Market Reports

Coffee Market Report March 24 2017

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

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

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

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

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

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

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

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

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

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

MAR     2139 – 1

MAY     2163 – 1                                                 MAY   140.50 – 1.20

JUL      2184 – 1                                                  JUL    142.90 – 1.15

SEP      2195 unch                                             SEP    145.25 – 1.10

NOV     2199 unch                                              DEC   148.55 – 1.15

JAN      2192 unch                                             MAR   151.80 – 1.10

MAR     2192 unch                                             MAY   153.85 – 1.10

MAY     2195 unch                                              JUL    155.60 – 1.15

JUL      2197 unch                                              SEP    157.25 – 1.15

SEP      2205 – 4                                                  DEC   159.35 – 1.10

NOV     2200 unch                                              MAR   161.45 – 1.10


Coffee Market Report March 23 2017

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

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

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

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

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

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

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

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

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

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

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

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

MAR     2140 – 7

MAY     2164 – 7                                                 MAY   141.70 – 3.05

JUL      2185 – 6                                                  JUL    144.05 – 3.05

SEP      2195 – 6                                                 SEP    146.35 – 3.10

NOV     2199 – 6                                                  DEC   149.70 – 3.05

JAN      2192 – 6                                                 MAR   152.90 – 3.00

MAR     2192 – 5                                                 MAY   154.95 – 3.00

MAY     2195 – 4                                                  JUL    156.75 – 2.95

JUL      2205 – 4                                                  SEP    158.40 – 2.95

SEP      2209 – 4                                                  DEC   160.45 – 3.00


Coffee Market Report March 22 2017

Reports from the internal market in Vietnam are indicating that farm and internal trade stocks are diminishing and with reference that the stocks might be less than 30% of the last robusta crop, with expectations that internal market stocks shall be at a three-year low.   Such reports do not however take into account the Ho Chi Minh City trade stocks and while there is no doubt that robusta coffee supply in Vietnam following the smaller new crop that came in over October 2016 to January 2017, it is questionable that once there is more alternative supply coming to the fore from the new Indonesian and Indian crops, that this will be matter of great concern to the consumer market buyers of robusta coffees.  But is does remain a supportive factor for the fortunes of the related London market, for the medium term. 

In the meantime, there was a report in the Vietnam press yesterday that the temporary ban on Indian importation of Vietnam coffees has been lifted, but this has not been officially confirmed.   This if it is true, would allow for the Indian soluble coffee manufacturers to continue to import approximately 64,000 bags of Vietnam robusta coffees per month, which these industries have grown accustomed to over the past few years.   It is news however if it proves to be true, that is unlikely to be market supportive news as in terms of Vietnam robusta coffee exports, the volumes that go to India have always been factored in to the figures that related to estimated demand for Vietnam coffees.  

Physical coffee trade for the arabica coffees remains lacklustre and with the Brazil Real that is presently trading at 3.08 to the dollar assisting to slow sales, it is leaving the New York more in the hands of the speculative and fund sector for direction.   But in the meantime the more cash and carry nature of robusta coffee trade, results in there being more influence from this sector upon the range bound nature of the London market. 

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 46.28 usc/Lb., while this equates to 31.97% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 284 bags yesterday; to register these stocks at 1,341,948 bags.  There was meanwhile a larger in number 8,477 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,651 bags. 

The commodity markets encountered some degree of softening of the U.S. dollar yesterday and it assisted to buoy many markets, but with the negative fundamentals pressurising the influential Oil markets lower, the overall macro commodity index took a softer track for the day.   The Natural Gas, Cocoa, Orange Juice, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, Sugar, Coffee, Cotton, Copper, Wheat and Corn markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.03% lower, to see this Index registered at 422.60.  The day starts with the U.S. Dollar steady and trading at 1.248 to Sterling and at 1.080 to the Euro, while North Sea Oil is near to steady and is selling at $ 49.60 per barrel. 

The London market started the day yesterday on a steady note, while the New York market started the day marginally on the positive side of par and with the London market soon recovering and to see both markets taking a modest positive stance into the early afternoon trade.   As the afternoon progressed both markets attracted support and moved into positive territory but to falter and to slip back into negative territory, to take a negative track through to the close of the day’s trade.   The London market ended the day on a soft note and with 73.5% of the earlier losses of the day intact, while the New York market ended the day on a modestly softer note and having recovered 52.4% of the earlier losses of the day by the close.   This close in terms of the more speculative and volatile New York market might perhaps be seen to be more of a profit taking correction than a reversal of fortunes and while it does not assist to buoy confidence, one might expect to see a steady to perhaps even in terms of the London market buoyant start for early trade today, against the prices set yesterday, as follows: 

