 05 2017

The National Coffee Institute in Honduras have come to the fore with concerns that with they have identified a new and virulent strain of Roya or Leaf rust within eight out of the countries fifteen coffee districts, which could be damaging for their forthcoming year end new crop.   Noting that unless quick steps are taken to counter this problem, it could potentially be more devastating than the last major outbreak in 2012. 

This is of course not only a Honduras problem but with the Central American producers so close to each other and the ability of Roya or Leaf Rust to spread, it becomes a regional problem.  However, one must believe that with the last regional devastating Roya experience still very much in mind, that the agricultural authorities within all of the Central American countries shall be more alert and quicker this time, to step in and assist farmers to control the threat.   Thus, for the present, one would not expect that the threat of Roya shall prove to be supportive for market sentiment, within the New York market. 

The coffee markets remained within their narrow trading range yesterday, while the physical coffee market remains relatively slow in its activity for the present.   It is however noted that with the new Central American coffee crop long since completed that there are seemingly rising volumes of new crop coffees now heading towards the alternative buyer, being the New York certified stocks.   This further indicating the lacklustre nature of the physical trade, which is being dictated by the relatively well stocked and somewhat complacent consumer market industry buyers. 

However, in terms of the New York markets washed arabica coffee certified stocks the producer bloc of Mexico and Central America who traditionally dominate these stocks, still only account for 38.38% of the stocks and followed by Colombia with 23.13% of the stocks, Peru with 17.14% of the stocks and East African producer bloc with 14.68% of the stocks.   The balance of these stock being related to relatively small contributions from Brazil, India and Papua New Guinea.  But one might expect that in the coming months that there shall be increased volumes of Central American and Peru coffees coming to these stocks and that the evidence of rising stocks, might prove to dampen bullish spirits within the market. 

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.53 usc/Lb., while this equates to 29.65% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 165 bags yesterday; to register these stocks at 1,364,179 bags.  There was meanwhile a larger in number 18,870 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,224 bags. 

The commodity markets were mixed in trade yesterday, but with the positive nature of the influential Oil markets assisting to buoy the overall macro commodity index for the day.   The Oil, Natural Gas, Copper, Orange Juice, Gold and Silver markets had a day of buoyancy and the Coffee and Wheat markets were steady for the day, while the Sugar, Cocoa, Cotton, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.26% higher, to see this Index registered at 415.86.  The day starts with the U.S. Dollar near to steady and trading at 1.244 to Sterling and at 1.067 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 53.55 per barrel. 

The London and New York markets both started the day yesterday on a softer note and with both markets maintaining this stance, into the early afternoon trade.   There was however a great deal of hesitancy and seemingly indecision and as the afternoon progressed, there was a recovery to par for the London market, while the New York market moved back into modest positive territory.   This modest recovery within the New York market was however short lived and both markets took something of a sideways track for the rest of the day and towards a near to steady and close to par close for the day.   The London market ended the day on a steady note and having recovered 88.2% of the earlier in the day’s losses, while the New York market ended the day on a likewise steady note and having recovered 87.9% of the earlier losses of the day by the close.   This close provides little indication of direction and one might think the ability of the market to shrug off the earlier in the day’s negative pressure, shall set the markets for a cautious and hesitant near to steady start for early trade today, against the prices set yesterday, as follows: 

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

MAY     2144 – 6                                                MAY   137.75 – 0.10

JUL      2172 – 2                                                JUL    140.05 – 0.20

SEP      2182 – 2                                               SEP    142.40 – 0.20

NOV     2184 – 4                                                DEC   145.80 – 0.15

JAN      2180 – 3                                               MAR   149.00 – 0.10

MAR     2182 – 2                                               MAY   151.15 – 0.05

MAY     2185 – 3                                                JUL    152.85 – 0.05

JUL      2191 – 3                                                SEP    154.40 – 0.05

SEP      2199 – 3                                                DEC   156.55 unch

NOV     2206 – 3                                                MAR   158.70 unch


Coffee Market Report April 04 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease their net long position within the market by 122.98% over the week of trade leading up to Tuesday 28th. March; to register a net short position of 1,592 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.16%, to register a net long position of 31,030 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 74.42%, to register net long position of 3,488 Lots.   This net long position which is the equivalent of 988,833 bags has most likely been marginally decreased further, following a period of mixed but overall negative trade that has since followed and likewise, the new net short sold position of the Managed Money fund sector of the market has been marginally increased. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net long position within this market by 1.12% during the week of trade leading up to Tuesday 28th. March; to register a record net long position of 38,330 Lots.  This net long position which is the equivalent of 6,388,333 bags has most likely been marginally decreased further, following the period of mixed but overall more negative trade that has since followed. 

With the conclusion of the month of March the National Coffee Institute in Honduras has reported that the countries coffee exports for the month were 393,620 bags or 62.12% higher than the same month last year, at a total of 1,027,214 bags.   This surge in the March exports they report, has resulted in the countries cumulative coffee exports for the first six months of the present October 2016 to September 2017 coffee year to be close to 38% higher than the same period in the previous coffee year, at 3.22 million bags. 

