Market Reports

Coffee Market Report February 20 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 11.92% during the week of trade leading up to Tuesday 14th. February; to register a net long position of 17,511 Lots on the day.  This net long position which is the equivalent of 4,964,291 bags has most likely been since increased, following the period of mixed but overall more positive trade, which has since followed. 

The news that Brazil is due to allow for the importation of up to 1 million bags of robusta coffee over a period of four months is attracting some degree of sceptical comment, as there are some concerns over the detail of this concession to the countries soluble coffee industries.  Some commentators foresee the potential for restrictive phytosanitary regulations to be applied, which might prove to stall or delay the importation of specific lots of coffee and result in lower than expected import volumes.  Thus, for the present the news of these potential imports being approved, has not had a marked effect upon the fortunes of the London market.  

The weather reports from Brazil have indicated that last week the leading conilon robusta coffee state of Espirito Santo was in receipt of good rains, while with the exception of the very southern arabica coffee state of Parana, the majority of the main arabica coffee states encountered hot and dry weather conditions.   While Espirito Santo was forecasted to have more rains over this past weekend. 

One might think though that while the rains over Espirito Santo would have brought with them much needed relief for the conilon robusta coffee farmers, that it might be too late to assist to significantly increase the potential of the new crop that is due to start being harvested in April.   But it would with many of the farmers utilising supplementary irrigation, assist to build up resources to maintain development of the new crop and to perhaps reduce the deficit nature of this new crop as has been forecasted by many internal reports so far. 

The Rwanda Agricultural Export Board are reported to have voiced their concerns over the lack of growth in yields on the part of the countries important coffee and tea industries and are advocating increased usage of fertilisers and supplementary irrigation, as a means to improve yields.   In respect of the latter and with the countries coffee production dominated by small scale farmers and with approximately 42,000 hectares of land under coffee, the report indicates that the government is prepared to fund up to 50% of the farmer’s investments into irrigation equipment.   

The May to May contracts arbitrage between the London and New York markets broadened on Friday, to register this at 50.94 usc/Lb., while this equates to 34.06% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 increase by 5,717 bags on Friday; to register these stocks at 1,321,865 bags.  There were meanwhile a smaller in number 2,732 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 42,250 bags. 

The commodity markets and with the U.S. dollar showing some degree of muscle through the day were mostly on the back foot on Friday, ahead of the long weekend for most U.S. markets that comes with todays President’s Day holiday within the majority of the states, to see the overall macro commodity index take a softer track for the day.   The New York arabica Coffee and Orange Juice markets nevertheless ended the day on a positive note and the Sugar and London robusta Coffee markets were near to steady, while the Oil, Natural Gas, Cocoa, Cotton, Copper, 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 0.3% lower, to see this Index registered at 430.37.  The day starts with the U.S. Dollar steady and trading at 1.242 to Sterling and at 1.061 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 55.05 per barrel. 

The London market started the day on Friday with modest buoyancy, while the New York market started the day on a near to steady note, but with the London market soon coming under some pressure and with both markets entering the early afternoon trade to the south of par.   As the afternoon progressed the London market shrugged off most of the negative pressure, while the New York market continued on a modestly softer track and with the London market ending the day on a modestly softer note, while the New York market attracted late in the day support and pre-long weekend buy stops coming into play, to post a swift recovery.  The London market ended the day on a softer note but having recovered 76.2% of the earlier losses of the day by the close, while the New York market ended the day on a positive note and with 59% of the late in the day gains intact.   This close and with the recovery for the New York market ahead of today’s Presidents Day holiday for the market, shall perhaps prove to be positive for sentiment for the London market that shall trade solo today, to assist the London market for a steady to buoyant start for early trade today against the prices set on Friday, as follows: 

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

MAR     2144 – 5                                                MAR   147.80 + 1.50

MAY     2174 – 5                                                MAY    149.55 + 1.15

JUL      2186 – 2                                                 JUL    151.80 + 1.15

SEP      2193 – 1                                                SEP    154.10 + 1.15

NOV     2196 unch                                             DEC   157.25 + 1.15

JAN      2196 – 2                                                MAR   160.25 + 1.15

MAR     2199 – 2                                                MAY   161.95 + 1.15

MAY     2200 – 2                                                 JUL    163.45 + 1.05

JUL      2201 – 2                                                 SEP    164.95 + 1.05

SEP      2209 – 2                                                 DEC   167.00 + 0.90

 


Coffee Market Report February 17 2017

The Brazil Foreign Trade Chamber CAMEX and therefore the Brazil government is reported to have approved the importation of up to 1 million bags of robusta coffee yesterday, with a minimal import duty of 2% to be applied to these imports.    These imports are however to be restricted to only 250,000 bags per month, while they shall only be allowed to proceed once the decision has be gazetted. 

The restrictive monthly volumes one would suggest, is a concession to the countries conilon coffee farmers who have over the past six months been countering the negative effects of an approximate 40% lower 2016 conilon crop, by the significant price premiums that they have able to demand from the countries domestic coffee industry.   But with the domestic industry traditionally absorbing approximately 1 million bags of conilon robusta coffee per month and the imports only likely to cover only 25% of this demand, one might imagine that internal market prices for conilon coffee shall remain relatively buoyant. 

The bigger question is thought and with the new conilon robusta coffee crop due to the mostly dry and hot weather experienced over the past five months within the main conilon producing state of Espiritu Santo being forecasted to be another modest crop, if this import concession shall set something of a precedent.   In this respect and with forecasts presently indicating a potential 3 to 4 million bags deficit conilon robusta crop due for this year, will the Brazil government concede to further robusta coffee imports from July onwards and through to the follow on conilon robusta coffee crop in April 2018.    

It is a one would think to be a strong possibility and if this were to be the case and depending on the fortunes of the next year end Vietnam robusta coffee crop and likewise the fortunes of the robusta coffee crops in Indonesia, India and Africa, it could prove to be a longer-term support factor for the related London market.  As for the present global robusta coffee supply is in deficit and all indications are so far, that it shall remain so until at least the end of the year.  

Meanwhile reports indicate that with the good profits from the past few months of sales in hand and on the back of a modestly lower robusta coffee crop that was completed last month, that there is building internal market price resistance in Vietnam.  This should with the resulting lower volumes of price fixation selling activity into the London market, prove to be a short-term support factor for the market and might continue to be a factor until the new Indonesian robusta coffee crop starts to come into play in three months’ time.   

Fundamental support factors are however not available for the short-term fortunes of the New York arabica coffee market, as for the present with good volumes of production in Colombia, an increased overall new crop in Mexico and Central America near to completion and forecasts for a larger new crop due for Peru, the global arabica coffee supply remains in surplus.    But not dramatically so, as with the tightness in robusta coffee supply there is increased demand for lower quality arabica coffees to supplement robusta coffee demand and one might suggest that this will assist to be supportive for the New York market.   Where the big question now is, what shall be the size of the new Brazil arabica coffee crop that is due to start impacting in July this year.  

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 49.56 usc/Lb., while this equates to 33.4% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 decrease by 919 bags yesterday; to register these stocks at 1,316,148 bags.  There were meanwhile a similar in number 960 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,982 bags. 

The commodity markets were mixed in trade yesterday and with a marginally softer U.S. dollar supportive for many markets but despite this, the overall macro commodity index struggled to remain on par.   The Oil, Cocoa, Coffee, Orange Juice, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Sugar, 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 0.22% lower, to see this Index registered at 431.67.  The day starts with the U.S. Dollar tending softer and trading at 1.250 to Sterling and at 1.067 to the Euro, while North Sea Oil is steady and is selling at $ 54.50 per barrel. 

The London and New York markets started the day yesterday with a degree of buoyancy and setting the mood for a positive track into the early afternoon trade, with added value coming to the fore for both markets as the afternoon progressed.   Little changed thought the day and both markets continued to maintain their positive track, through to the close.    The London market ended the day on a very positive note and with 91.2% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 67.4% of the earlier gains of the day intact.   This close shall assist to buoy the technical picture that both markets portray and one would think shall likewise buoy confidence and it is likely that this shall along with the softer dollar in play, assist for a follow through steady start for the markets today against the prices set yesterday, as follows: 

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

MAR     2149 + 33                                              MAR   146.30 + 1.80

MAY     2179 + 31                                              MAY    148.40 + 1.45

JUL      2188 + 30                                               JUL    150.65 + 1.45

SEP      2194 + 28                                              SEP    152.95 + 1.45

NOV     2196 + 26                                               DEC   156.10 + 1.45

JAN      2198 + 23                                              MAR   159.10 + 1.50

MAR     2201 + 23                                              MAY   160.80 + 1.50

MAY     2202 + 25                                              JUL    162.40 + 1.55

JUL      2203 + 26                                              SEP    163.90 + 1.60

SEP      2211 + 25                                              DEC   166.10 + 1.60


Coffee Market Report February 16 2017

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 66,627 bags or 1.06% during the month of January, to register these stocks at 6,322,767 bags at the end of the month.   These stocks do not of course 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. 

Therefore, if one is to consider the additional unreported stocks and look to end November stocks in North America of approximately 7.42 million bags, it would have equated to something in the order of at least 13 weeks of roasting activity.  This number would look to be  a very safe reserve, in terms of the steady flow of new crop arabica coffees from Brazil, Colombia, Central America and Vietnam that are now coming to the market. 

With the Brazil, Agricultural Ministry already supportive for the granting of a concession to allow the countries domestic roasting industry and in particular the soluble coffee producers to import up to 1 million bags of robusta coffees and awaiting the approval of the Foreign Trade Chamber, there has been further support for the approval of imports coming to the market yesterday.    In this respect the technical body linked to the Brazil Foreign Trade Chamber CAMEX is reported to be supportive of the importation of robusta coffees, so as to supplement the deficit supply of Brazil conilon robusta coffees and it is looking to be ever more likely that the approval shall be confirmed by early next week. 

The question might now be and presuming that the approval for the importation of 1 million bags of robusta coffees and at a minimal import duty of 2% is approved, if this shall open the door for Brazils domestic roasting industry to look to further volumes of imports of robusta coffees.   Presently and following the reports of dismal rainfall for most of the present October to April rainfall season for the state of Espiritu Santo that is the main conilon robusta growing state of the country, most forecasts indicate that this year’s conilon robusta crop shall be little better than last year’s crop. 

Thus, one must presume that should the approval for importation of robusta coffees to supplement the dismal 2016 conilon harvest be approved, that it shall set a precedent and make it easier for further robusta import concessions to be granted.  If this proves to be the case and with global robusta coffee supply already in deficit and contributing to only matching supply and demand global coffee supply for the present and a small new overall Brazil new crop being forecasted, it is likely to be something of a supportive factor for the medium to longer term market prices.   

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 49.52 usc/Lb., while this equates to 33.7% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 remain unchanged yesterday; to register these stocks at 1,317,067 bags.  There were meanwhile 2,605 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,022 bags. 

The commodity markets were mixed in trade yesterday but despite the settling back of the influential oil markets with most markets tending positive, the overall macro commodity index took a positive track for the day.  The Natural Gas, Sugar, Cocoa, Coffee, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil and Cotton markets tended softer for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.69% higher, to see this Index registered at 432.61.  The day starts with the U.S. Dollar tending softer and trading at 1.247 to Sterling and at 1.062 to the Euro, while North Sea Oil is steady and is selling at $ 54.40 per barrel. 