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

MAR     2147 – 27                                               MAR   143.50 – 0.50

MAY     2171 – 25                                               MAY   144.75 – 0.50

JUL      2191 – 23                                                JUL    147.10 – 0.50

SEP      2201 – 23                                               SEP    149.45 – 0.45

NOV     2205 – 22                                                DEC   152.75 – 0.40

JAN      2198 – 22                                               MAR   155.90 – 0.45

MAR     2197 – 22                                               MAY   157.95 – 0.45

MAY     2199 – 22                                                JUL    159.70 – 0.50

JUL      2201 – 22                                               SEP    161.35 – 0.45

SEP      2209 – 22                                               DEC   163.45 – 0.40


Coffee Market Report March 21 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 38.59% over the week of trade leading up to Tuesday 14th. March; to register a net long position of 5,392 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 3.39%, to register a net long position of 30,612 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 23.05%, to register net long position of 10,985 Lots.   This net long position which is the equivalent of 3,114,199 bags has most likely been increased again, following yesterday’s correction that followed a period of overall sideways 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 3.41% during the week of trade leading up to Tuesday 14th. March; to register a record net long position of 37,705 Lots.  This net long position which is the equivalent of 6,284,167 bags has most likely been marginally increased again, following the period of mixed but overall positive trade that has since followed. 

The evidence of the lower than expected fund and speculative exposure within the volatile New York market and in terms of the general perspective that a more modest Brazil arabica coffee crop this year shall tighten up the present small arabica coffee supply surplus, has seemingly inspired some degree of positive reaction in trade for the New York market yesterday.   While the relatively firm London market followed this correction in a more modest manner, with this latter market experiencing a more modest positive correction for the day.  

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 45.64 usc/Lb., while this equates to 31.42% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,140 bags yesterday; to register these stocks at 1,342,232 bags.  There was meanwhile a larger in number 2,467 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,128 bags. 

The commodity markets encountered a degree of stability for the U.S. Dollar yesterday which took some of the lustre out of some of the markets, but the overall macro commodity index did nevertheless have a modestly positive day.    The Natural Gas, Cocoa, Coffee, Orange Juice, Gold and Silver markets had a day of buoyancy, while the Oil, 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 0.28% higher, to see this Index registered at 422.74.  The day starts with the U.S. Dollar near to steady and trading at 1.235 to Sterling and at 1.076 to the Euro, while North Sea Oil is steady and is selling at $ 50.75 per barrel. 

The London market started the day yesterday on a near to steady note, while the New York market started the day marginally on the positive side of par and to see the markets maintain this mixed track either side of par, into the early afternoon trade.  As the afternoon progressed the New York market started to add some value and with the London market with only thin producer selling over the market moved back into modest positive territory.   The positive nature of trade within the New York market and with sentiment seemingly supported by the latest commitment of trader’s report for the market triggered buy stops and further gains but to soon hit a ceiling, while the London market added a little more value and with both market taking an erratic sideways track for the rest of the day’s trade.   The London market continued to end the day on a positive note and with 92.3% of the earlier gains of the day, while the New York market ended on a likewise positive note and with 94.1% of the earlier gains of the day intact.   This correction and the positive close is likely to paint a better technical picture for the markets and is likely to inspire some degree of confidence and could well 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     2174 + 14                                              MAR   144.00 + 3.20

MAY     2196 + 12                                               MAY   145.25 + 3.20

JUL      2214 + 11                                               JUL    147.60 + 3.25

SEP      2224 + 12                                              SEP    149.90 + 3.25

NOV     2227 + 13                                               DEC   153.15 + 3.25

JAN      2220 + 12                                               MAR   156.35 + 3.25

MAR     2219 + 12                                               MAY   158.40 + 3.25

MAY     2221 + 12                                               JUL    160.20 + 3.25

JUL      2223 + 12                                               SEP    161.80 + 3.20

SEP      2231 + 12                                               DEC   163.85 + 3.20


Coffee Market Report March 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 23.05% during the week of trade leading up to Tuesday 14th. March; to register a net long position of 10,985 Lots on the day.  This net long position which is the equivalent of 3,114,199 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall steady to buoyant trade, which has since followed. 

The temporary ban by India on the importation of six commodities from Vietnam and including coffee, will assist to free up approximately 64,000 bags of Vietnam coffee per month for alternative markets.   However, with these coffees being mostly imported to fuel soluble coffee factories in India which is related to the reexport of value added processed coffees and with these industries needing to fulfil their export commitments, on would expect that they shall just replace supply from alternative origins and that is shall have no marked impact upon the potentially tightening global robusta coffee supply.  

The coffee markets aside from the rising volume of speculation for a new El Nino phenomenon to come into play for the second half of this year, remain devoid of striking fundamental new items and continued to trade within the prevailing narrow trading range last week.   While the latest commitment of traders reports from the volatile New York market would tend to suggest that with little in the way of supportive news, the speculative sector of the market is more focused upon other more exciting commodities for the present. 