These figures from Honduras are however very much in line with the expectations of the National Coffee Institute, who have been predicting coffee exports from this small country and to put it into perspective a country that has a landmass that is only 19.35% of that of Kenya, of well in excess of 6 million bags for this new coffee year.   A very impressive and fruitful result for the countries coffee farmers who over the past few years, have been alike the Colombian farmers, been working with an aggressive farm rejuvenation program and with the planting out of new disease resistant and higher yield varieties of coffee trees.  

The trade ministry in Brazil have reported that the countries coffee exports for the month of March were 290,000 bags or 10.43% lower than the same month last year, at a total of 2.49 million bags.   This did is however not surprising as following last year’s dismal conilon robusta coffee crop in Brazil, there has been a minimal contribution this year to the coffee exports volumes, from the conilon robusta sector of the country’s coffee farmers.    Thus, one would say that in terms of consumer market coffee supply, that the contribution from Brazil arabica coffees remains relatively steady.     

The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.64 usc/Lb., while this equates to 29.69% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,417 bags yesterday; to register these stocks at 1,364,014 bags.  There was meanwhile a larger in number 11,184 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 42,354 bags. 

The commodity markets were mostly on a road south yesterday, with the overall macro commodity index taking a negative track for the day.  The Cocoa, London arabica Coffee, Wheat, Corn and Gold markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Sugar, New York arabica Coffee, Cotton, Copper, Orange Juice, Soybean and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.8% lower, to see this Index registered at 414.79.  The day starts with the U.S. Dollar steady and trading at 1.243 to Sterling and at 1.066 to the Euro, while North Sea Oil is near to steady and is selling at $ 51.80 per barrel. 

The London market started the day yesterday on a near to steady note, while the New York market and presumably taking speculative heart from the evidence of the liquidation of fund and speculative longs, started the day with immediate buoyancy.  The London market soon recovered and with both markets taking a modest positive track into the early afternoon trade, when with the added support of buy stops being triggered, the New York market added additional value and with the London market taking a more settled sideways track.   The surge in value for the New York market that peaked with gains of 3.5 usc/Lb. for the day did finally falter and there was a steady erosion for the rest of the day’s trade within this market that took steady downside track into negative territory, while the London market continued on its modestly positive sideways track for the day.   The London market ended the day on a steady note but with only 23.1% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 82.4% of the losses of the day intact.   This close does little to inspire confidence and contributes to painting a negative technical picture for the markets, which is likely to see the markets due of only 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. 

MAY     2150 + 1                                                 MAY   137.85 – 1.45

JUL      2174 + 3                                                 JUL    140.25 – 1.40

SEP      2184 + 5                                                SEP    142.60 – 1.40

NOV     2188 + 5                                                 DEC   145.95 – 1.40

JAN      2183 + 7                                                MAR   149.10 – 1.40

MAR     2184 + 7                                                MAY   151.20 – 1.40

MAY     2188 + 7                                                 JUL    152.90 – 1.45

JUL      2194 + 4                                                 SEP    154.45 – 1.55

SEP      2202 + 4                                                 DEC   156.55 – 1.55

NOV     2209 + 4                                                 MAR   158.70 – 1.55

 


Coffee Market Report April 03 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net long position within the market by 74.42% during the week of trade leading up to Tuesday 28th. March; to register a net long position of 3,488 Lots on the day.  This net long position which is the equivalent of 988,833 bags has most likely been little changed, following the period of mixed but overall sideways trade, which has since followed. 

Despite the many forecasts that have come to the fore over the past couple of months that talk of a biennially bearing lower Brazil arabica coffee crop from this year’s pending harvest, the world’s largest coffee cooperative Cooxupé were reported on Reuters on Saturday 1st. April to have announced that they expect that they shall be in receipt of only a marginal 1.27% less coffee from this year’s harvest.  This report which indicates their expectations to receive 6.2 million bags of coffee from their farmers and coming from a cooperative that one would expect to be conservative in their forecast if only to support prices and presuming that Reuters in not party to April Fools jokes, is likely to be somewhat negative for the speculative spirits within the New York market. 

There are meanwhile reports of good flowerings within the main Central Highlands coffee districts of Vietnam, which indicate that so long as the forthcoming rain season proves to be normal, that the country shall once again be in receipt of a large new crop for the end of this year.   What is perhaps noticeable in terms of the news of good flowerings towards the new crop is that so far, this year, there has been little negative noise coming forth from Vietnam where traditionally prior to the start of the main April to October rain season, there is unfounded speculation that dry weather shall be damaging for the potential of the new crop.  Thus, for the present, forecasts are for the prevailing tight global robusta coffee supply to start to ease, by the end of the year.  

One might comment that the coffee news for the present and especially the news that Brazil might not after all experience a relatively sharp dip in arabica coffee supply with this year’s crop and along with the prospects for improve robusta coffee supply by the end of the year, is tending to look somewhat bearish for the presently flat and lacklustre coffee terminal markets.  But it is always difficult to predict the direction that the funds might wish to take and noting that the speculative longs within the New York market have been mostly liquidated over the past weeks, it is possible the markets might be able to shrug off the bearish news items that have come to the fore, so as to remain within the present relatively narrow trading range. 

The July to July contracts arbitrage between the London and New York markets broadened on Friday, to register this at 43.17 usc/Lb., while this equates to 30.48% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 9,496 bags on Friday; to register these stocks at 1,361,597 bags.  There was meanwhile a larger in number 12,855 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,170 bags. 