The London and New York markets started the day yesterday on a near to steady note and with both markets trading mostly marginally south of par into the early afternoon trade, which was a track that continued for a couple of more hours.  However, as the afternoon progressed there was a recovery triggered within both markets and a move up into positive territory which created some short-term excitement for the London market, where buy stops were triggered to accentuate the gains.    The London market did however soon attract selling pressure and both markets took a modest positive track, through to the close.   The London market ended the day on a positive note and with 62.5% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 66.7% of the earlier gains of the day intact.  This positive close albeit relatively modest might nevertheless prove to be mildly supportive for confidence and one might think that there shall be a follow through steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2116 + 20                                              MAR   144.50 + 0.85

MAY     2148 + 20                                              MAY    146.95 + 1.00

JUL      2158 + 15                                               JUL    149.20 + 0.95

SEP      2166 + 14                                              SEP    151.50 + 1.05

NOV     2170 + 13                                               DEC   154.65 + 1.10

JAN      2175 + 13                                              MAR   157.60 + 1.10

MAR     2178 + 14                                              MAY   159.30 + 1.10

MAY     2177 + 14                                              JUL    160.85 + 1.10

JUL      2177 + 14                                              SEP    162.30 + 1.05

SEP      2186 + 14                                              DEC   164.50 + 1.05


Coffee Market Report February 15 2017

The issue of threat of a repeat of the 45 day national truckers strike that impacted negatively upon Colombia’s coffee exports over June and July last year and with this having also disrupted exports into August last year, is rising its head once again.   Apparently following the arrest of a number of leading trucker’s union leaders for alleged fraud and public disorder that was related to these strikes, the unions are reporting that the government had failed to hold up to their promises, in terms of the agreement that assisted to conclude the strikes. 

Presently the Colombian Truckers Union are in negotiation with the Colombian government authorities to force the implementation of the promises they say have not been implemented, but apparently, there is a lot of pressure on the part of union members to once again go on strike.  But in the meantime, there have been voices of concern on the part of many of Colombia’s exporters, who are doing their best to inflate port warehouse stocks of coffee, so as to reduce the negative impact of a possible strike. 

The partial failure of the short rain season during the last quarter of last year for Uganda and Kenya is becoming even more of a concern, with some long-range weather forecasters now questioning the potential of the forthcoming March to May main rain season.   Already the Kenyan government has declared a National Emergency for 23 out of 47 of its counties, due to the drought conditions and with concerns rising within the country as a whole. 

The lack of rains and with Kenya being the world’s leading tea exporter is already having some impact upon the volumes of tea coming to the Mombasa tea auctions and the prices, while there are concerns already being voiced by coffee farmers in both Uganda and Kenya.   Thus, while there have not yet been any strong voices of concern for the prospects of East African coffee supply in the coming months ahead of the main rain season, it shall be a factor to be watched in the coming months.  

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 49.43 usc/Lb., while this equates to 33.87% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 7,028 bags yesterday; to register these stocks at 1,310,039 bags.  There were meanwhile a smaller in number 5,772 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 41,417 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 1,333 bags or 0.49% during the week of trade leading up to Monday 13th. February, to register these stocks at 2,697,500 bags, on the day. 

Despite the negative effects of some degree of renewed muscle for the U.S. dollar yesterday, following speculation for a further interest rate hike for the dollar next month, the commodity markets on the back of the buoyancy for the influential oil markets, managed to support a modestly positive track for the overall macro commodity index.   The Oil, Sugar, Orange Juice and Silver markets had a day of buoyancy and the Cotton market was steady, while the Natural Gas, Cocoa, Coffee, Copper, Wheat, Corn, Soybean and Gold markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.11% higher, to see this Index registered at 429.62.  The day starts with the U.S. Dollar near to steady and trading at 1.247 to Sterling and at 1.058 to the Euro, while North Sea Oil is steady and is selling at $ 54.30 per barrel. 

The London market started the day yesterday on a steady note, while the New York market started with some degree of modest buoyancy and with markets maintaining this stance of London trading around par and New York in modest positive territory into the afternoons trade.    As the afternoon progressed the New York market started to falter and with both markets heading back into negative territory and to see the markets taking a further slide south, but with both markets soon bouncing off the lows and taking only a modestly soft track into the close of the day’s trade.   The London market ended the day on a soft note and with 57.9% of the earlier losses of the day intact, while the New York market ended the day on a modestly softer note and having recovered 65.7% of earlier losses of the day by the close.   This close does little to assist with the charts and the technical picture of the markets but with many potentially bullish fundamental factors to the fore in terms of the next Brazil crop, East African dry conditions, Colombian strike etc., one might think that it could assist to keep many producers off the field of play and 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. 

MAR     2096 – 11                                              MAR   143.65 – 0.60

MAY     2128 – 11                                              MAY    145.95 – 0.60

JUL      2143 – 9                                                 JUL    148.25 – 0.60

SEP      2152 – 9                                                SEP    150.45 – 0.60

NOV     2157 – 9                                                 DEC   153.55 – 0.80

JAN      2162 – 9                                                MAR   156.50 – 0.75

MAR     2164 – 9                                                MAY   158.20 – 0.75

MAY     2163 – 9                                                JUL    159.75 – 0.75

JUL      2163 – 9                                                SEP    161.25 – 0.75

SEP      2172 – 9                                                DEC   163.45 – 0.75


Coffee Market Report February 14 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 26.32%% over the week of trade leading up to Tuesday 7th. February; to register a net long position of 20,090 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1.96%, to register a net long position of 34,424 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 20.61%, to register net long position of 19,881 Lots.   This net long position which is the equivalent of 5,636,175 bags has most likely been marginally increased, following the period of mixed but overall more positive trade which 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 decrease their net long position within this market by 6.25% during the week of trade leading up to Tuesday 7th. February; to register a record net long position of 43,501 Lots.  This net long position which is the equivalent of 7,250,167 bags has most likely been further decreased, following the period of mixed but overall more negative trade that has since followed. 

The debate over the possibility of Brazil allowing for the import of robusta coffees to supplement the supply of the low stocks of conilon robusta coffees to the countries soluble coffee industry continues, with the countries Agricultural Ministry having asked the country’s Foreign Trade Chamber to support the importation of up to 1 million bags of robusta coffees and at minimal 2% import tariff.   This request is scheduled to be debated on Monday next week, but in terms of the relatively modest number of bags that have been indicated and even if approved, it might not be seen to be significantly market supportive.  

The potential for Brazil robusta coffee imports aside, the global robusta coffee supply with exporters in Vietnam holding fair stocks in hand is fairly stable for the present.  However, reports indicate that with farmers and internal traders in Vietnam already well sold and at mostly profitable price levels, that the internal market for new crop robusta coffees in Vietnam is experiencing rising price resistance.   One might suggest that with limited competition from other robusta coffee producers in Asia and Africa and on the back of a smaller new crop in Vietnam, that price resistance shall continue to prevail through to the last quarter of the year and with the advent of the still to be quantified new Vietnam crop.   

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 49.53 usc/Lb., while this equates to 33.80% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 2,070 bags yesterday; to register these stocks at 1,310,039 bags.  There were meanwhile a larger in number 2,521 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,189 bags. 

It was a mixed but overall softer day for the commodity markets yesterday, as against a positive day for the equity markets, to see the overall macro commodity index taking a softer track for the day.    The Cotton, Copper, Wheat, Corn and Soybean markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Orange Juice, 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 0.849% lower, to see this Index registered at 429.15.  The day starts with the U.S. Dollar tending softer and trading at 1.254 to Sterling and at 1.062 to the Euro, while North Sea Oil is steady and is selling at $ 54.30 per barrel. 

The London and New York markets started the day on a hesitantly steady note but this was short lived and both markets slipped back to take a marginally softer track into the early afternoon trade, which was the start for the London market to take a negative dip prior to taking a softer sideways track for the rest of the day’s trade, while the New York market was more erratic in trade.    The latter New York market took a sharp swing south during the afternoon prior to recovering to close to par, but to falter and to retreat to join the London market on a negative track through to the close.   The London market ended the day on a soft note and with 74.1% of the earlier losses of the day intact, while the New York market ended the day on a likewise soft note and with 69.6% of the earlier losses of the day intact.   This close that contributes towards something of a negative technical picture does little to inspire confidence and one might expect to see little better than 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     2107 – 21                                              MAR   144.25 – 1.50

MAY     2139 – 20                                              MAY    146.55 – 1.60

JUL      2152 – 19                                               JUL    148.85 – 1.60

SEP      2161 – 18                                              SEP    151.05 – 1.60

NOV     2166 – 17                                               DEC   154.35 – 1.55

JAN      2171 – 16                                              MAR   157.25 – 1.55

MAR     2173 – 16                                              MAY   158.95 – 1.55

MAY     2172 – 16                                              JUL    160.50 – 1.55

JUL      2172 – 18                                              SEP    162.00 – 1.55

SEP      2181 – 18                                              DEC   164.20 – 1.55


Coffee Market Report February 13 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 20.61% during the week of trade leading up to Tuesday 7th. February; to register a net long position of 19,881 Lots on the day.  This net long position which is the equivalent of 5,636,175 bags has most likely been since increased, following the period of mixed but overall more positive trade, which has since followed. 

The Vietnam government has reported that while the countries coffee exports for the month of January were 20.5% lower than the same month last year, the value of these coffee exports of 2,338,333 bags was 3.5% higher than the same month last year, at a total of US$ 318,800,000.00.     This improved performance having contributed to the countries trade surplus for the month of January to have been 30.5% higher than the same month last year, at a total of 1.15 billion U.S. dollars and related to exports for the months, at a value of 14.34 billion U.S. dollars. 

Weather reports from the leading conilon robusta coffee state of Espirito Santo in Brazil continue to forward disturbing news, with the forecasted rainfall for last week proving to be lower than expected.   This supports the earlier forecasts for Brazil to encounter another dismal and potentially deficit conilon robusta coffee crop this year, but so far, the decision by the Brazil government on the possibility of allowing imports of robusta coffees to supplement their domestic roaster demands for these coffees, has been further delayed. 

Meanwhile the Brazil government continue with their auctions of aged retention coffee stocks that are targeted towards the countries domestic roasters, with Thursdays action selling 100% of the 148,772 bags on offer.   These coffees sold at an average price of 108.25 usc/Lb., which is a competitive price in terms of the prices being demanded for conilon robusta coffees within the internal market in Brazil at present. 

Despite some earlier reports of concerns over the unseasonal rains that were encountered within Nicaragua and Costa Rica at the end of last year and during the harvesting season for the lower grown coffees within these countries, the latest reports from Nicaragua are indicating that the resulting ripe cherry drop is unlikely to have severely damaged the new crop potential for the country.   With the latest forecasts for this new crop now indicating that the new crop harvest shall match the previous year’s crop, at in excess of 2 million bags. 

There are however concerns being raised within East Africa, following the partial failure of the short rains in the last quarter of last year in many parts of Uganda and Kenya.   This with the main rain season only due to start late next month, has resulted in the Kenya government declaring a drought to be in place in many districts within the country and headlining the report as a National Disaster for 23 out of the nation’s 47 counties.   The report does not however note any threat to the countries forecasted coffee production for the present October 2016 to September 2017 coffee year, which is foreseen to be approximately between 700,000 and 800,000 bags.  