The May to May contracts arbitrage between the London and New York markets broadened on Friday, to register this at 42.99 usc/Lb., while this equates to 30.26% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,333 bags on Friday; to register these stocks at 1,341,092 bags.  There was meanwhile a larger in number 3,704 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,595 bags. 

It was a relatively steady day in the commodity markets on Friday and with the dollar a bit softer and the influential oil markets stabilizing, the overall macro commodity index had a day of buoyancy.   The Oil, Natural Gas, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Gold and Soybean markets had a day of buoyancy and the London robusta Coffee market was steady, while the Sugar, Cocoa and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.23% higher, to see this Index registered at 421.55.  The day starts with the U.S. Dollar close to steady and trading at 1.239 to Sterling and at 1.077 to the Euro, while North Sea Oil is tending softer and is selling at $ 50.20 per barrel. 

The London and New York markets started the day on Friday with a degree of buoyancy yesterday and with both markets taking a hesitant positive track into early afternoon trade, but as the afternoon progressed the London market came under some pressure and fell back into negative territory and with the New York market briefly following suit, but with the New York market mostly maintaining a modestly positive stance.   The London market did however manage to recover and to take a steady track for the end of the day, with the New York market and perhaps assisted by the positive influences of the macro commodity index, maintaining a positive stance for the day.  The London market ended the day on a very modest positive note and with only 14.3% of the modest gains of the day intact, while the New York market ended the day on a positive note and with 63.2% of the earlier gains of the day intact.  This close provides little in the way of direction, but with U.S. dollar tending softer and little in the way of selling aggression on the part of the producers for both markets, one might think that is shall set the markets for a hesitantly steady start for early trade today against the prices set on Friday, as follows: 

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

MAR     2160 unch                                             MAR   140.80 + 1.05

MAY     2184 + 1                                                 MAY   142.05 + 0.60

JUL      2203 + 1                                                 JUL    144.35 + 0.60

SEP      2212 unch                                             SEP    146.65 + 0.65

NOV     2214 – 2                                                 DEC    149.90 + 0.60

JAN      2208 – 1                                                 MAR   153.10 + 0.60

MAR     2207 – 1                                                 MAY   155.15 + 0.60

MAY     2209 unch                                              JUL    156.95 + 0.60

JUL      2211 unch                                              SEP    158.60 + 0.65

SEP      2219 unch                                              DEC   160.65 + 0.60


Coffee Market Report March 17 2017

There have been a number of reports from the internal trade in Vietnam that farm stocks from the October 2016 to January 2017 harvest are diminishing and with the next harvest of mainly robusta coffees only due to start in October, the internal market coffee supply is tightening.   This not unexpected scenario in terms of the smaller crop that Vietnam brought in, is expected to continue to buoy the fortunes of the related London robusta coffee market for the coming months and until the advent of the new Indonesian crop that shall only really start to impact in volume by May. 

The new Indonesian robusta coffee crop is however not expected to be accompanied by a good conilon robusta coffee crop from Brazil, where forecasts are for another deficit to perhaps as best matching internal market demand new conilon crop this year.  Therefore, and with the general view that global robusta coffee supply for the present October 2016 to September 2017 coffee year shall remain in deficit, one might foresee the London market showing medium term buoyancy. 

Meanwhile with the new Brazil arabica coffee crop developing and making cherry counts more accurate and despite overall good rains and weather conditions to support this crop over the past five months, there are numerous field trip reports that with biennial bearing factors contributing and following last year’s bumper Brazil arabica coffee crop, that this year’s new arabica coffee crop shall be at least 4 million bags lower than last year’s crop.   Many reports even indicating a larger dip in arabica coffee production, which is likely and with no indication of surging supply later in the year from the other main arabica coffee producers, to tighten up longer term arabica coffee supply. 

Presently the consumer markets would appear to have little to fear in terms of the potential for longer term tightening coffee supply, as the main stream markets in Europe, North America and Japan are holding significant coffee stocks.   However, with global coffee consumption on the back of producer internal markets and the new markets in Asia steadily rising and the present indications for little chance for any significant increase in global coffee supply, one might expect to see the consumer stocks starting to decline later in the year and to see this factor play a part in providing support for sentiment within both the New York and London markets.  

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 42.43 usc/Lb., while this equates to 29.99% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,198 bags yesterday; to register these stocks at 1,332,561 bags.  There was meanwhile a larger in number 7,004 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 38,299 bags. 

It was a mixed day in the commodity markets yesterday and with the post interest rate hike softening of the U.S. dollar assisting to buoy spirits within many markets, to see the overall macro commodity index maintaining a positive track for the day.    The Sugar, New York arabica Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets had a day of buoyancy and the Oil, London robusta Coffee and Wheat markets were steady for the day, while the Natural Gas, Cocoa and Orange Juice markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.35% higher, to see this Index registered at 420.60.  The day starts with the U.S. Dollar tending softer and trading at 1.237 to Sterling and at 1.078 to the Euro, while North Sea Oil is steady and is selling at $ 50.75 per barrel. 