The commodity markets were mixed in trade on Friday and with the overall macro commodity index taking a sideways track, but ending the day on the positive side of par.  The Oil, Cotton, Wheat, Corn, Gold and Silver markets had a day of buoyancy and the New York arabica Coffee market was steady, while the Natural Gas, Sugar, Cocoa, London robusta Coffee, Copper, Orange Juice and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.06% higher, to see this Index registered at 418.12.  The day starts with the U.S. Dollar steady and trading at 1.254 to Sterling and at 1.067 to the Euro, while North Sea Oil is near to steady and is selling at $ 52.20 per barrel. 

The London market and New York markets started the day on Friday with hesitant modest buoyancy but with the London market soon coming under pressure and slipping below par and followed by the New York market, to see both markets taking a modestly negative track into the early afternoon trade.   As the afternoon progressed the London market lose a little more weight before settling on something of a sideways track for the rest of the day’s trade, while the New York market recovered into modest positive territory before slipping back to par for the close.   The London market ended the day on a modestly softer not and with 44.4% of the earlier losses of the day intact, while the New York market ended the day on a close to steady note and having recovered 96.4% of the earlier losses of the day by the close.    This close provides little in the way of direction and one might expect to see something of a slow and near to steady start for early trade today against the prices set on Friday, as follows: 

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

MAY     2149 – 12                                              MAY   139.30 unch

JUL      2171 – 8                                                 JUL    141.65 – 0.05

SEP      2179 – 7                                                SEP    144.00 – 0.05

NOV     2183 – 6                                                 DEC   147.35 – 0.05

JAN      2176 – 8                                                MAR   150.50 – 0.15

MAR     2177 – 7                                                MAY   152.60 – 0.15

MAY     2181 – 7                                                 JUL    154.35 – 0.20

JUL      2190 – 7                                                 SEP    156.00 – 0.20

SEP      2198 – 7                                                 DEC   158.10 – 0.15

NOV     2200 unch                                             MAR   160.25 – 0.05


Coffee Market Report March 31 2017

The weather reports from Brazil indicate that the countries rain during the month of March over all the main coffee districts have been below average for the month, but with good ground water retention levels following the earlier months of fair rains, this is not being seen to be a major problem for the main arabica coffee districts.  It might however in terms of the leading conilon robusta coffee state of Espirito Santo, which has suffered from poor rains for most of the summer, be supportive for forecasts for another modest conilon crop. 

Meanwhile in terms of the tight internal market supply of conilon robusta coffees in Brazil, there is once more talk of the possibility that the Brazil government might resuscitate the earlier but stalled decision, to allow for the import of up to 1 million bags of robusta coffee.   However, there is nothing formal that has been announced, while the latest rumours also indicate some form of tariff protection for the countries conilon farmers for any imports, which would most likely make such imports should they finally come about, somewhat uncompetitive for the countries soluble coffee industry, who have been lobbying for the import approval. 

One would further question if there might be any short-term justification for the approval of robusta coffee imports as with the new conilon robusta coffee crop starting to come to the market in the coming month, there would be no real short term shortage of internal market conilon robusta coffee supply.   The only problem being for the export orientated soluble coffee industries in Brazil, is their ability to compete within the consumer markets with alternative supply from India, Vietnam, Ecuador, Colombia and Mexico. 

The physical coffee market is presently lacklustre and slow and with consumer market industries apparently quite complacent, which is bringing little in the way of industry excitement to the terminal markets.   Thus leaving the terminal markets very much in the hands of the funds and speculative sectors of the markets, which presently lack any striking fundamental news items to provide for any aggression within the markets and they continue to trade within a relatively narrow price range.   

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 41.28 usc/Lb., while this equates to 29.63% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,054 bags yesterday; to register these stocks at 1,352,101 bags.  There was meanwhile a larger in number 3,547 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,025 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 40,500 bags or 1.47% over the week of trade leading up to Monday 27th. March, to register these stocks at 2,789,667 bags, on the day. 

The commodity markets were mixed in trade yesterday but with the influential Oil markets further recovering, it assisted for the overall macro commodity index to take a near to steady track for the day.   The Oil and Natural Gas markets had a day of buoyancy and the New York arabica Coffee and Cocoa markets had a steady day, while the Sugar, London robusta Coffee, Copper, Orange Juice, Grains, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.35% lower, to see this Index registered at 417.87.  The day starts with the U.S. Dollar steady and trading at 1.248 to Sterling and at 1.067 to the Euro, while North Sea Oil is steady and is selling at $ 52.10 per barrel. 