The May to May contracts arbitrage between the London and New York markets widened on Friday, to register this at 50.22 usc/Lb., while this equates to 33.90% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 3,437 bags on Friday; to register these stocks at 1,307,969 bags.  There were meanwhile a larger 9,603 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,668 bags. 

It was a mixed but overall positive day for the commodity markets on Friday, with the overall macro commodity index taking a positive track for the day.  The Oil, New York arabica Coffee, Cotton, Copper, Wheat, Corn, Soybean and Silver markets had a positive day’s trade and the London robusta Coffee market was steady for the day, while the Natural Gas, Sugar, Cocoa, Orange Juice and Gold markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.246% higher, to see this Index registered at 432.83.  The day starts with the U.S. Dollar steady and trading at 1.249 to Sterling and at 1.062 to the Euro, while North Sea Oil is near to steady and is selling at $ 55.00 per barrel. 

The London and New York markets started the day on a near to steady note on Friday, but while the London market stuttered along at near to par into the afternoon trade, the New York market soon attracted support and started on a modest positive track for the day.   There was however little in the way of excitement within the markets and as the afternoon progressed both markets continued on a sideways narrow trading range and with the New York market remaining mostly to the positive side of par, while the London market remained mostly on par for the day.   The London market ended the day on a steady note and with only 16.7% of the earlier gains of the day intact, while the New York market ended the day on a modestly positive note and with 34.4% of the earlier gains of the day intact.   This somewhat hesitant close albeit leaning towards the positive is unlikely to inspire much in the way of confidence and one might expect to see little better than a hesitant steady start for early trade today against the prices set on Friday, as follows: 

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

MAR     2128 + 2                                                MAR   145.75 + 0.55

MAY     2159 + 2                                                MAY   148.15 + 0.55

JUL      2171 + 4                                                JUL     150.45 + 0.65

SEP      2179 + 6                                                SEP    152.65 + 0.65

NOV     2183 + 6                                                 DEC   155.90 + 0.65

JAN      2187 + 6                                                MAR   158.80 + 0.55

MAR     2189 + 4                                                MAY   160.50 + 0.55

MAY     2188 + 3                                                JUL    162.05 + 0.55

JUL      2190 + 3                                                SEP    163.55 + 0.55

SEP      2199 + 2                                                DEC   165.75 + 0.55


Coffee Market Report February 10 2017

The Brazil Exporters Association CECAFÉ have reported that Brazil exports of green coffee for the month of December were 150,000 bags or 5.92% lower than the same month in the previous year, at a total of 2.38 million bags. The conilon robusta coffee exported during the month of January being 22,118 bags, or double that of the total of only 11,037 bags reported in the December 2016 green coffee exports.  There is no doubt meanwhile that the soluble export market has taken a toll due to the overall tighter availability of conilon robusta coffees and this sector of the market have reported exports of soluble value added coffees to have registered a year on year decline to be at 35% lower than that of the same month last year, to a total of 174,743 bags in green coffee equivalent.
The May to May contracts arbitrage between the London and New York markets widened yesterday, to register this at 49.76 usc/Lb., while this equates to 33.71% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 1,901 bags yesterday; to register these stocks at 1,311,406 bags.  The certified stocks reported an increase of 4,756 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 35,065 bags.
It was a mixed but overall positive day for the commodity markets, although uncertainty surrounds the upcoming French and German elections pushing the Euro lower, there was a semblance of improved economic data confidence in the U.S. and the US Dollar gained in value against other major currencies on the day.  The Oil, Cotton, Coffee, Orange Juice, Wheat and Palladium markets had a positive day, while it was a softer day in Sugar, Cocoa, Copper, Corn, Soybean, Gold, Silver and Platinum markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.203% higher, to see this Index registered at 431.76.  The day starts with the U.S. Dollar trading at 1.25 to Sterling and steady at 1.065 to the Euro, while North Sea Oil is steady and is selling at $ 54.19 per barrel.
 
The coffee markets took a more positive turn yesterday with the start in the session lower in London and a positive opening in New York. The London robusta market seemed to have satiated the speculative long liquidators for the time being and this market bubbled in roll over trade upward, to recover early losses and move into positive territory at midsession.  With the exception of an early in session technically driven gap back to the day’s opening levels in New York, this market gathered positive momentum through the session as roll over activity ahead of the approaching first notice day for the prompt month in New York, provided a degree of buoyancy and built up the positive position to the high of the day by midsession.  This market met with renewed selling at the top of the day and eased off but in a new higher and narrow range for the duration of the afternoon session to the close.  The markets set the close yesterday, on a positive note and near to the days’ highs in both markets and after a buoyant note, as follows: 
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2126 + 20                                              MAR   145.20 + 2.30
MAY     2157 + 21                                              MAY   147.60 + 2.30
JUL      2167 + 21                                              JUL     149.80 + 2.20
SEP      2173 + 20                                              SEP    152.00 + 2.15
NOV     2177 + 20                                               DEC   155.25 + 2.20
JAN      2181 + 22                                              MAR   158.25 + 2.20
MAR     2185 + 21                                              MAY   159.95 + 2.15
MAY     2185 + 21                                              JUL    161.50 + 2.10
JUL      2187 + 21                                              SEP    163.00 + 2.10
SEP      2187 + 21                                              DEC   165.20 + 2.15

Coffee Market Report February 09 2017

As the current July 2016 to June 2017 Brazil arabica coffee crop flows to the markets, there is a general consensus related to the lower output of conillon robusta production, a factor that has brought about the recent internal discussions within Brazil where the coffee industry petition for the Agricultural Ministry to permit a percentage of alternative robusta coffees to be imported. This has however been counteracted in recent meetings by a commitment from the producer organisations to provide substance to their claims that the robusta stocks being held within Brazil are sufficient to fuel the industry ahead of the next crop to come. 
The latest poll conducted by Reuters for the coming Brazil crop has reflected the overall median estimate that the coming July 2017 to June 2018 coffee crop may reach 50 million bags, with the polls estimates ranging in views from anywhere between 48 to 52 million bags.  This coming crop is in cherry development phase and largely the weather is reported to be conducive at this juncture, however the estimates for this coming crop and on the back of the larger biennial bearing arabica but smaller robusta 2016/2017 harvest, the output potential of this coming crop continues to be closely monitored and with the coffee harvest still some months ahead, these estimates are many and varied.   Brazil’s largest coffee cooperative Cooxupe that is a cooperative related to arabica coffees, has reiterated their forecast that earlier adverse weather conditions during the new crop development has in combination with the stress of the past higher biennial bearing crop of 2016, led to a projection that production for this coming July 2017 to June 2018 coffee harvest may be lower than previously anticipated.  Their forecast for this next harvest is for arabica coffee production to be between 35 and 38 million bags and a total Brazil crop to reach 43 and 47 million bags for the coming year.
The May to May contracts arbitrage between the London and New York markets widened yesterday, to register this at 48.41 usc/Lb., while this equates to 33.32% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 4,962 bags yesterday; to register these stocks at 1,313,307 bags.  The certified stocks reported an increase of 5,873 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,309 bags.
It was a generally buoyant day for the commodity markets yesterday, as the oil markets took a positive turn as higher US inventory data released to the markets were not as large as earlier indications.  The U.S. Dollar lost some ground over the day, encouraging interest for US Dollar denominated commodities in other major currencies.  It was an overall positive finish in the day for oil, Sugar, Cotton, Copper, Orange Juice, Corn, and a stronger close in Soybean markets, Gold, Silver, Platinum and Palladium were higher as did arabica coffee finish in mildly positive territory.  The Cocoa, robusta Coffee and Wheat markets were softer on the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.373% higher, to see this Index registered at 430.89.  The day starts with the U.S. Dollar trading at 1.251 to Sterling and steady at 1.068 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 54.36 per barrel.
 
The London robusta market opened on a softer track yesterday and in a continuation of the previous days’ speculative fund long liquidation and New York had a mildly positive start to the day.  This however met with a continuation of speculative spread activity and the morning session in New York faltered and both markets followed a weaker trend by midsession.  The latter day overall improved sentiment within the commodity sector registered a degree of influence in these markets to see New York in particular recover the earlier day losses and with renewed buying support, push back into positive territory where a short time spent at the top of the days’ levels met with renewed selling to cap the gains and this market finished just above unchanged on the day.  The London robusta market having already lost most of the ground earlier in the day, spent the last few hours trading within a narrow range with a degree of consolidation to register the close in this market just above the days low.  I was another respectable volume day in both markets to finish the day, on a softer note in London and hardly changed in New York, as follows: 
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2106 – 41                                             MAR   142.90 + 0.30
MAY     2136 – 36                                              MAY   145.30 + 0.25
JUL      2146 – 37                                              JUL    147.60 + 0.15
SEP      2153 – 36                                              SEP    149.85 + 0.10
NOV     2157 – 35                                               DEC   153.05 Unch
JAN      2159 – 32                                              MAR   156.05 Unch
MAR     2164 – 26                                              MAY   157.80 Unch 
MAY     2164 – 28                                              JUL    159.40 + 0.05
JUL      2166 – 36                                              SEP    160.90 + 0.05
SEP      2176 – 36                                              DEC   163.05 + 0.05

Coffee Market Report February 08 2017

Following on from the discussions that have been held in with coffee industry and producer organisations in Brazil, their Agriculture ministry has agreed to audit the robusta coffee stock numbers being held within Brazil, prior to any further decisions being made regarding the possibility of importation of alternative robusta coffees, to fuel domestic local roaster and soluble value added sector of the local coffee industry.  This decision is thus far well received by producer organisations who have told government officials that they hold around 4 million bags of robusta beans in stock and vehemently oppose any imports in this regard. 
Brazil’s producer representatives have further committed to present a report to the Ministry by Friday, to indicate that there are sufficient robusta stocks to maintain roaster industry needs.  These discussions have developed as a result of the smaller drought affected robusta conillon crop of last year and ahead of the new and forecast to be another smaller dry weather conillon robusta crop that is due to begin harvest around three months’ time. 
Subsequent to the Tet New Year celebrations in Vietnam and the traditional flurry of cash robusta coffee sales as producers gather finance ahead of the celebrations, the internal market has subsequently slowed as the gap between price expectation and market interest internally, has widened.  The latest developments in London meanwhile and the mainly speculatively driven lower futures market is likely to contribute toward additional resistance and limited producer interest to participate as sellers, thus likely that this largest robusta producer will remain measured in the short to medium term, and perhaps until the next Indonesian robusta harvest due to start next month and build into April may present a degree of price competition and perhaps to inspire more vigorous selling activity within Vietnam.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 46.53 usc/Lb., while this equates to 32.08% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 2,525 bags yesterday; to register these stocks at 1,308,345 bags.  The certified stocks reported an increase of 3,525 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,182 bags.
The commodity markets had a mixed day yesterday, as the approaching French elections and weaker economic data released by Germany lead to a slide in confidence in the Euro, while the U.S. Dollar posted a recovery on the day. It was a softer day for Oil, Sugar, Coffee, Cocoa, Cotton, Copper and a firmer day for Orange Juice, Wheat, Soybean, Corn, Gold, Silver, Platinum and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.13% higher, to see this Index registered at 429.28.  The day starts with the U.S. Dollar trading at 1.251 to Sterling and steady at 1.067 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 53.46 per barrel.
 