The London and New York markets started the day with a degree of buoyancy yesterday and with both markets and with supportive sentiment coming from the positive nature of overall macro commodity index, adding weight in early afternoon trade.   The markets did however as the afternoon progressed and with commodities in general running out of steam start to come under pressure, to see the London and New York market drifting back to set only a modest positive close for the day.   The London market ended the day on a modestly positive to perhaps only steady close and with only 13.6% of the earlier gains of the day intact, while the New York market ended the day on a positive note, but with only 18.3% of the earlier gains of the day intact.   This close and with both markets having seemingly struggled to maintain upside direction for the day does little to inspire, but one might expect with the close being on the positive side of par that is shall assist to see the markets taking a hesitant steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2160 – 1                                                 MAR   139.75 + 0.55

MAY     2183 + 3                                                 MAY   141.45 + 0.55

JUL      2202 + 4                                                 JUL    143.75 + 0.55

SEP      2212 + 3                                                 SEP    145.00 + 0.50

NOV     2216 + 3                                                 DEC    149.30 + 0.50

JAN      2209 – 1                                                 MAR   152.50 + 0.40

MAR     2208 – 3                                                 MAY   154.55 + 0.35

MAY     2209 – 3                                                 JUL    156.35 + 0.25

JUL      2211 – 3                                                 SEP    157.95 + 0.25

SEP      2219 – 3                                                 DEC   160.05 + 0.15


Coffee Market Report March 16 2017

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 123,007 bags or 1.02% during the month of February, to register these stocks at 6,445,774 bags at the end of the month.   These stocks do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of 560,000 bags per week, would conservatively have been at least 1.1 million bags. If one is to consider the additional unreported stocks the end month stocks would equate to approximately 7.54 million bags, it would have equated to something in the order of at least 13 and a half weeks of roasting activity.  This number may be considered a very safe reserve, in combination with the steady flow of new crop arabica coffees from Brazil, Colombia and Central America coming to the market.
Brazils Official Crop Supply Agency CONAB have announced that it will organise an auction to facilitate local roasters and soluble coffee producers to bid locally for robusta coffees.  This in an effort to assist the local industry players to access robusta coffee and likely to delay the prospects of any possibility on the part of the industry to gain approval from government for alternative sources of robusta coffee to be permitted to be imported to the country, ahead of the new Brazil conillon robusta crop that is due to begin harvest in the next months.  The Agency regularly holds auctions of government held coffee stocks thus the structures are all in place for an auction of this nature and this robusta auction is scheduled to take place next week.
The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.02 usc/Lb., while this equates to 29.82% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 7,150 bags yesterday; to register these stocks at 1,332,561 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,295 bags.
The Certified Robusta coffee stocks held against the London market were seen to decline by 6,333 bags over the week of trade leading up to Monday 13th. March, to see these stocks registered at 2,728,833 bags, on the day.
It was a mixed day in the commodity markets yesterday, ahead of the U.S. Federal Reserve announcement to confirm the increase in interest rates yesterday by 0.25 basis points to a range of 0.75 to 1.00%, in line with general market expectations.  The U.S. Dollar had a mixed but softer day toward the close and the Oil markets posted a positive day.  It was a similarly positive finish for Sugar, Cotton, Copper, London robusta Coffee, Orange Juice, Wheat, Corn, a flat day for Gold, with a softer day posted for New York arabica Coffee, Cocoa, Soybean, Silver, Platinum and Palladium.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.55% lower, to see this Index registered at 419.14.  The day starts with the U.S. Dollar tending softer and trading at 1.226 to Sterling and at 1.072 to the Euro, while North Sea Oil is buoyant and selling at $ 51.11 per barrel.
 
The London and New York markets started the day with a degree of buoyancy yesterday, in what was to be a lower overall volume day.  The morning buoyancy in New York held within a narrow range while London robusta took a softer track leading into the afternoon in that market.  The latter reaction to the macro influence and the turning tide of the U.S. Dollar, provided a boost to the London robusta market toward the end of the day, to see this market clamber higher as the session drew to a close and finish on the day’s high in this market.  The New York market managed to retain levels around par toward the middle of the day and the session remained in a tight range which turned negative as the day drew to a close, and in relatively thin volume, sellers came in to quickly push the market lower met as quickly by underlying buyer cover activity, which was not enough to push the market back into positive territory.  Thus, a close in both markets after a muted session in low volumes, a positive close for London and a mildly negative finish on the day in New York, to set the close yesterday as follows:
LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.