The London market and New York markets started the day yesterday with modest buoyancy but with both markets drifting back into modest negative territory for early afternoon trade.   The New York market did however recover and to trade in a lacklustre manner and taking a sideways track for the rest of the day with value erratically changing either side of par, while the London market took a modestly negative sideways track through the close of the day.    The London market ended the day on a modestly negative note and with 58.8% of the earlier losses of the day intact, while the New York market ended the day on a steady note and with no change from the previous day’s close.   The ability of the markets to hold relatively steady might be somewhat encouraging for sentiment and one might expect to see a follow through hesitantly steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2146 – 10  

MAY     2171 – 10                                              MAY   139.30 unch

JUL      2190 – 11                                               JUL    141.70 unch

SEP      2199 – 13                                              SEP    144.05 unch

NOV     2202 – 13                                               DEC   147.40 + 0.05

JAN      2198 – 14                                              MAR   150.65 + 0.05

MAR     2198 – 14                                              MAY   152.75 + 0.05

MAY     2201 – 13                                               JUL    154.55 unch

JUL      2209 – 12                                               SEP    156.20 unch

SEP      2217 – 12                                               DEC   158.25 unch

NOV     2200 unch                                             MAR   160.30 + 0.05


Coffee Market Report March 30 2017

With the month of April due to start the trade in Vietnam and following what was apparently very active export activity this month and an indicated coffee export volume of 3 million bags, are forecasting a more modest export volume for the coming month.   In this respect the private trade predictions are for Vietnam coffee exports during April to be between 1.7 million and 2.2 million bags, but it is early days and with the new crop Indonesian robusta coffees still mostly to the fore, one might still expect that the Vietnam coffee exports in April might still top these early forecasts. 

There are nevertheless and with the relatively buoyant prices being dictated by the London market, already some early new crop robusta coffees coming to the market within the internal trade in Indonesia.   But with the main harvest still to kick in and to start picking up in volume in the coming weeks, one might not expect to see a surge in Indonesian robusta coffee exports before May and June this year. 

Meanwhile both the Australian Department of Meteorology and the U.S. Government Climate Prediction Centre are forecasting a 50% plus chance for a new El Niño phenomenon to occur within the Pacific Ocean for the second half of this year, which would threaten hot and dry weather conditions for the Pacific rim countries.   Which in terms of coffee and should the El Niño occur in any intensity, would directly affect the coffee growing conditions for Colombia, Peru and Indonesia and to a lesser extent, have some influence on global weather conditions in general.   However, for the present it is just a possibility and is a factor that is not yet having any influence upon coffee market sentiment, albeit the many shall undoubtedly keep a close eye upon the developing weather news and forecasts.  

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.83 usc/Lb., while this equates to 29.31% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,833 bags yesterday; to register these stocks at 1,351,047 bags.  There was meanwhile a similar in number 5,607 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,572 bags. 

The commodity markets were mixed in trade yesterday but with the influential Oil markets further recovering, it assisted for the overall macro commodity index to take a steady to modestly positive track for the day.   The Oil, Natural Gas and New York arabica Coffee markets had a day of buoyancy and the London robusta Coffee and Copper markets were near to steady, while the Sugar, Cocoa, Cotton, Orange Juice, Wheat, Corn, Soybean,  Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.01% lower, to see this Index registered at 419.36.  The day starts with the U.S. Dollar steady and trading at 1.243 to Sterling and at 1.076 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 51.80 per barrel. 

The London market started the day yesterday on marginally softer note, while the New York market started the day on a steady note.    The New York market did though soon drift lower and to join the London market in modest negative territory and with both markets, taking this track into the early afternoon trade.  As the afternoon progressed the New York market started to recover and to move into modest positive territory, which was followed by a recovery for the London market that moved back to par.   The New York market continued to take something of a sideways track in modest positive territory, while the London market maintained an erratic sideways track either side of Par through to the close.  The London market ended the day on a steady note and with 37.5% of the earlier modest gains of the day intact, while the New York market ended the day on an uncertain positive note and with only 31% of the earlier gains of the day intact.    This close was somewhat uncertain and provides little in the way of direction, but one might expect to see a cautious and hesitant near to steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2146 + 3 

MAY     2171 + 3                                                MAY   139.30 + 0.45

JUL      2190 + 1                                                JUL    141.70 + 0.50

SEP      2199 – 1                                                SEP    144.05 + 0.50

NOV     2202 – 2                                                 DEC   147.35 + 0.50

JAN      2198 – 1                                                MAR   150.60 + 0.55

MAR     2198 – 1                                                MAY   152.70 + 0.55

MAY     2201 – 1                                                 JUL    154.55 + 0.60

JUL      2209 + 1                                                 SEP    156.20 + 0.60

SEP      2217 + 1                                                 DEC   158.25 + 0.65

NOV     2200 unch                                              MAR   160.25 + 0.60


Coffee Market Report March 29 2017

With the month of March coming to a close and with the majority of the export registrations for the month in hand the customs authorities in Vietnam have estimated that the countries coffee exports of mostly robusta coffee for the month shall be higher than expectations, at a total of approximately 3 million bags.   This is rather a surprising number, when earlier forecasts had been for exports for the month of between 2.33 million and 2.67 million bags. 

This improved performance for the month of March would the authorities report, contribute to the countries coffee exports for the first three months of this year to being only 1.6% lower than the same period in the previous year, at a total of 7.8 million bags.   One might comment that this is an impressive performance when one considers that these exports are based on a smaller new crop that was harvested, over the period of October 2016 to January 2017. 

However, it is perhaps not a surprising performance as these exports have come to the fore within an environment of lack of competition from the Brazil conilon robusta coffees and relatively modest robusta coffee supply from Indonesia, while the reference prices of the London market and the related high internal market prices to the farmers, have assisted to encourage high volumes of farm sales to the mills and exporters.   But with such good volumes of sales and exports over the recent months and with internal market stocks declining, it does tend to indicate that Vietnam coffee exports shall start to tail off in volume by July this year. 