The coffee markets started the day yesterday on a mildly softer note but with some early in the session recovery noted in New York.  The early to midsession in both markets were however choppy and played out in a narrow range around the opening levels.  Good volumes were noted in both markets with first notice day spread activity taking hold and as the day progressed New York registered a lower track by midsession, London managed to post a recovery by the latter half of the day.  The news of good rains in Brazil and a general lack of fundamental news to guide the speculative sector in this markets, would appear to have prevailed on the day, with a softer trend contribution by the firming U. S. Dollar on the day.  The late afternoon session found limited underlying buying support as the trading day wound to a close, to see both markets register a softer close on the day, near to the day’s lows in London and on the day’s close in New York, to set the close yesterday in a respectable volume day for both markets, on a softer note in both markets, as follows: 
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2147 – 11                                             MAR   142.60 – 1.60
MAY     2172 –  9                                              MAY   145.05 – 1.50
JUL      2183 –  9                                              JUL    147.45 – 1.40
SEP      2189 –  8                                              SEP    149.75 – 1.45
NOV     2192 –  7                                               DEC   153.05 – 1.40
JAN      2191 –  7                                              MAR   156.05 – 1.40
MAR     2190 –  7                                              MAY   157.80 – 1.45
MAY     2192 –  7                                              JUL    159.35 – 1.40
JUL      2202 –  7                                              SEP    160.85 – 1.35
SEP      2212 –  7                                              DEC   163.00 – 1.25

Coffee Market Report February 07 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the longer term in nature Index Fund sector of this market increase their net long position within the market by 3.06%, to register a net long position of 36,131 Lots on the day.
Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by a nominal percent to register the net long position of 25,043 Lots.  This net long position which is the equivalent of 7,099,580 bags has most likely been further reduced, following the period of mixed but overall more negative trade which 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 decrease their net long position within this market by 1.40% during the week of trade leading up to Tuesday 31st January; to register a record high net long position of 46,399 Lots.  This net long position which is the equivalent of 7,733,166 bags has most likely been decreased further, following the period of mixed but overall softer trade that has since followed.
It has been reported in the press in Brazil that the countries Agricultural Ministry plans to meet with coffee farmer representatives and with representatives of the countries domestic coffee industry, to revisit the request from the local domestic coffee roaster industry for permission to allow the importation of robusta coffees.  These discussions are due to take place later today, while the coffee farmer representatives have yesterday voiced their concerns regarding the relatively low internal robusta stock estimates that have come to the fore via the Ministry, to request that these stocks be evaluated again, prior to making any decisions regarding the prospects of permitting other alternative robusta coffees to be imported into Brazil.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 47.62 usc/Lb., while this equates to 32.49% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 5,917 bags yesterday; to register these stocks at 1,310,870 bags.  The certified stocks reported a decrease of 6,959 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,657 bags.
The commodity markets had a mixed and generally softer day yesterday, as the leading in influence oil markets established a lower trend and the U. S. Dollar incrementally gained ground against a basket of other major currencies during the session.  It was a softer day for Oil, Cocoa, Coffee, Cotton, Orange Juice, Wheat and Corn, it was a fimrer day for Copper, Sugar and Soybean markets, a relatively flat close for Gold and a softer day for Silver, Platinum and Palladium markets all lower on the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3145% lower, to see this Index registered at 428.73.  The day starts with the U.S. Dollar trading at 1.246 to Sterling and steady at 1.07 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 54.72 per barrel.
 
The coffee markets started the day yesterday on a steady note in New York and mildly softer in London although early moves in both markets saw the markets recover back to positive territory, which in New York was met with speculative and fund liquidation pressure.  The day progressed into the midsession with a continuation of fund and speculative liquidation and both markets slipped into lower territory as the session moved into the afternoon.  The progressive slide was tapered to by the reappearance of new fund and speculative buying support which set the floor for the day and provided a degree of renewed confidence within both markets and a modest recovery toward the latter half of the day, the mixed overall sentiment within the commodity markets generally leant an influence to these markets as the day drew to a close and upward impetus dried up, to place market direction back into the hands of the sellers.  The London market slipped back towards the lows of the day to the closing bell while the New York market having registered a brief spurt of upward movement right at the end of the day again met with overhead selling and this market similarly set the close near to the days’ low, to see the close yesterday in a respectable volume day in New York and London, on a softer note in both markets, as follows: 
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2158 – 19                                             MAR   144.20 – 2.05
MAY     2181 – 16                                              MAY   146.55 – 2.15
JUL      2192 – 16                                              JUL    148.85 – 2.20
SEP      2197 – 15                                              SEP   151.20 – 2.15
NOV     2199 – 15                                              DEC   154.45 – 2.10
JAN      2198 – 15                                              MAR   157.45 – 2.00
MAR     2197 – 15                                              MAY   159.25 – 1.90
MAY     2199 – 15                                              JUL    160.75 – 1.90
JUL      2209 – 15                                              SEP    162.20 – 1.90
SEP      2219 – 15                                              DEC   164.25 – 2.05

Coffee Market Report February 06 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 a marginal 238 lots in the week of trade leading up to Tuesday 31st January; to register a net long position of 25,043 Lots on the day.  This net long position which is the equivalent of 7,099,580 bags has most likely been further decreased, following the period of mixed but overall more negative trade, which has since followed.
The Coffee Federation in Colombia have reported that the country’s coffee production for the month of January were 139,000 bags or 12.24% higher than the same month in the previous year, at a total of 1,275,000 bags.  This has contributed to the countries cumulative production the first four months of the new October 2016 to September 2017 coffee year to being 362,000 bags or 6.86% higher than the same period in the previous coffee year, at a total of 5,642,000 bags.
In terms of exports, the Coffee Federation in Colombia have reported that the country’s coffee exports for the month of January were 19,000 bags or 1.71% higher than the same month in the previous year, at a total of 1,128,000 bags.  This improved performance contributes to the countries cumulative exports for the first four months of the new October 2016 to September 2017 coffee year to being 525,000 bags or 11.49% higher than the same period in the previous coffee year, at a total of 5,096,000 bags.
The May to May contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 48.55 usc/Lb., while this equates to 32.66% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 6,403 bags on Friday; to register these stocks at 1,304,953 bags.  The certified stocks reported a relatively steep decrease of 7,845 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,616 bags.
The commodity markets were mixed on Friday, as market sentiment fluctuated between the latest and positively received employment data from the States, but with uncertainty in the new administrations fiscal policies to see the US Dollar lose further ground on the day.  It was a firmer day for Oil, Sugar and Gold markets, a relatively flat close in arabica Coffee and a softer day for Cotton, Copper, Cocoa, robusta Coffee, Soybean, Corn, Wheat, Silver, Platinum and Palladium.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.2753% lower, to see this Index registered at 430.08.  The day starts with the U.S. Dollar trading at 1.249 to Sterling and steady at 1.077 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 55.96 per barrel.
 
The coffee markets started the day on Friday on a softer note, with levels in New York posting a negative start although with a degree of buoyancy in the speculative and spread activity, to maintain a narrow range for the first few hours of the day.  The physical selling activity within the newly active Vietnam lead to a continuation of the softer trend in London on Friday and this market gapped lower on opening, to spend much of the morning session and into the afternoon below the opening and in a narrow range.  There was however a recovery noted in London toward the latter end of the day as this market managed to clamber back into positive territory but with renewed selling taking hold of the market as the day drew to a close to see London robusta finish the day on a softer note.  The New York arabica market demonstrated a stronger performance on the day with this market recovered by midmorning and trading back to positive territory where sentiment on either side lead to a choppy latter day session and the positive stance was maintained through to the latter half of the afternoon, to slip back toward the close as support dwindled toward the end of the day, New York set a close in a marginally positive finish after a good volume day, to set the prices in both markets at the close, as follows:
 
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2177 – 8                                               MAR   146.25 + 0.30
MAY     2197 – 4                                               MAY   148.70 + 0.30
JUL      2208 – 3                                               JUL    151.05 + 0.25
SEP      2212 – 4                                               SEP   153.35 + 0.25
NOV     2214 – 4                                               DEC   156.55 + 0.30
JAN      2213 – 4                                               MAR   159.45 + 0.30
MAR     2212 – 4                                               MAY   161.15 + 0.30
MAY     2214 – 4                                               JUL    162.65 + 0.30
JUL      2224 – 4                                               SEP    164.10 + 0.30
SEP      2234 – 4                                               DEC   166.30 + 0.35

Coffee Market Report February 03 2017

The General Statistics Office in Vietnam and with the month of January over, are forecasting that the countries coffee exports of mostly robusta coffees for the month shall be approximately 20.70% lower than that of the same month last year.  The lower export numbers would have been affected by the Tet New Year celebrations which fell in January this year instead of the more traditional first half of February, and will no doubt have had an influence on the final figures for January exports which are still to be finalised and reported.  The estimate at this stage is for exports to have reached around 2.33 million bags in this first month of the calendar year.   The initial forecast from general trade within Vietnam for the month of February meanwhile, is for a stable estimate of mainly robusta exports to be between 1.83 and 2.33 million bags over this coming short month.
The weather in Brazil has meanwhile, taken a turn for the better and there are reports of good rain dispersion through the southern arabica coffee growing areas, as well as the north eastern regions, where concerns have been raised about the year on year lack of sufficient seasonal rainfall that has resulted in parched and low ground moisture levels in the regions where the earlier to develop and ripen conilon robusta coffee crop is grown.
The tighter overall supply of the conilon robusta coffees to traditional export markets and more specifically to the immense demand of the internal coffee roaster consumer industry in Brazil, is causing some concern surrounding the prospects of market disruption as the matter of available stocks and price viability combine ahead of the new crop to come.  This new crop is estimated to be another dry weather induced smaller conilon robusta crop and is due to begin harvest in about two and half months’ time.  The internal tighter supply has brought fresh discussions to the fore to suggest that the local coffee processing industry should be allowed to import alternative origin robusta coffees to assist with the apparent shortfalls in local supply.  This is a view that was supported in an interview yesterday with the Ministry of Agriculture, albeit a move that is fiercely opposed by the coffee producer associations. There are future meetings set to take place, scheduled for Tuesday next week and to include representation from all sectors of the coffee industry within Brazil in an effort to reach a consensus around this complex and intensively sensitive subject.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 48.66 usc/Lb., while this equates to 32.77% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 3,002 bags yesterday; to register these stocks at 1,298,550 bags.  The certified stocks reported a relatively steep decrease of 9,377 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,461 bags.
The commodity markets were mixed yesterday, the U.S. Dollar lost ground against other major currencies while market sentiment oscillated between buoyant overall economic data and concerns over the future implications of the new U.S. administrations apparent protectionist policies, should these be implemented.  It was a softer day for the oil markets, Sugar, Cocoa, Coffee, Copper, Orange Juice, Wheat, Corn, Silver and a positive day for Cotton, Soybean, Gold, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3363% lower, to see this Index registered at 431.27.  The day starts with the U.S. Dollar trading at 1.251 to Sterling and steady at 1.075 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 55.81 per barrel.
 