MAR     2161 + 10                                               MAR   139.20 – 0.40
MAY     2180 + 11                                               MAY   140.90 – 0.35
JUL      2198 + 12                                               JUL    143.20 – 0.40
SEP      2209 + 13                                               SEP    145.50 – 0.35
NOV     2213 + 14                                               DEC    148.80 – 0.35
JAN      2210 + 11                                               MAR   152.10 – 0.30
MAR     2211 + 11                                               MAY   154.20 – 0.25
MAY     2212 + 11                                               JUL    156.10 – 0.15
JUL      2214 + 11                                               SEP    157.70 – 0.20
SEP      2222 + 11                                               DEC   159.90 – 0.20

Coffee Market Report March 15 2017

The European Coffee Federation have reported that the port ware house stocks held within the warehouses in the ports of Antwerp, Bremen, Hamburg, Genoa, Le Havre and Trieste increased by 16,600 bags or 0.7% during the month of December 2016, to see these stocks registered at 11,921,100 bags as at the end of the month.   

These stocks did not however include the coffee stocks held within Europe in transit bulk containers, unreported warehouses throughout Europe, as well as on site roaster industry inventory stocks and with the combination of Eastern and Western European consumption at approximately 1 million bags per week, this would most likely be an additional estimated 2.5 million bags. It would therefore appear that European coffee stocks for the end of December would have been sufficient to cater for a very safe number of around 14.5 weeks of roasting activity. 

Since the end of December there has been no indication that these stocks would have declined in any significant manner and might even with the advent of the good volumes of new crop coffees coming from Colombia, Central America and Vietnam, have risen a little.   This factor as is similarly the case within the U.S.A. were port warehouse stocks are anticipated to be seen to be relatively high when the U.S.A. Green Coffee association forwards their latest report later today, is contributing to the physical coffee market to be somewhat in the doldrums for the present.  

Lethargic consumer market roaster buying aside, the markets are devoid of any striking coffee fundamental news reports and remain somewhat directionless for the present, with fair weather reports from most of the main producer blocs and excluding only the relatively low volume East African countries, tending to supress any bulls within the markets.   In this respect, one might expect to see the markets taking a sideways track and within the present trading range, for the coming weeks.    

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.87 usc/Lb., while this equates to 30.35% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 333 bags yesterday; to register these stocks at 1,339,711 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,295 bags. 

The commodity markets lacked some players yesterday, with the severe snow storms that hit the north east of the U.S.A. and kept many away from the office, but with the markets having a mixed day and with the overall macro commodity index taking a softer track for the day.   The Cocoa, London robusta Coffee, Cotton, Copper, Orange Juice and Corn markets had a day of buoyancy and the Gold market was steady, while the Oil, Natural Gas, Sugar, Wheat, Soybean and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% lower, to see this Index registered at 416.82.  The day starts with the U.S. Dollar tending softer and trading at 1.221 to Sterling and at 1.062 to the Euro, while North Sea Oil is showing some degree of buoyance and is selling at $ 50.90 per barrel. 

The London and New York markets started the day with a degree of buoyancy yesterday and while the London market maintained its buoyancy into the early afternoon trade, the New York market struggled to remain on par and with frequent dips into modest negative territory.   As the afternoon progressed trade became erratic and directionless within both markets and with the London and New York markets trading either side of par for the rest of the day and with the London market tending stronger to head towards a positive close, while the New York market faltered and took a softer track towards the close.  The London market ended the day on a modestly positive note and with 33.3% of the gains of the day intact, while the New York market ended the day on a negative note and with 71% of the earlier losses of the day intact.   This close does little to inspire and is unlikely to support little better than a steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2151 + 5                                                MAR   139.60 – 0.90

MAY     2169 + 5                                                MAY    141.25 – 1.10

JUL      2186 + 5                                                 JUL    143.60 – 1.10

SEP      2196 + 5                                                SEP    145.85 – 1.10

NOV     2199 + 5                                                 DEC   149.15 – 1.10

JAN      2199 + 5                                                MAR   152.40 – 1.15

MAR     2200 + 5                                                MAY   154.45 – 1.20

MAY     2201 + 5                                                 JUL    156.25 – 1.15

JUL      2203 + 5                                                 SEP    157.90 – 1.15

SEP      2211 + 5                                                 DEC   160.10 – 1.15


Coffee Market Report March 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 39% over the week of trade leading up to Tuesday 7th. March; to register a net long position of 8,780 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.12%, to register a net long position of 31,798 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 22.39%, to register net long position of 14,276 Lots.   This net long position which is the equivalent of 4,047,183 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall more marginally 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 3.29% during the week of trade leading up to Tuesday 7th. March; to register a record net long position of 39,036 Lots.  This net long position which is the equivalent of 6,506,000 bags has most likely been little changed, following the period of mixed but overall sideways trade that has since followed. 