Presently there has been a market acceptance that global robusta coffee supply is in deficit for the short term and until the end of the year, when there is the potential for a larger new Vietnam crop and therefore, the short-term focus is now upon the prospects for the new Brazil arabica coffee crop. 

In this respect and with a host of forecasts indicating that the new Brazil arabica coffee crop might be a much as 5 million bags lower than the last crop and with only modest volumes of carry over arabica coffee stocks due to join the new crop in July this year, it is indicating that that there is potential for only close to matching supply to demand for arabica coffee supply for the forthcoming October 2017 to September 2018 coffee year. 

However, many still question the prospects for such a large biennially bearing lower new Brazil arabica coffee crop but if it does prove to be true, it is a factor that is in mind and is likely to limit the downside potential for the related New York arabica coffee market.   While furthermore, it is a factor that if proved to be close to correct and with the speculative sector of the market not really very long in the market at present, that would prove to be a supportive factor for sentiment within the New York market for the second half of this year.  

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.51 usc/Lb., while this equates to 29.18% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 984 bags yesterday; to register these stocks at 1,345,214 bags.  There was meanwhile a larger in number 1,780 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 53,179 bags. 

The commodity markets were mixed in trade yesterday but with the influential Oil markets recovering, it assisted for the overall macro commodity index to take a positive track for the day.   The Oil, Copper and Silver markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Orange Juice and Gold markets tended softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher, to see this Index registered at 419.38.  The day starts with the U.S. Dollar steady and trading at 1.240 to Sterling and at 1.081 to the Euro, while North Sea Oil is near to steady and is selling at $ 50.65 per barrel. 

The London and New York markets started the day yesterday on marginally softer note, while the New York market started the day with modest buoyancy but this was short lived and both market took a softer track into the early afternoon trade.   As the afternoon progressed the markets did though manage to steady at their lows and while the London market took something of a sideways track for the rest of the day, the New York market recovered and took as marginally softer sideways track for the rest of the day’s trade.   The London market ended the day on a soft note and with 64.3% of the earlier losses of the day intact, while the New York market ended the day on a marginally softer note and having recovered 75.9% of the earlier losses of the day.    This close that is more of a correction post the previous day’s recovery than a direction, provides little in the way of an indicator for the markets and one might expect to see a hesitant near to steady start for early trade today, against the prices set yesterday, as follows: 

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

MAR     2143 – 18 

MAY     2168 – 18                                               MAY   138.85 – 0.35

JUL      2189 – 19                                               JUL    141.20 – 0.35

SEP      2200 – 19                                              SEP    143.55 – 0.35

NOV     2204 – 18                                               DEC   146.85 – 0.35

JAN      2199 – 16                                              MAR   150.05 – 0.35

MAR     2199 – 16                                               MAY   152.15 – 0.35

MAY     2202 – 16                                               JUL    153.95 – 0.35

JUL      2208 – 12                                               SEP    155.60 – 0.35

SEP      2216 – 12                                               DEC   157.60 – 0.40

NOV     2200 unch                                              MAR   159.65 – 0.40


Coffee Market Report March 28 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net long position within the market by 28.45% over the week of trade leading up to Tuesday 21st. March; to register a net long position of 6,926 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.2%, to register a net long position of 30,976 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their long position within the market by 24.15%, to register net long position of 13,637 Lots.   This net long position which is the equivalent of 3,866,029 bags has most likely been decreased again, following a period of mixed but overall negative trade that has since followed and likewise, that of the Managed Money fund sector of the market. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market increase their net long position within this market by 2.81% during the week of trade leading up to Tuesday 21st. March; to register a record net long position of 38,766 Lots.  This net long position which is the equivalent of 6,461,000 bags has most likely been marginally increased again, following the period of mixed but overall more positive trade that has since followed. 

With the new Indian arabica coffee crop now well into the new crop harvest and following late last year’s forecast by the well-respected United States Department of Agriculture Foreign Agriculture Service forecast for a 17.7% lower new arabica coffee crop of 1.42 million bags and an 8% lower new robusta coffee crop of 3.75 million bags, the Coffee Board of India is now reported to be forecasting an overall 9% lower new coffee crop to fuel supply for the present October 2016 to September 2017 coffee year.    There is however some debate on the size of this new crop on the part of private trade and industry players as while the USDA talk in terms of a new Indian crop of an overall 10.86% lower new Indian crop of 5.17 million bags, there are many private trade and industry forecasts that point to a marginally higher figure but with now apparently no doubt that India shall have a smaller new coffee coffee crop of between 5.2 to 5.4 million bags this year. 

Post last week’s National Coffee Association annual meeting in the U.S.A. they report a survey that indicates that more Americans are drinking a daily cup of coffee, which is a reversal of four years of decline.   However, the report does indicate that while 29% of the survey respondents had ownership of the more parsimonious single cup coffee brewing machines, that this has now risen to 33% of respondents.   Thus, indicating that while there might be more cups being consumed, that this is possibly not going to directly relate to any dramatic increase in the actual volume of coffee being consumed, within this well-developed traditional coffee market.   