The coffee markets started the day yesterday on a mildly positive stance, although London slipped into mildly negative territory and held steady in a narrowly negative range heading into the afternoon.  The latter day news regarding current discussions underway in Brazil which may longer term consider altering legislation to permit coffee imports, in combination with the latest weather reports that the weather in Brazil is conducive to both the conilon robusta and the arabica crop that is in cherry phase ahead of the new harvest to start mid this year, took some of long position wind out of the sails of the speculative sector in these markets, as did additional producer selling pressure that had been lacking from Vietnam over the past holiday week, make an appearance.  This activity lead to the markets setting a lower track as the day progressed into the late afternoon. The lower track set for the latter half of the day was met and countered along the way with sufficient underlying buyer support to meet the gradual slide in market value.  This underlying buyer support withdrew as the session drew toward the close however and the last hour in both markets saw sellers weigh in again, to end the day on the lows of the day, in both New York and London, to set the close yesterday after a respectable volume day, on a softer note, as follows:
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
MAR     2185 – 58                                              MAR   145.95 – 4.20
MAY     2201 – 56                                              MAY   148.50 – 4.05
JUL      2211 – 53                                              JUL     150.80 – 4.05
SEP      2216 – 52                                              SEP    153.10 – 4.00
NOV     2218 – 51                                              DEC    156.25 – 3.95
JAN      2217 – 51                                              MAR   159.15 – 3.95
MAR     2216 – 51                                              MAY   160.85 – 3.95
MAY     2218 – 51                                              JUL    162.35 – 4.00
JUL      2228 – 51                                              SEP    163.80 – 4.00
SEP      2238 – 51                                              DEC   165.95 – 4.00

Coffee Market Report February 02 2017

With the month of January 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 51,518 bags or 36.72% higher than the same month in the previous year, at a total of 191,833 bags.   However, following the modest export volumes of the month of October, the cumulative exports for the first four months of this new October 2016 to September 2017 coffee year are 45,258 bags or 3.31% lower than the same period in the previous coffee year, at a total of 1,322,477 bags.
The Trade ministry in Brazil have reported that the countries coffee exports for the month of January were near to par on that of the same month last year and registered at 2.50 million bags and slightly above that of the 2.49 million bags reported in exports for the same month in 2016.
The National Coffee Council in Honduras have reported that the countries coffee exports for the month of January recorded 41.60% increase on that of the same month in the previous year, at a total of 821,669 bags.   This improved volume has contributed to the countries cumulative coffee exports for the first four months of the present October 2016 to September 2017 coffee year to be 40.60% higher than the same period in the previous coffee year, at a total of 1,410,667 bags.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 50.17 usc/Lb., while this equates to 32.89% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 1,974 bags yesterday; to register these stocks at 1,295,548 bags.  The certified stocks reported a relatively steep increase of 19,593 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 56,838 bags.
It was an overall positive day for the commodity markets yesterday, while the U.S. Federal Reserve left interest rates unchanged after the two-day meetings held this week and concluded in the statement released yesterday.  The forward outlook was similarly positively received by the markets and provided an additional boost by improved employment and manufacturing data.  It was a mildly firmer day in the energy sector and so too a positive day for Sugar, Cocoa, Coffee, Cotton, Wheat, Corn, Soybean, Silver, Platinum and Palladium, although a softer close for Orange Juice, Copper and Gold on the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.8069% higher, to see this Index registered at 432.72.  The day starts with the U.S. Dollar firmer trading at 1.266 to Sterling and steady at 1.078 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 55.79 per barrel.
 
The markets started the day yesterday on a positive note in London and a mildly softer start to the day in New York.  The morning session continued in limited volume, on a positive note in London and mildly negative stance in New York where the range held within a narrow band toward the afternoon, just below opening levels. The latter day influence of generally positive overall market sentiment, assisted to provide a degree of buoyancy within the New York market to push levels above the line and into positive territory, where fresh buyers were triggered and to introduce stronger volumes to the floor as this market gained upward momentum.  The London market still restrained by the Tet New Year holiday in Vietnam and having set the bar in positive territory after a degree of early in the session volatility, flattened out at the higher levels set, toward the latter half of the day.  The late afternoon session in New York met with overhead seller pressure, to shed some of the gains of the session toward the close yesterday.  The markets finished the day in positive territory, after a buoyant and weighty volume day in New York off the day’s high and a positive close after early volatility and steady afternoon trade in London, to set the close yesterday, as follows:
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.

MAR     2243 + 21                                              MAR   150.15 + 0.60
MAY     2257 + 21                                              MAY   152.55 + 0.55
JUL      2264 + 20                                              JUL     154.85 + 0.50
SEP      2268 + 19                                              SEP    157.10 + 0.55
NOV     2269 + 20                                              DEC    160.20 + 0.60
JAN      2268 + 20                                              MAR   163.10 + 0.65
MAR     2267 + 20                                              MAY   164.80 + 0.65
MAY     2269 + 20                                              JUL    166.35 + 0.65
JUL      2279 + 20                                              SEP    167.80 + 0.65

Coffee Market Report February 02 2017


1st February, 2017.
West Africa’s leading robusta coffee producer, Ivory Coast have reported that the countries coffee exports for the month of December were 25.68% lower than that of the same month in the previous year and registered the months’ coffee exports at 72,933 bags.  The cumulative calendar year total for exports of mainly robusta coffees over the twelve month period from Ivory Coast, are reported at 18.28% or 191,717 bags higher than that of the same time in the previous year to December, to register exports at a total 1,243,483 bags in 2016.
The International Coffee Organisation have reported that global coffee exports for the month of December 2016 were 5.3% higher than the same month in the previous year, at a total of 10.17 million bags.  This has resulted in the cumulative global coffee exports for the first three months of the new October 2016 to September 2017 coffee year to be 8.3% higher than the same period in the previous coffee year, at a total of 29.77 million bags. The cumulative calendar year coffee exports for the twelve months ending December are further detailed that total arabica coffee exports registered an increase year on year of 3.63% to a total 73.26 million bags and similarly the total robusta coffee exports registered an increase year on year of 4.46%, to total 45.16 million bags in the twelve months to end December 2016.
 
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 50.58 usc/Lb., while this equates to 33.27% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 6,156 bags yesterday; to register these stocks at 1,297,522 bags.  The certified stocks reported a decrease of 4,821 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,245 bags.
The commodity markets had a mixed but overall positive day yesterday.  The US Dollar slipped lower and registered losses on the day against a basket of other major currencies. The latest round of US consumer confidence and manufacturing data would appear to have missed expectations, along with  a generally mixed market reception to the flow of alternate economic and political policies presently pouring through international media from the worlds’ largest economy.  The Oil markets registered an improvement on the day, so too was it a better day for Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Gold, Silver, Platinum and Palladium. It was a softer day for Orange Juice, Soybean and Coffee markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3443% higher, to see this Index registered at 429.26.  The day starts with the U.S. Dollar near to steady and trading at 1.255 to Sterling and 1.078 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 55.55 per barrel.
 
The London and New York markets started the day on a mildly softer note in both markets, with the slide in the US Dollar value assisting to boost the markets into positive territory during the early session, although briefly in New York and London, in a narrow range incrementally positive in limited morning volume of trade. As the day gained momentum and the American markets opened their day to lend an influence to direction, the news of conducive weather in the Brazil coffee areas weighed in on sentiment to see the latter half of the day move lower.  The trend in New York remained negative, with only limited underlying buyers present provide resistance and meet the volume of seller activity as the speculator sector of the market took precedence and cover, the New York market pressured lower by the latter half of the session.  The less active London market followed suit to see both markets in negative territory as the day drew to a close.  The low touched in New York appeared to attract fresh buying activity to the floor and both markets recovered a degree of the afternoon losses incurred toward the end of the day.  New York regained 1.97% from the low and London a recovery of 1.26% from the low on the day, to set the close in both markets yesterday, in negative territory but with a degree of late in the day buoyancy, as follows;
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
JAN      2252 Unch   
MAR     2222 – 15                                              MAR   149.55 – 1.60
MAY     2236 – 14                                              MAY   152.00 – 1.70
JUL      2244 – 13                                              JUL     154.35 – 1.70
SEP      2249 – 12                                              SEP    156.55 – 1.75
NOV     2249 – 14                                              DEC    159.60 – 1.80
JAN      2248 – 14                                              MAR   162.45 – 1.85
MAR     2247 – 13                                              MAY   164.15 – 1.80
MAY     2249 – 13                                              JUL    165.70 – 1.80
JUL      2259 – 13                                              SEP    167.15 – 1.75

Coffee Market Report January 31 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 16.14% over the week of trade leading up to Tuesday 24th. January; to register a net long position of 25,741 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.98%, to register a net long position of 35,059 Lots on the day.
Over the same week, the Non-Commercial Speculative sector of this market increased their long position within the market by 34.45%, to register net long position of 25,281 Lots.   This net long position which is the equivalent of 7,167,051 bags has most likely been further increased, following the period of mixed but overall more positive trade which 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 1.81% during the week of trade leading up to Tuesday 24th. January; to register a record high net long position of 47,058 Lots.  This net long position which is the equivalent of 7,843,000 bags has most likely been increased further, following the period of mixed but overall more positive trade that has since followed.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 51.64 usc/Lb., while this equates to 33.59% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 3,340 bags yesterday; to register these stocks at 1,291,366 bags.  The certified stocks reported an increase of 4,818 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 42,166 bags.
The commodity markets had a mixed day yesterday, as the energy markets posted another negative day as while the U.S. Dollar lost ground against other major currencies on the day and the traditional safe haven Gold markets posted a positive day.  The U.S. Federal Reserve meetings begin today with announcements following the meetings anticipated tomorrow.  Apart from the precious metals; Gold, Silver, Platinum, Palladium and Orange Juice, the rest of the board finished on a negative note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.66% lower, to see this Index registered at 427.78.   The day starts with the U.S. Dollar near to steady and trading at 1.251 to Sterling and 1.07 to the Euro, while North Sea Oil is softer in early trade and is selling at $ 54.40 per barrel.
 
The London and New York markets started the day yesterday on a softer note in both markets, which continued into the early afternoon session.  There was a relatively low volume of trade in London as the main robusta producer markets remained closed for Tet New Year celebrations in Vietnam and the lack of producer sellers seemingly assisting this market to recovery lost ground toward the latter half of the day although moves toward positive were met with sellers waiting at the top of the day to cap the day.  This market set the close, hardly changed on the day. The New York market reflected a degree of volatility brought about by the news of better rain dispersion across the arabica growing areas in Brazil, while macro influence upon the market of the weaker U.S. Dollar assisted perhaps, to set the floor and a recovery toward the latter half of the session but still in negative territory, near to the middle of the day’s trading range in this market, to set the close yesterday, hardly changed in London but on a steady note, and a steady to softer note in New York, as follows:
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
JAN      2252 – 1   
MAR     2237 – 1                                                MAR   151.15 – 1.25
MAY     2250 Unch                                            MAY   153.70 – 1.20
JUL      2257 + 1                                                JUL     156.05 – 1.15
SEP      2261 + 1                                                SEP    158.30 – 1.15
NOV     2263 + 2                                                DEC    161.40 – 1.15
JAN      2262 + 3                                                MAR   164.30 – 1.15
MAR     2260 + 2                                                MAY   165.95 – 1.15
MAY     2262 + 2                                                JUL    167.50 – 1.10
JUL      2272 + 2                                                SEP    168.90 – 1.20

Coffee Market Report January 30 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 34.45% during the week of trade leading up to Tuesday 24th January; to register a net long position of 25,281 Lots on the day.  This net long position which is the equivalent of 7,167,051 bags has most likely been further increased, following the period of mixed but overall more positive trade, which has since followed.
The Uganda Coffee Development Authority UCDA have reported that the countries robusta coffee exports for the month of December were 82,022 bags or 23.95% higher than the same month last year, at a total of 424,440 bags, the increase in output is attributed to favourable weather during crop development and harvesting  .  This contributed to the countries cumulative coffee exports for the first three months of the new October 2016 to September 2017 coffee year to being 227,074 bags higher than the same period in the previous coffee year, at a total of 1,041,622 bags.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 52.84 usc/Lb., while this equates to 34.11% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 649 bags on Friday; to register these stocks at 1,288,026 bags.  The certified stocks reported an increase of 1,004 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,348 bags.
It was another mixed day for the commodity markets on Friday, as the US Dollar registered positive gains against a basket of other major currencies.  This while the oil markets influenced by market data suggesting increased drilling activity in the U.S.A., faltered on the day.  It was a generally firmer day for Coffee, Cotton, Copper, Orange Juice, Silver, Platinum and Palladium, whereas a softer day for Cocoa, Sugar, Corn, Wheat, Soybean and Gold markets.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1865% higher, to see this Index registered at 430.63.   The day starts with the U.S. Dollar near to steady and trading at 1.256 to Sterling and 1.072 to the Euro, while North Sea Oil is softer in early trade and is selling at $ 54.64 per barrel.
 