The evidence of the more modest long positions being held within the New York market might in terms of the fact that there is in reality only close to stable global coffee supply and ahead of what most forecast to be a smaller new Brazil crop this year, might well inspire some degree of support coming to the fore for the market.  It is however always difficult to predict the funds and there is no certainty that they might wish to go long into the market on the short term, but one might suspect that the New York market might presently be close to the bottom side of the short to medium term trading range and might well add some weight in the coming weeks. 

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 44.19 usc/Lb., while this equates to 31.04% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,030 bags yesterday; to register these stocks at 1,340,044 bags.  There were meanwhile a larger in number 3,995 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,295 bags. 

The commodity markets had a relatively steady day yesterday, to see the overall macro commodity index taking a modestly positive track for the day.    The Natural Gas, Cocoa, New York arabica Coffee, Copper, Orange Juice, Gold and Silver markets had a day of buoyancy and the Soybean market was steady, while the Oil, Sugar, London robusta Coffee, Cotton, Wheat and Corn markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.36% higher, to see this Index registered at 417.85.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.214 to Sterling and at 1.064 to the Euro, while North Sea Oil is steady and is selling at $ 50.00 per barrel. 

The London and New York markets started the day with a degree of buoyancy yesterday and taking a steady track into the early afternoon trade, but as the afternoon progressed both markets came under pressure and headed back into negative territory and to continue south with sell stops being triggered, to post significant losses for both markets.    But as the day progressed and with little in the way of producer selling pressure over the markets, there was a bounce back from the lows and with buy stops being triggered the London market made an almost complete recovery from the relatively dramatic losses, while the New York market moved back into modest positive territory.  The London market ended the day on a modestly negative note but having recovered 83.3% of the earlier losses of the day, while the New York market ended the day on a positive note and with 44.4% of the earlier gains of the day intact.    This close and with the ability of both markets to shrug off the negative pressure that had developed during the day might assist to inspire a degree of confidence and despite the negative influences of the renewed muscle of the U.S. dollar, one might expect to see as steady to perhaps even buoyant start for early trade today against the prices set yesterday, as follows: 

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

MAR     2146 – 7                                                MAR   140.50 + 0.85

MAY     2164 – 6                                                MAY    142.35 + 1.00

JUL      2181 – 5                                                 JUL    144.70 + 1.00

SEP      2191 – 4                                                SEP    146.95 + 0.95

NOV     2194 – 2                                                 DEC   150.25 + 0.95

JAN      2194 – 2                                                MAR   153.55 + 1.00

MAR     2195 – 2                                                MAY   155.65 + 1.00

MAY     2196 – 2                                                 JUL    157.40 + 1.05

JUL      2198 – 2                                                 SEP    159.05 + 1.05

SEP      2206 – 2                                                 DEC   161.25 + 1.00


Coffee Market Report March 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 22.39% during the week of trade leading up to Tuesday 7th. March; to register a net long position of 14,276 Lots on the day.  This net long position which is the equivalent of 4,047,183 bags has most likely been little changed to perhaps marginally decreased further, following the period of mixed but overall modestly negative trade, which has since followed. 

The annual coffee festival in Buon ma Thuot in the Central Highlands Dak Lak province of Vietnam has come to a close and with little in the way of striking news coming to the fore from this leading coffee province in Vietnam, other than the forecast from the Vietnam Coffee and Cocoa Association that despite the high volumes of coffee exports for the first couple of months of this year, that they foresee a 20% to 30% decline in Vietnam coffee export potential for the year.   This they say is related to the diminished carryover stocks into the recently completed October 2016 to January 2017 harvest, which they estimate to have been a significantly lower new crop.   

What was perhaps noticeable in terms of announcements during this festival, was the lack of scare stories in terms of the weather conditions towards the new harvest that is due to start in October this year.  Traditionally over the past few years there have been by March and despite the fact that the summer rain season is only due to start in April, there have been somewhat market manipulative forecasts for damaging dry weather for the coffee farms.   But this year so far, this has not been the case and by nature of the silence on the matter and with forecasts for rains due for the Central Highlands for the second half of this month and albeit early days, one might think that expectations are for a normal rain season this year and another large new coffee crop due for the end of the year.   

Thus, with the reports over the past few weeks of ample rains for the leading Brazil conilon robusta state of Espirito Santo and the normality of weather in Vietnam for the present, it would seem that while there is no doubt that there shall be a short to medium terms tightness in global robusta coffee supply, that the longer-term prospects are for increasing robusta coffee supply for the coming year.   But in the meantime, and with the early surge of robusta coffee exports from Vietnam having taken place, one can perhaps foresee these volumes starting to tail off by May and assisting by nature of less producer selling pressure over the market, to continue to buoy the prices of the relatively firm London robusta coffee market. 

The May to May contracts arbitrage between the London and New York markets broadened on Friday, to register this at 42.92 usc/Lb., while this equates to 30.36% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,200 bags on Friday; to register these stocks at 1,341,074 bags.  There were meanwhile a smaller in number 395 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,300 bags. 