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 40.04 usc/Lb., while this equates to 28.76% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 4,013 bags yesterday; to register these stocks at 1,346,198 bags.  There was meanwhile a smaller in number 825 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 51,399 bags. 

The commodity markets were mixed but mostly looking a little south yesterday, with the exception of the precious metals and coffee markets, to see the overall macro commodity index taking a softer track for the day.   The Coffee, Gold and Silver markets had a day of buoyancy and the Cocoa markets was relatively steady for the day, while the Oil, Natural Gas, Sugar, Orange Juice, Grains and Copper markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% lower, to see this Index registered at 419.21.  The day starts with the U.S. Dollar steady and trading at 1.254 to Sterling and at 1.085 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 50.40 per barrel. 

The London and New York markets started the day yesterday on marginally softer note and taking something of a sideways negative track, into the early afternoon trade.   However, as the afternoon progressed and despite the negative influences of the overall macro commodity index, the London markets bounce off its modest lows and with buy stops being triggered swiftly moved into strong positive territory and shortly followed, by a similar bounce on the part of the New York market, but with the latter market making an impressive but more modest recovery.   Both markets from thereon took something of a sideways track, through to a positive close for the day.   The London market ended the day on a positive note and with 78.3% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 91.4% of the earlier gains of the day intact.   This close assists to paint a more positive technical picture and may prove to be positive for confidence and thus, one might expect that the markets will be set for a relatively steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2161 + 52

MAY     2186 + 47                                               MAY   139.20 + 1.60

JUL      2208 + 48                                               JUL    141.55 + 1.55

SEP      2219 + 47                                              SEP    143.90 + 1.50

NOV     2222 + 48                                               DEC   147.20 + 1.50

JAN      2215 + 49                                              MAR   150.40 + 1.50

MAR     2215 + 49                                               MAY   152.50 + 1.60

MAY     2218 + 49                                               JUL    154.30 + 1.65

JUL      2220 + 49                                               SEP    155.95 + 1.65

SEP      2228 + 49                                               DEC   158.00 + 1.65

NOV     2200 unch                                              MAR   160.05 + 1.65


Coffee Market Report March 27 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net long position within the market by 24.15% during the week of trade leading up to Tuesday 21st. March; to register a net long position of 13,637 Lots on the day.  This net long position which is the equivalent of 3,866,029 bags has most likely been reduced again, following the period of mixed but overall negative trade, which has since followed. 

The International Coffee Organisation have reported that the global coffee exports for the month of February were a marginal 0.1% higher than the same month last year, at a total of 9.71 million bags.  This increase has contributed to the cumulative global coffee exports for the first five months of the present October 2016 to September 2017 coffee year to have been 6.7% higher than the same period in the previous coffee year, at a total of 49.52 million bags. 

These cumulative global coffee exports were seen to have been a 35.92 to 64.08 ratio of robust and arabica coffees, which is a relatively small share for the robusta coffees that had seen these price competitive coffees steadily increasing market share over the past few years.   But it is a reflection of the prevailing relatively tight robusta coffee supply, which has seen low grade arabica coffees starting to supplement robusta coffees within many price sensitive blends within the consumer markets. 

A report has come to the fore that the Colombian Coffee Federation intend to propose to the Colombian congress that the present coffee farmers levy of the equivalent of 6 usc/Lb. on their coffee, be increased by 25% to the equivalent 7.50 usc/Lb.  This increase they say is required so as to continue to fund the present farm renovation program that has in the past few years, assisted to steadily increase the countries annual coffee production, while they note that some of this increase would also to applied to support the coffee farmers pension fund.   

One might comment that it is a relatively modest increase in terms of the overall coffee price and one that is directly for the benefit of the farmers and therefore, one might not expect that such an increase would have much in the way of negative impact upon the Colombian coffee farmer’s sentiment towards the Federation.   Making note that the Colombian government and the Colombian Coffee Federation also provide coffee price support to the farmers, at times that the international coffee prices force domestic prices into loss making territory and do by nature, gain the respect of the farmers. 

Despite the relatively attractive robusta coffee prices at present, the Ivory Coast has reported something of a slow start to their coffee exports for this year, with the country’s exports for the first two months of this year reported to be 33.72% lower than the same period last year, at a total of only 108,300 bags.   This is a relatively modest number in terms of the expectations for exports for this year of approximately 1.3 million bags, but one might expect that with new crop coffees coming to the port warehouses, that the export volumes shall steadily start to increase.  

The May to May contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.58 usc/Lb., while this equates to 29.49% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,370 bags on Friday; to register these stocks at 1,350,211 bags.  There was meanwhile a larger in number 10,205 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,574 bags. 

The commodity markets were mixed and generally tending softer on Friday, to see the overall macro commodity index taking a softer track for the day.   The Oil, Natural Gas, Gold and Silver markets had a day of buoyancy, while the Sugar, Cocoa, Coffee, Copper and Orange Juice markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.35% lower, to see this Index registered at 420.28.  The day starts with the U.S. Dollar losing a little more muscle and trading at 1.255 to Sterling and at 1.087 to the Euro, while North Sea Oil is tending softer and is selling at $ 49.75 per barrel. 