The London and New York markets started the day in mildly positive territory in London on Friday and a softer note in New York.  The absence of producer sellers in London with Vietnam celebrating Tet New Year, continued to provide a degree of support to this market which although in a narrow range for much of the morning session, remained in positive territory.  Following the negative start to the day in New York, this market managed a recovery to unchanged by mid morning and the rest of the day in both markets spent in choppy positive territory.  The volume of trade in London fairly modest, to see this market finish the day near to the days high.  The New York market had a fair volume day while the latter session held within a tight range, this market gave back some of the gains toward the end of the day, to finish in positive territory but off the day’s high, to set the close on Friday, as follows:
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
JAN      2253 + 31   
MAR     2238 + 28                                               MAR   152.40 + 0.95
MAY     2250 + 27                                               MAY   154.90 + 0.95
JUL      2256 + 26                                                JUL    157.20 + 0.90
SEP      2260 + 28                                               SEP    159.45 + 0.90
NOV     2261 + 29                                                DEC   162.55 + 0.95
JAN      2259 + 29                                               MAR   165.45 + 0.95
MAR     2258 + 29                                               MAY   167.10 + 1.00
MAY     2260 + 29                                               JUL    168.60 + 0.95
JUL      2270 + 29                                               SEP    170.10 + 0.90

Coffee Market Report January 27 2017

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 53.11 usc/Lb., while this equates to a 34.50% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 1,514 bags yesterday; to register these stocks at 1,288,675 bags.  The certified stocks reported a further 2,577 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36.344 bags.
The commodity markets were mixed in trade yesterday, the leading oil markets took a positive turn while the U.S. Dollar gained strength over the day, most other commodities on the index taking a softer track for the day.   Apart form the oil markets it was a mildly positive day for Cotton and Sugar, with the rest of the board finishing the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.44% lower, to see this Index registered at 429.83.   The day starts with the U.S. Dollar near to steady and trading at 1.255 to Sterling and 1.067 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 55.77 per barrel.
 
The London and New York markets started the day incrementally positive in London and slightly softer in New York yesterday.  It was a relatively modest volume and muted day in London with Vietnam entering Tet New Year celebrations and this market held either side of unchanged throughout the morning.  Following a firmer start to the day, the New York arabica market lost ground as the fundamentals provided little fresh news to the speculative sector and the macro influence of the firmer U.S. Dollar leant in to apply seller pressure across the commodities sector.  The latter day performance in both markets was for a steadier day, although in negative territory and a close in London just off of the days low in that market, and in New York around the middle of the days trading range, to set the close on a softer note after a fair volume day in both markets, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
JAN      2222 – 21   
MAR     2210 – 21                                               MAR   151.45 – 1.45
MAY     2223 – 21                                               MAY   153.95 – 1.40
JUL      2230 – 20                                                JUL    156.30 – 1.35
SEP      2232 – 22                                               SEP    157.55 – 1.30
NOV     2232 – 22                                                DEC   161.60 – 1.25
JAN      2230 – 22                                               MAR   164.50 – 1.20
MAR     2229 – 22                                               MAY   166.10 – 1.20
MAY     2231 – 22                                               JUL    167.65 – 1.20
JUL      2241 – 22                                               SEP    169.20 – 1.10

Coffee Market Report January 26 2017

The Tet New Year holidays are starting to take effect and have already closed down commercial activity within Vietnam, where concentration is now upon the celebrations of the start of the Year of the Rooster.   This is likely to limit the levels of producer price fixation selling volumes above the London market and leave the rudder of this market, very much in the hands of the funds and the speculative sectors of the market through to the second half of next week. 

The question is will this with the fundamental of longer term tightening overall global robusta coffee supply tend to uncap the London market as while one would think that post Tet holiday lacklustre Vietnam selling would do so, but with the Fund and Speculative sectors of the market holding record net long positions as at Tuesday last week, this may not be the case.    Thus, one might think that for the short term and until there is more clarity as to the direction in terms of selling activity that the internal market in Vietnam shall take post the Tet holidays, that the London market might tend to track the fortunes of the volatile and higher volume New York arabica coffee market. 

Presently aside from some concerns over the prospects for the next Brazil arabica coffee crop in terms of the many suggestions that biennial bearing following last year’s bumper crop, there have not yet been any striking weather related threats to global arabica coffee production for the year.  However, with many forecasts from within Brazil indicating something in excess of a 5 million bags dip in Brazil arabica coffee production this year and with the prospects for little in the way of carryover stocks from the last crop, it does partially assist to buoy speculative spirits within the New York market.  

The issue of the carryover arabica coffee stocks or the potential lack of them ahead of the start of the delivery of the new Brazil arabica coffee crop in five months’ time, is not only related to the modest stock levels that were carried into the last year’s crop, but also to the modest nature of last year’s deficit Brazil conilon robusta coffee crop.   This has increased domestic market demand for Brazil arabica coffees and somewhat eradicated the small surplus supply of Brazil arabica coffees for the export markets, while with the reports of the hot and dry conditions within the leading conilon robusta state of Espirito Santo and forecasts for another dismal conilon crop this year, the increased internal market demand for Brazil arabica coffees is likely to continue through to the middle of 2018.  

One might suggest therefore, that if what many might still suggest to be pessimistic forecasts for the forthcoming new Brazil arabica coffee crop are even partially correct, that with a continued increased internal market demand for arabica coffees, that it might tip the new arabica coffee crop from being just enough to something of a modest deficit crop.   Perhaps good reason to see some logic, for the extensive net long positions that the funds and speculative sectors are holding within the New York arabica coffee market. 

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 53.56 usc/Lb., while this equates to a 34.48% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 8,849 bags yesterday; to register these stocks at 1,290,189 bags.  There was meanwhile a smaller in number 6,435 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,921 bags. 

The commodity markets were mixed in trade yesterday, but with many markets tending to soften and to see the overall macro commodity index taking a softer track for the day.   The Natural Gas, Coffee, Cotton, Orange Juice and Corn markets nevertheless had a day of modest buoyancy, while the Oil, Sugar, Cocoa, Copper, Wheat 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 0.22% lower, to see this Index registered at 431.75.   The day starts with the U.S. dollar near to steady and trading at 1.265 to Sterling and 1.075 to the Euro, while North Sea Oil is showing modest buoyancy and is selling at $ 54.45 per barrel. 

The London and New York markets started the day yesterday on a softer note and with both markets maintaining a soft stance, into the early afternoon trade.   However, as the afternoon progressed and with some degree of confidence returning to the New York market with the ability of the market to limit its earlier losses of the day there was a renewed confidence that the market moved back into positive territory, with the London market following suit.    Both markets made significant gains and with the New York market at one stage posting gains of 3.25 usc/Lb. for the day, while the London market was up by $ 39.00 per metric ton, but late in the day the markets started to falter and to limit the gains for the London market while the New York market continued post the London close on a downside track.   The London market ended the day on a positive note and with 48.7% of the earlier gains of the day intact, while the New York market ended the day on a nervously very modest positive note and with only 16.9% of the earlier gains of the day intact.   The uncertain nature of the close in the New York market during late trade yesterday might not assist to buoy confidence and one might expect to see only 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. 

JAN      2243 + 16   

MAR     2231 + 19                                               MAR   152.90 + 0.55

MAY     2244 + 22                                               MAY   155.35 + 0.55

JUL      2250 + 21                                                JUL    157.65 + 0.55

SEP      2254 + 22                                               SEP    159.85 + 0.50

NOV     2254 + 22                                                DEC   162.85 + 0.45

JAN      2252 + 22                                               MAR   165.70 + 0.40

MAR     2251 + 22                                               MAY   167.30 + 0.40

MAY     2253 + 22                                               JUL    168.85 + 0.45

JUL      2263 + 22                                               SEP    170.30 + 0.35


Coffee Market Report January 25 2017

The new arabica coffee crop harvest in India is peaking, but reports from India indicate that there is strong price resistance being shown by many farmers, which is slowing the delivery of new crop coffees to the countries exporters for present.   This is related to the view being taken by many farmers that there is reason to believe in medium term international coffee market buoyancy, which will assist to add value to their new crop coffees. 

Meanwhile the new robusta coffee crop harvest in India is only just starting and one can anticipate that following the completion of what is generally regarded to have been a smaller new Vietnam crop and with carryover stocks into this crop more modest that the year before, that the Indian robusta coffee farmers shall likewise show some degree of price resistance.  To contribute to a slow start to the overall Indian new crop coffee export season. 

With the new crop harvest in progress and while so far there have been no scare stories emanating from Honduras and Guatemala who dominate production from the fine washed arabica coffee producer group of Mexico and Central America and with both countries anticipating larger new crops, there are continued reports from the smaller producers Nicaragua and Costa Rica of the weather related damage to the potential of the earlier to be harvested new crop coffees from the lower grown regions of these countries.    This related to the unseasonal rains late last year, which resulted in some degree of ripe cherry drop.  

There are however no official quantifiable numbers on this potential damage being forwarded and while some reports indicate that this problem might contribute to as much as a 10% dip in the overall potential of these relatively small regional crops, there has so far not been much of a market reaction.   The lack of excitement in terms of the export trade of the new crop coffees from Central America early this year, being more related to the combination of internal market price resistance within some of the countries as against a complacent and lacklustre demand from the consumer markets.  The consumer market roasters able to take advantage of steady deliveries of readily available Colombian fine washed arabica coffees, to fulfil the greater portion of their short-term requirements for fine washed arabica coffees. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 52.02 usc/Lb., while this equates to a 34.14% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 2,105 bags yesterday; to register these stocks at 1,298,678 bags.  There was meanwhile a larger in number 16,599 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,356 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 48,833 bags or 2.01% during the week of trade leading up to Monday 23rd. January, to see these stocks registered at 2,478,833 bags on the day. 

The commodity markets were mixed in trade yesterday, with the energy sector of the markets posting a positive day and assisting to buoy the fortunes of the overall macro commodity index.   The Oil, Natural Gas, Cocoa, Copper and Orange Juice markets had a day of buoyancy, while the Sugar, Coffee, Cotton, 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 0.23% higher, to see this Index registered at 432.69.   The day starts with the U.S. dollar showing some degree of buoyancy and trading at 1.251 to Sterling and 1.073 to the Euro, while North Sea Oil is steady and is selling at $ 54.25 per barrel. 