The commodity markets remained under pressure earlier in the day on Friday but with the U.S. dollar coming off the boil later in the day and shedding a little weight, the losses were limited within many markets and the relatively soft overall macro commodity index was only marginally softer for the day.    The Natural Gas, Sugar, Cocoa, New York arabica Coffee, Copper and Orange Juice markets had a day of buoyancy, while the Oil, London robusta 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 0.06% lower, to see this Index registered at 416.36.  The day starts with the U.S. Dollar near to steady and trading at 1.218 to Sterling and at 1.069 to the Euro, while North Sea Oil is tending softer and is selling at $ 49.75 per barrel. 

The London market started the day on Friday on a near to steady note, while the New York market had a steady start for the day, with the London market remaining near to par and the New York market showing some modest buoyancy into the early afternoon trade.    As the day progressed both markets moved up into positive territory but with the London market faltering in late trade and dipping back into negative territory, while the New York market managed to sustain its positive stance and set the markets for a mixed close.   The London market ended the day on a soft note and with 70.6% of the losses of the day intact, while the New York market ended the day on a positive note and with 62.1% of the earlier gains of the day intact.    This close while on the positive side for the more volatile New York market does not in terms of the relatively thin volumes of trade provide much of an indicator for direction, but might perhaps assist to inspire 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     2153 – 4                                                MAR   139.65 + 0.90

MAY     2170 – 12                                              MAY    141.35 + 0.90

JUL      2186 – 11                                               JUL    143.70 + 0.90

SEP      2195 – 11                                              SEP    146.00 + 0.95

NOV     2196 – 11                                               DEC   149.30 + 1.00

JAN      2196 – 10                                              MAR   152.55 + 1.00

MAR     2197 – 10                                              MAY   154.65 + 1.05

MAY     2198 – 10                                               JUL    156.35 + 1.05

JUL      2200 – 9                                                 SEP    158.00 + 1.10

SEP      2208 – 9                                                 DEC   160.25 + 1.20


Coffee Market Report March 10 2017

The Brazil Coffee Exporters Association Cecafé has reported that the countries green coffee exports for the month of February were 390,000 bags or 14.89% lower than the same month last year, at a total of 2,600,000 bags.   This dip in exports was partially related to the over 80% dip in the exports of conilon robusta coffees for the month, but is being seen to have been more related to the tightening price resistance within the internal market by arabica coffee farmers for their declining past crop stocks.   

One might comment that strengthening price resistance within the internal market in Brazil might suggest that farmers believe in the earlier forecasts for a smaller new arabica coffee crop to be due to start being harvested in four months’ time, but there might also be some degree of speculation over the once again declining value of the Brazil real that is retarding sales of arabica coffee stocks.   The Real has dipped back to trade at present at 3.19 to the dollar and is along with most emerging market currencies coming under pressure and it is likely with now only relatively modest past crop stocks at hand, that farmers are looking towards the prospects of a weaker Real to assist to value add the sales of these stocks.  

Meanwhile in terms of the forthcoming new Brazil conilon robusta coffee crop that is due to start being harvested ahead of the new arabica coffee harvest, there are comments coming to the fore that the good February rains have been beneficial for the conilon farmers in the state of Espirito Santo the leading robusta coffee state and that this might add some volume to what has so far been forecasted to be another dismal crop for this year.   There are in this respect no clear figures being forecasted, but there are reports that talk the new conilon robusta coffee crop might be as much as 20% higher than last year’s crop, which would be assisted by what is foreseen to be good new crop from the state of Rondônia.  

One would comment that even if these latest forecasts for an improved conilon robusta coffee crop prove to be true it is only an improvement over what had been a dismal deficit crop last year and that it would really only assist to fuel the domestic coffee industry, that has been with the inability to import supplementary robusta coffee, blending in low grade arabica coffees to supplement their robusta coffee requirements.  This has been inflating the prices of Brazil soluble coffees and is a likely contributor to the fact that the exports of value added soluble coffees for the month of February were the equivalent of 65,000 bags or 20.77% lower than the same month last year at the equivalent of 248,000 bags, calculated in terms of their green coffee equivalent.  

The U.S. governments National Weather Service’s Climate Prediction Centre has reported that post the La Niña that the conditions within the Pacific Ocean are presently neutral, but the see a strong chance for a new El Niño phenomenon to start developing in the coming months.    This would if it were to occur start to lessen the rain for the Pacific rim coffee producers such as Colombia, Peru and Indonesia but unless it were to be a severe El Niño, it would be unlikely to be significantly threatening for these producers and one would think that it is too vague a possibility, to be market supportive.  

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.48 usc/Lb., while this equates to 29.53% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 92 bags yesterday; to register these stocks at 1,338,874 bags.  There were meanwhile a smaller in number 29 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,695 bags. 