The London and New York markets started the day on Friday on a softer note, but with the London market soon picking up support and heading back into positive territory, while the New York market remained below par into the early afternoon trade.    The New York market breaking through the phycological 140 usc/Lb. mark started to attract sell stops and without sufficient industry buying under the market the losses were accentuated, while the London market started to attract selling pressure and to head back into negative territory.  The New York market tended to steady at the lows and to take a more modest negative track for the rest of the day, while the London market took a steady downside track through to the close.  The London market ended the day on a soft note and with 80% of the earlier losses of the day intact, while the New York market ended the day on a very soft note and with 85.3% of the earlier losses of the day intact.   This close tends to paint a negative technical picture for the markets, but one might think that there might be some degree of hesitant caution and a near to steady start due for early trade today against the prices set on Friday, as follows: 

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

MAR     2109 – 30

MAY     2139 – 24                                               MAY   137.60 – 2.90

JUL      2160 – 24                                               JUL    140.00 – 2.90

SEP      2172 – 23                                              SEP    142.40 – 2.85

NOV     2174 – 25                                               DEC   145.70 – 2.85

JAN      2166 – 26                                              MAR   148.90 – 2.90

MAR     2166 – 26                                               MAY   150.90 – 2.95

MAY     2169 – 26                                               JUL    152.65 – 2.95

JUL      2171 – 26                                               SEP    154.30 – 2.95

SEP      2179 – 26                                               DEC   156.35 – 3.00

NOV     2200 unch                                              MAR   158.40 – 3.05

 


Coffee Market Report March 24 2017

The Brazilian statistical body CEPEA have estimated that with the new arabica coffee crop harvest still a couple of months to the fore, that the countries farmers and coffee cooperatives still have in hand arabica coffee stocks that are the equivalent of 20% of the past crop harvest.    This being somewhat better than the 15% factor at the same time last year, but is of course based on the fact that Brazil had a much improved new arabica coffee crop in 2016. 

One must however keep in mind that a good percentage of these stocks shall be sold by the start of the new harvest and with forecasts for a biennially bearing new arabica coffee crop this year that might be as much as 3 million to some even talking 5 million bags lower than the last crop, that the farmers and cooperatives would have no fear to have some carry over arabica coffee stocks in hand to supplement a smaller new arabica coffee crop.  

In terms of the new conilon robusta coffee harvest in Brazil there are reports that harvesting is already starting within the northern coffee province of Rondonia, but with the main conilon robusta districts in the north of the Espirito Santo only due to start in three to four weeks’ time.    These new crop conilon robusta coffees coming to the fore perhaps just in time, so as to fuel the internal market industry demand for these coffees. 

Meanwhile in yesterday’s auction of aged government retention coffee stocks that offered 137,000 bags and mostly directed towards the country’s domestic industries, 133,300 bags or 97.3% of the coffees on offer were sold.   These coffees having sold at an average price of the equivalent of 106.65 usc/Lb., being seen to be a good price for such aged coffees and all indications that there is now very little in the say of such state stock now remaining.  

Internal market trade in robusta coffees in Vietnam is being reported to be slowing and with some degree of internal market price resistance in play, while albeit early in the day for the new robusta coffee crop in Indonesia, there are reports that early new crop coffees are already starting to come to the market.    Presumably encouraged by the still relatively firm reference prices of the London market, against which the farmers and internal traders can value these deliveries. 

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.39 usc/Lb., while this equates to 30.17% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,533 bags yesterday; to register these stocks at 1,345,841 bags.  There was meanwhile a larger in number 7,878 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,369 bags. 

The commodity markets were mixed and generally flat yesterday and with the overall macro commodity index taking a steady track, for the day.  The Natural Gas, Sugar, Cocoa, Copper and Wheat markets had a day of buoyancy and the Oil, London robusta Coffee and Cotton markets were steady for the day, while the New York arabica Coffee, Orange Juice, Corn, Soybean, Gold and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher, to see this Index registered at 421.75.  The day starts with the U.S. Dollar steady and trading at 1.248 to Sterling and at 1.077 to the Euro, while North Sea Oil is steady and is selling at $ 50.25 per barrel. 

The London market started the day yesterday on a near to steady note, while the New York market started the day on a marginally softer note, but with the London market soon coming under some pressure and both markets taking a softer track for early afternoon trade.    As the afternoon progressed both markets seemingly bottomed off and headed back up and briefly through par for later trade, but with the London market sliding back to par for the close, while the New York market once again slid back into negative territory.    The London market ended the day on a steady note and having recovered 94.1% of the earlier losses of the day, while the New York market ended the day on a soft note and with 55.8% of the earlier losses of the day intact.   This close does little to inspire and one might expect to see 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. 

MAR     2139 – 1

MAY     2163 – 1                                                 MAY   140.50 – 1.20

JUL      2184 – 1                                                  JUL    142.90 – 1.15

SEP      2195 unch                                             SEP    145.25 – 1.10

NOV     2199 unch                                              DEC   148.55 – 1.15

JAN      2192 unch                                             MAR   151.80 – 1.10

MAR     2192 unch                                             MAY   153.85 – 1.10

MAY     2195 unch                                              JUL    155.60 – 1.15

JUL      2197 unch                                              SEP    157.25 – 1.15

SEP      2205 – 4                                                  DEC   159.35 – 1.10

NOV     2200 unch                                              MAR   161.45 – 1.10


Coffee Market Report March 23 2017

The Uganda Coffee Development Authority UCDA have reported that the countries coffee exports for the month of February were125,942 bags or 46.31% higher than the same month last year, at a total of 397,883 bags.   This improved performance has contributed to the countries cumulative coffee exports for the first five months of the present October 2016 to September 2017 coffee year to being 422,962 bags or 29.76% higher than the same period in the previous coffee year, at a total of 1,844,178 bags. 