The London and New York markets started the day yesterday on a steady note, but while the New York market recovered back to par for the early afternoon trade, the London market remained under pressure to continue sideways within negative territory.   As the afternoon progressed the New York market started to add value, while the London market remained within negative territory but with profit taking selling starting to impact for the vibrant New York market it started to head south and with sell stops coming into play, to accentuate the losses and with the London market heading further south.   The New York continued on a downside track for late trade and likewise the London market, to see the markets end the day on an overall soft note.  The London market ended the day on a very soft note and with 90% of the earlier losses of the day intact, 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 and while it has not destroyed the positive nature of the charts is however likely to contribute to some degree of hesitant caution and perhaps a follow through softer start for early trade today against the prices set yesterday, as follows: 

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

JAN      2227 – 34   

MAR     2212 – 36                                               MAR   152.25 – 3.05

MAY     2222 – 31                                               MAY   154.80 – 3.00

JUL      2229 – 31                                                JUL    157.10 – 3.00

SEP      2232 – 32                                               SEP    159.35 – 2.95

NOV     2232 – 32                                                DEC   162.40 – 2.85

JAN      2230 – 34                                               MAR   165.30 – 2.80

MAR     2229 – 31                                               MAY   166.90 – 2.75

MAY     2231 – 31                                               JUL    168.40 – 2.80

JUL      2241 – 31                                               SEP    169.95 – 2.70


Coffee Market Report January 24 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 63.38% over the week of trade leading up to Tuesday 17th. January; to register a net long position of 22,163 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.56%, to register a net long position of 34,718 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their long position within the market by 70.35%, to register net long position of 18,802 Lots.   This net long position which is the equivalent of 5,330,284 bags has most likely been further increased, following the period of mixed but overall more positive trade which 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 18.11% during the week of trade leading up to Tuesday 17th. January; to register a record high net long position of 46,220 Lots.  This net long position which is the equivalent of 7,703,333 bags has most likely been increased further, following the period of mixed but overall more positive trade that has since followed. 

The week-long Tet New Year holidays to celebrate the Year of Rooster are now only a couple of days to the fore in Vietnam which with the traditional pre-holiday selling of new crop coffees on the part of the farmers to finance their celebrations is seemingly continuing to cap the related London market, while the lacklustre consumer industry buying activity this week, is contributing to the lack of excitement within this market.  

On the other hand, the concerns over the prospects for the new Brazil crop later in the year, is assisting to buoy speculative spirits and the fortunes of the New York market.   One might comment though that while there is reality to the fundamental of medium term tightening supply of robusta coffee and likewise for buoyancy within the London market on the medium term, one might still question the reality the many internal market reports within Brazil, which are pointing to the possible 10% to 12% dip in the prospects of the new Brazil arabica coffee crop. 

This would make one think that perhaps the New York market that has been steadily rising and despite managing this with relatively modest volumes of trade and with the funds and speculative sectors of this market once again holding significant net long positions, might soon suffer from a degree of exhaustion.  Thinking that if this market should start to falter, that it would attract the negative influences of catch up new crop Central American producer price fixation selling activity.  

The March to March contracts arbitrage between the London and New York markets broadened on Friday, to register this at 53.43 usc/Lb., while this equates to a 34.38% price discount for the London robusta coffee market.  This relatively narrow arbitrage is now becoming less of an attractive factor for the 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 6,696 bags yesterday; to register these stocks at 1,296,573 bags.  There was meanwhile a smaller in number 496 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,757 bags. 

The commodity markets were mixed in trade yesterday, but with the softer nature of the U.S. dollar having something of an influence in selected markets to see the overall macro commodity index maintaining a positive stance for the day.   The Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Wheat, Gold and Silver markets had a day of buoyancy, while the Oil, London robusta Coffee, 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 0.44% higher, to see this Index registered at 431.71.   The day starts with the U.S. dollar tending a little softer and trading at 1.250 to Sterling and 1.075 to the Euro, while North Sea Oil is showing some degree of buoyancy and is selling at $ 54.85 per barrel. 

The London and New York markets started the day yesterday on a steady note, but with the New York market soon attracting support, while the London market struggled to remain close to par.   The New York market continued to take a positive upside track in the early afternoon trade, but with the London market lacking industry support slipped further into negative territory.    The London market did however bounce back off the lows and headed to close to par before falling back towards the close, while the New York market shed some of its impressive gains in late trade.   The London market ended the day on a soft note and with 54.2% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 62% of the earlier gains of the day intact.    This mixed close and with producers and industry presently side-lined from the main activity in both markets might contribute to some degree of uncertainty and a degree of caution and therefore, perhaps 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. 

JAN      2261 – 13   

MAR     2248 – 13                                               MAR   155.40 + 2.20

MAY     2253 – 9                                                 MAY   157.80 + 2.20

JUL      2260 – 4                                                  JUL    160.10 + 2.20

SEP      2264 – 2                                                 SEP    162.30 + 2.20

NOV     2264 – 2                                                  DEC   165.25 + 2.20

JAN      2264 – 2                                                 MAR   168.10 + 2.25

MAR     2260 – 2                                                 MAY   169.65 + 2.20

MAY     2262 – 2                                                 JUL    171.20 + 2.20

JUL      2272 – 2                                                 SEP    172.65 + 2.15


Coffee Market Report January 23 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 70.35% during the week of trade leading up to Tuesday 17th. January; to register a net long position of 18,802 Lots on the day.  This net long position which is the equivalent of 5,330,284 bags has most likely been further increased, following the period of mixed but overall more positive trade, which has since followed. 

The rains have largely been good in Colombia over the past year and are supportive for the maintenance of ground water retention levels on most of the coffee farms, but there are some concerns that with the trees so healthy that in many districts it will have been limiting stress and by nature, resulting in relatively modest flowering towards the next new main crop that starts in October this year.   It is noted though, that so far these concerns have not been voiced by the Colombian Coffee Federation and for the present, no fears of Colombia not being able to maintain medium term production at around 14.5 million bags per annum. 

The same scenario has been reported by farmers in Costa Rica and Nicaragua to the north of Colombia, were rather than being negative to stress and the flowerings for the next crop as is it still too early for this region, the good volumes of rain over the past couple of months have proven to have been disruptive to the new crop harvest.   There have likewise been hints towards early cherry drop and drying problems from both countries, but nothing quantifiable in terms of what impact it might have had upon the prospects of their new crop that is presently being harvested.   

Thus, for the present and following last year’s good arabica coffee crop in Brazil and with rising overall arabica coffee supply forecasted for Colombia, the Central American producer bloc and Peru later this year, there are no significant fears over the prospects for short to medium term arabica coffee supply.   But despite the lack of such supportive fundamental news for the New York arabica coffee market, this market is once again showing a good degree of buoyancy. 

However, with the latest news of the rising net long positions held within this market by the funds and the speculative sectors of the market and with little in the way of fundamental justification for a strong rally, one might think that the market is once again becoming over bought and might soon hid something of a ceiling and with increased catch up producer price fixation selling activity, start to falter.   But with the unpredictable funds and today’s weakening U.S. dollar that is supportive for the market, nothing is certain and it is likely to be an interesting start to this week’s trade.  

The March to March contracts arbitrage between the London and New York markets broadened on Friday, to register this at 50.64 usc/Lb., while this equates to a 33.05% price discount for the London robusta coffee market.  This narrowing arbitrage is now becoming less of an attractive factor for the 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 918 bags on Friday; to register these stocks at 1,289,877 bags.  There was meanwhile a larger in number 2,889 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,261 bags. 

The commodity markets were mixed but with most moving to the positive side of par on Friday, to see the overall macro commodity index taking a positive track for the day.  The Oil, New York arabica Coffee, Cotton, Copper, Wheat, Corn, Gold and Silver markets had a positive day’s trade and the Sugar and London robusta Coffee markets ended the day on steady note, while the Natural Gas, Cocoa, 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 0.18% higher, to see this Index registered at 429.79.   The day starts with the U.S. dollar tending a little softer and trading at 1.244 to Sterling and 1.075 to the Euro, while North Sea Oil is tending softer and is selling at $ 54.95 per barrel. 

The London and New York markets started the day yesterday on Friday on a steady note, but with the New York market soon attracting support and to see the London market taking a steady track and the New York market a modestly positive track, into early afternoon trade.   As the afternoon progressed and with the New York market continuing on an erratic upside track, the London market remained under modest pressure and dipped back below par but to recover the losses late in the day and to end the day on a steady note, while the New York market ended the day on something of a high, albeit with relatively thin volumes of trade, not really a strong indicator for the market.   The London market ended unchanged for the day and the New York market ended the day on a very positive note, with 94.2% of the earlier gains of the day intact.   This close is somewhat positive for sentiment as are the charts supportive, but one might expect to see something of a cautiously hesitant start for early trade today and perhaps little better than a near to steady start for the volatile New York market against the prices set on Friday, as follows: 

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

JAN      2274 + 3  

MAR     2261 unch                                             MAR   153.20 + 2.45

MAY     2262 + 1                                                 MAY   155.60 + 2.45

JUL      2264 unch                                              JUL    157.90 + 2.45

SEP      2266 unch                                             SEP    160.10 + 2.45

NOV     2266 unch                                              DEC   163.05 + 2.35

JAN      2266 + 3                                                 MAR   165.85 + 2.30

MAR     2262 + 3                                                 MAY   167.45 + 2.30

MAY     2264 + 3                                                 JUL    169.00 + 2.30

JUL      2274 + 3                                                 SEP    170.50 + 2.30


Coffee Market Report January 20 2017

The Colombian Coffee Federation in an interview yesterday, are forecasting a twenty-year high coffee production of 14.5 million bags for this year, based on the prevailing favourable weather conditions and improved farm husbandry and inputs.  They do make the point though that there is more to be done in terms of yields and they are encouraging farmers to follow the lead of Brazil and Vietnam, to move towards increased usage of fertilizers and to increase yields per hectare. 

The Federation are also upbeat over the recent peace agreement that has been concluded with the Marxist rebels in the country that has opened up more land suitable for coffee growing and intend to encourage farmers in many of these districts were the conditions are suitable for coffee, to start planting coffee.   This they say along with improved inputs within the traditional coffee districts of Colombia, might see the countries annual crop and weather conditions permitting, to increase to close to 20 million bags per annum over the next few years. 

Brazil weather reports confirm that most of the country’s main arabica coffee districts have been in receipt of good rains for this month so far, but it has remained hot and dry over the leading conilon robusta districts in the state of Espiritu Santo.   However, the forecasts to point to the possibility of rains coming to Espiritu Santo next week but following a month of hot and dry conditions and with the new crop conilon robusta coffee cherries maturing and despite many farms utilising supplementary irrigation, it is perhaps all too late to support a crop that would be much better than last year’s dismal conilon crop.  

With now only a week to go ahead of the close down in Vietnam for the week-long Tet New Year holidays that shall bring in the Year of the Rooster, the farmers in Vietnam with the support of the buoyant reference prices of London market, are reported to be in receipt of price levels for their robusta coffee that are the best since 2011.   This shall make for good celebrations over the Tet holidays but with good profits in hand from the present sales of their new crop coffees and with good volumes already sold to the internal trade and the exporters, some encouragement to continue to show some degree of price resistance for new sales.   