This improved performance in exports for the coffee year so far, is made up by an improved volume of 310,129 bags or 30.08% of robusta coffees, which totalled 1,341,230 bags and an improved volume of 112,833 bags or 28.92% of arabica coffees, which totalled 502,948 bags.  While in term of value the Ugandan coffee exports for the first five months of the present October 2016 to September 2017 coffee year are US$ 85,160,629.00 or 61.5% higher than the same period in the previous coffee year, at a total of US$ 223,631,119.00. 

This is heartening news for the Uganda coffee farmers who are mostly smallholder farmers and aside from indicating that the country is well on track for coffee exports for the present coffee year to perhaps even exceed 3.8 million bags, it definitely is an inspiration for the farmers to continue with their prevailing expansion plans in terms of new plantings and farm yield enhancing inputs. 

Making note that with the free market nature of the Ugandan coffee farming industry and the resulting ability for farmers to quickly cash in their harvested coffees and by nature of competition gain a deserved much higher share of the final export prices, it has made it that much easier for the UCDA and many private industry and aid related bodies that are involved within this industry, to inspire the countries farmers to further invest in to coffee farming. 

The Guatemalan National Coffee Association have reported that with the new crop coming to completion, that the anticipated much larger new crop shall not after all be on the cards and that due to the negative impact of adverse climatic conditions and ongoing Roya or Leaf Rust infestation on some farms, that the new crop shall only be approximately 3.32 million bags.   This is a number that is however still only marginally below the many private trade forecasts for a new crop of between 3.4 million and 3.5 million bags and therefore, is unlikely to have much impact upon market sentiment.  

A reverse auction in Brazil yesterday with the countries soluble coffee industry players bidding electronically for supply of conilon robusta coffees from the farmers, proved to be a failure and did not attract any support from the countries conilon cooperatives and farmers.   This auction that had been proposed by the Brazil Agricultural Ministry was designed to test the farmers who had protested the now stalled proposal to allow for the importation of robusta coffees, by stating that there was in fact sufficient internal market supply. 

However, while the failure of the auction and even though some of the industry prices bid exceeded the prevailing market prices for conilon robusta coffees would indicate that there might once again be inspiration to allow for the importation of supplementary robusta coffee supply, one would think that this might not be the case.   Especially so as not only are sales being concluded for conilon coffees to the soluble coffee manufacturers, but with the new conilon robusta coffee harvest only a month away and with it new supply, one would think that there would be no short-term merit in looking to external alternative supply. 

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 43.54 usc/Lb., while this equates to 30.73% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 640 bags yesterday; to register these stocks at 1,341,308 bags.  There was meanwhile a larger in number 9,840 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,491 bags. 

The commodity markets were mixed but many encountered a down day yesterday, in line with the weakness of the global equity markets, to see the overall macro commodity index taking a softer track as the day progressed.   The Cocoa, Cotton, Copper and Gold markets nevertheless had a day of buoyancy and the Sugar market was steady for the day, while the Oil, Natural Gas, Coffee, Orange Juice, Wheat, Corn, Soybean and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.24% lower, to see this Index registered at 421.59.  The day starts with the U.S. Dollar steady and trading at 1.249 to Sterling and at 1.080 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 50.30 per barrel. 

The London market started the day yesterday on a near to steady note, while the New York market started the day on a marginally softer note and with the markets maintaining this stance into the early afternoon trade.  However, as the afternoon progressed and with the negative influences of the overall macro commodity index having some influence the volatile New York market encountered speculative selling and lacking any buying aggression on the part of the industry sector of the market, started to trigger sell stops and a somewhat unexpected sharp decline in value before flattening out, to take a negative sideways track to the close.   The London market followed suit in a more modest manner and even late in the day to take a brief spike back to par, before ending the day on a modestly softer note.  The London market ended the day having recovered 63.2% of the earlier losses of the day, while the New York market ended the day on a soft note and with 84.7% of the earlier losses of the day intact.  This close once again paints something of a negative technical picture for the markets but one might think that following the relatively sharp reversal of the fortunes of the New York market that there might be a degree of caution and that the markets might be due for a hesitant wait and see near to steady start for early trade today, against the prices set yesterday, as follows: 

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

MAR     2140 – 7

MAY     2164 – 7                                                 MAY   141.70 – 3.05

JUL      2185 – 6                                                  JUL    144.05 – 3.05

SEP      2195 – 6                                                 SEP    146.35 – 3.10

NOV     2199 – 6                                                  DEC   149.70 – 3.05

JAN      2192 – 6                                                 MAR   152.90 – 3.00

MAR     2192 – 5                                                 MAY   154.95 – 3.00

MAY     2195 – 4                                                  JUL    156.75 – 2.95

JUL      2205 – 4                                                  SEP    158.40 – 2.95

SEP      2209 – 4                                                  DEC   160.45 – 3.00