Thus, the news so far and perhaps with the exception of the conilon farming community in Brazil, it remains happy days for coffee farmers in Brazil, Vietnam and Colombia who presently contribute to between 60% to 65% of global coffee supply, depending on the year by year crop variances for the former two.  This year’s factor and following a smaller Vietnam crop and a marginally lower Brazil crop, to be closer to the 60% factor but still a dominant share, which with their contributions to all of the quality sectors of the consumer market requirements, keeps consumer buying well focused on these coffees that dominate the majority of consumer market blends.   

The March to March contracts arbitrage between the London and New York markets broadened yesterday, to register this at 48.19 usc/Lb., while this equates to a 31.97% price discount for the London robusta coffee market.  This narrowing arbitrage is now becoming less of an attractive factor for the 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 2,104 bags yesterday; to register these stocks at 1,288,959 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 31,150 bags. 

The commodity markets were mixed but generally remained soft in nature in trade yesterday, to see the overall macro commodity index taking a softer trade for the day.  The Oil, Natural Gas, Coffee, Cotton and Corn markets had a day of buoyancy, while the Sugar, Cocoa, Copper, Orange Juice, Wheat, 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 0.43% lower, to see this Index registered at 429.03.   The day starts with the U.S. dollar tending a little softer and trading at 1.235 to Sterling and 1.068 to the Euro, while North Sea Oil is steady and is selling at $ 53.30 per barrel. 

The London and New York markets started the day yesterday with modest buoyancy, but while the London market maintained its positive track into the early afternoon trade, the New York market slipped back to bounce around either side of par on a near to steady sideways track.   There was however late in the day support coming to both markets and with the London market maintaining its gains, while the New York market took a positive track into the close.   The London market ended the day on a positive note and with 76.2% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 68.9% of the earlier gains of the day intact.   This close and with the markets tending to firm later in the day and contributing to a positive picture for the charts is likely to inspire a follow through steady start for early trade today against the prices set yesterday, as follows: 

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

JAN      2271 + 11  

MAR     2261 + 16                                               MAR   150.75 + 1.55

MAY     2261 + 14                                               MAY   153.15 + 1.60

JUL      2264 + 13                                               JUL    155.45 + 1.55

SEP      2266 + 13                                              SEP     157.65 + 1.55

NOV     2266 + 15                                               DEC    160.70 + 1.55

JAN      2263 + 12                                               MAR   163.55 + 1.50

MAR     2259 + 9                                                 MAY   165.15 + 1.45

MAY     2261 + 9                                                 JUL    166.70 + 1.45

JUL      2271 + 9                                                 SEP    168.20 + 1.45


Coffee Market Report January 19 2017

The Ethiopian Coffee Tea and Development Authority are reported to have forecasted coffee exports for this year to be close to 4 million bags, which is well in excess of the many earlier private trade and industry forecasts that had been forecasting a number of closer to 3.5 million bags.    Time will tell but the report does little to impact upon market sentiment, where the prospects for surplus arabica coffee supply for this year is an already accepted factor. 

This surplus is however being countered by the accepted fundamental of the medium term tightening of robusta coffee supply and with this potential deficit supply, likely to increase buying interest in the lower quality arabica coffees.   A factor that shall reduce to perhaps even almost eliminate any chance for an overall surplus global coffee supply, which does perhaps contribute to some degree of confidence within the coffee markets for the present. 

With only just over a week to go before the start of the Tet New Year celebrations to bring in the Year of the Rooster and with profits from early sales good, there has not been significantly aggressive selling of new crop robusta coffees within the internal market in Vietnam.   While with the sophisticated nature of market news services within Vietnam and the awareness of the farmers of the potential for strong demand for their robusta coffees in the coming months, one might expect to see rising internal market price resistance to come into play post the Tet holidays. 

Slowing sales out of Vietnam would further assist to buoy confidence within the London robusta coffee market, which has already been reacting in a positive manner to the building weather threat for the forthcoming new Brazil conilon robusta coffee crop.   A crop that many are already forecasting to be another deficit crop which would create increased domestic market demand for replacement lower quality arabica coffees or if the regulations are lifted, in Brazil import demand for what is already tightening supply robusta coffees. 

The March to March contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 47.37 usc/Lb., while this equates to a 31.74% price discount for the London robusta coffee market.  This narrowing arbitrage is now becoming less of an attractive factor for the 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 1,475 bags yesterday; to register these stocks at 1,291,063 bags.  There was meanwhile a larger in number 2,640 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,010 bags. 

The commodity markets were mixed but generally took something of a back step yesterday and with the Oil markets taking the major knock for the day and contributing to the overall macro commodity index, taking a softer track for the day.   The Sugar, London robusta Coffee, Cotton, Corn, Soybean and Silver markets had a day of buoyancy, while the Oil, Natural Gas, Cocoa, New York arabica Coffee, Copper, Orange Juice, Wheat and Gold markets had a softer day’s trade.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.64% lower, to see this Index registered at 430.88.   The day starts with the U.S. dollar showing a degree of buoyancy and trading at 1.228 to Sterling and 1.064 to the Euro, while North Sea Oil is steady and is selling at $ 52.95 per barrel. 

The London and New York markets started the day yesterday on modestly softer note and with both markets taking a softer track, into the early afternoon trade.   As the afternoon progressed the New York market came under further pressure to extend the losses, while the London market continued on a sideways track modestly south of par.   The New York market did however late in the day bounce back from the lows and make something of late recovery, while the London market took a late upside track and move back into modest positive territory.  The London market ended the day on a positive note and with 58.3% of the earlier gains of the day intact, while the New York market ended the day on a softer note, but having recovered 77.8% of the earlier losses of the day.    This mixed close is likely to contribute towards cautious hesitation within the markets but perhaps, with the ability of the still technically positive New York market to largely shrug off the bout of negative pressure in yesterday’s trade it might assist to inspire a steady start for early trade today, against the prices set yesterday, as follows: 

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

JAN      2260 + 6  

MAR     2245 + 7                                                 MAR   149.20 – 0.70

MAY     2247 + 7                                                 MAY   151.55 – 0.75

JUL      2251 + 9                                                 JUL    153.90 – 0.70

SEP      2253 + 9                                                SEP     156.10 – 0.70

NOV     2251 + 7                                                 DEC    159.15 – 0.70

JAN      2251 + 7                                                 MAR   162.05 – 0.65

MAR     2250 + 7                                                 MAY   163.70 – 0.65

MAY     2252 + 7                                                 JUL    165.25 – 0.65

JUL      2262 + 7                                                 SEP    166.75 – 0.70


Coffee Market Report January 18 2017

The Brazils Official Crop Supply Agency CONAB and with the new crop cherries presently developing on the trees towards the new crop that starts to be harvested during the second quarter of this year, have forecasted that following last year’s crop of 51.37 million bags, that this year’s new coffee crop shall be between 43.65 to 47.51 million bags.   It has to be noted however that this traditionally conservative body is usually seen to be approximately 10% below reality and therefore, one might read into it that the forecast is indicating a new crop of close to 50 million bags. 

One might comment that with the consumer market demand for Brazil coffees and a healthy domestic consumption, that this report even when adjusted, is indicating a modest deficit supply to come with this new crop and over and above what would be foreseen to be only very modest carryover stocks into this crop.   Thus, a report which is presently supportive for the positive sentiment that is contributing to the prevailing coffee market buoyancy, albeit that there is often a degree of market scepticism towards the CONAB crop forecast reports.   

The Vietnam Customs Authorities have confirmed yesterday that the countries coffee exports for the 2016 were 32.8% higher than the previous year, at a total of 29.67 million bags, while the value of these coffee exports they say were 24.9% higher than the previous year, at a total of 3.34 billion U.S. dollars.   These exports were aside from a domestic coffee consumption that is seen to now be approximately 3 million bags per annum and would have by nature, significantly reduced the carryover stocks into the new crop that has just been completed. 

This said one would think that with the smaller new crop to fuel coffee exports for 2017 and on top of reduced carryover stocks into this new crop, the coffee export potential for this year might well be reduced to perhaps closer to 26 million bags.    Thus, and with the surge in 2016 having not been related to any significant rise in the terminal market stocks held against the London market and indicating that the aggressive exports were rather fuelling consumer market demand, that there are definitely prospects for tighter consumer market robusta coffee supply due for the coming months. 

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 57,657 bags or 0.93% during the month of December, to register these stocks at 6,256,140 bags at the end of the month.   These stocks do not of course 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. 

Therefore, if one is to consider the additional unreported stocks and look to end November stocks in North America of approximately 7.3 million bags, it would have equated to something in the order of 13 weeks of roasting activity.  This number remains a safe reserve, in terms of the steady flow of new crop arabica coffees from Brazil and Colombia that are already coming to the market and soon to be followed, by the new crop arabica coffees from Central America, along with the new crop robusta coffees from Vietnam.  

The March to March contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 48.01 usc/Lb., while this equates to a 32.16% price discount for the London robusta coffee market.  This narrowing arbitrage is now becoming less of an attractive factor for the 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 7,253 bags yesterday; to register these stocks at 1,292,538 bags.  There was meanwhile a smaller in number 1,467 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,650 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 18,833 bags or 0.78% over the week of trade leading up to Monday 16th. January, to see these stocks registered at 2,430,000 bags, on the day. 

The commodity markets post the long weekend for the U.S. markets and with a slightly softer U.S. dollar in play, had a day of buoyancy for most markets yesterday, to see the overall macro commodity index taking a positive track for the day.   The Oil, Sugar, Cocoa, Coffee, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Natural Gas, 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 0.33% higher, to see this Index registered at 433.67.   The day starts with the U.S. dollar steady and trading at 1.233 to Sterling and 1.068 to the Euro, while North Sea Oil is steady and is selling at $ 54.50 per barrel. 

The London and New York markets started the day yesterday on a near to steady note, but with the markets soon working their way back to par and taking a steady track into the early afternoon trade.  As the afternoon progressed both markets moved up into positive territory and with the fundamentally strong London market attracting buy stops to accentuate the gains, while the New York market set on a steadier but erratic upside track.   The London market did however falter and falling off its highs it attracted sell stops and took a downside track trough to the close and shedding most of the earlier gains on the way down, while the New York market took an erratic modest positive sideways track to the close.  The London market that had hit four and half year highs ended the day on a modestly positive note but with only 19.2% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 41.4% of the earlier gains of the day intact.  This close does nevertheless assist to maintain a positive picture for the charts, but with the markets having seen to have encountered a degree of exhaustion yesterday, one might expect to see an only a hesitant and perhaps near to steady start for early trade today against the prices set yesterday, as follows: 

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

JAN      2254 + 13  

MAR     2238 + 5                                                 MAR   149.90 + 0.60

MAY     2240 + 5                                                 MAY   152.30 + 0.60

JUL      2242 + 4                                                 JUL    154.60 + 0.60

SEP      2244 + 4                                                SEP     156.80 + 0.55

NOV     2244 + 4                                                 DEC    159.85 + 0.55

JAN      2244 + 4                                                 MAR   162.70 + 0.50

MAR     2243 + 4                                                 MAY   164.35 + 0.50

MAY     2245 + 4                                                 JUL    165.90 + 0.50

JUL      2255 + 4                                                 SEP    167.45 + 0.55