The Certified Robusta coffee stocks held against the London market were seen to decline by 11,000 bags or 0.4% over the week of trade leading up to Monday 6th. March, to see these stocks registered at 2,735,167 bags, on the day. 

The commodity markets remained under pressure yesterday, to see the overall macro commodity index taking a softer track for the day.  The Natural Gas, Cotton and Orange Juice markets nevertheless had a day of buoyancy, while the Oil, Sugar, Cocoa, Coffee, 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 0.86% lower, to see this Index registered at 416.63.  The day starts with the U.S. Dollar steady and trading at 1.215 to Sterling and at 1.059 to the Euro, while North Sea Oil is steady and is selling at $ 51.25 per barrel. 

The London market started the day on par yesterday, while the New York market had a marginally lower start to the day before joining the London market to see both markets on par for early afternoon trade.   It was however a complicated day for the markets and not assisted by the negative influences of the softer macro commodity index and with both markets taking brief jumps over par but mostly remaining below par and ending with a marginally softer close for the London market, while the New York market started to trigger late in the day sell stops and take a more dramatic dip in value.   The London market ended the day on a softer note and with 53.8% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 81.2% of the earlier losses of the day intact.    This close does little to inspire and is likely to influence little better than a near to steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2157 – 6                                                MAR   138.75 – 1.30

MAY     2182 – 7                                                MAY    140.45 – 1.30

JUL      2197 – 8                                                 JUL    142.80 – 1.25

SEP      2206 – 9                                                SEP    145.05 – 1.25

NOV     2207 – 9                                                 DEC   148.30 – 1.25

JAN      2206 – 9                                                MAR   151.55 – 1.25

MAR     2207 – 10                                              MAY   153.60 – 1.15

MAY     2208 – 11                                               JUL    155.30 – 1.10

JUL      2209 – 11                                               SEP    156.90 – 1.05

SEP      2217 – 11                                               DEC   159.05 – 1.10


Coffee Market Report March 09 2017

The customs authorities in Vietnam have reported that the countries coffee exports of mostly robusta coffees for the month of February were registered at in excess of 2.43 million bags, which exceeded all forecasts for this short month and one that was interrupted by the week-long Tet New Year holiday.   This report is perhaps something of a surprise to many within the Vietnam coffee industry as prior to this report, the state authorities had been forecasting February coffee exports at 2.17 million bags and the trade had been forecasting export volumes for the month, which ranged between 1.83 million and 2.33 million bags. 

The prevailing good volumes of coffee exports from Vietnam that aside from exports has to cater for a domestic market demand that is steadily increasing and is estimated by some to be approximately 2.8 million bags per annum as against what has been seen to be a smaller new crop, is likely to see Vietnam robusta coffee export volumes start to tail off by May this year.   By this time thought there shall be the support of new crop robusta coffees coming to the fore from Indonesia, but if the forecasts prove to be correct, no real contribution from what is foreseen to be another dismal new Brazil conilon robusta coffee crop.   This scenario assisting to buoy confidence in the medium-term prospects for the related London robusta coffee market and evident, from the narrowing of the arbitrage between the London and New York markets. 

The Colombian Coffee Federation who have been promoting the replanting of aged coffee trees by their farmers over the past decade and with the evidence of the success of this program clearly illustrated by the steady increase in the countries coffee production over the past couple of years, has announced that the program shall have to continue if Colombia is to ensure that annual crops shall remain in excess of 14 million bags.   Indicating that the program should target the replacement of close to 10% of the country’s coffee trees with new disease resistant and higher yielding varieties per annum and therefore, to replant close to 90,000 hectares per annum. 

The recommendation by the Colombian Coffee Federation is related to the country presently having approximately 930,000 hectares of land under coffee, which would equate to average farm yields still only 970 Kgs. per hectare. One might suggest that with the potential that the average yield with additional planting of new trees and accompanied by good levels of farm inputs and good farm husbandry, can still be significantly increased over the coming years.   Thus, to perhaps see Colombia heading closer to the 20 million bags production levels per annum, which is a number that has previously been indicated as a probable longer term target. 

It is of course not only Colombia that has experienced the success of sponsored replanting programs that have encouraged and partially assisted farmers in terms of extension services support for farmers to replant old trees, as such programs have been in place within many countries but perhaps most notable would be the recent successes in terms of the increased yields in Vietnam and Honduras.    With these successes encouraging many other countries to follow suit and one would think that good examples would be the active farm support programs that are taking place in the East African countries and in Indonesia, which shall in time assist to buoy production and potentially assist to ensure that supply shall continue to match the steadily growing global consumption. 

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 42.46 usc/Lb., while this equates to 29.95% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,599 bags yesterday; to register these stocks at 1,338,966 bags.  There were meanwhile a larger in number 5,048 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,724 bags. 

The commodity markets continued to encounter a firming U.S. dollar yesterday that is supported by the anticipation of a nearby interest rate hike, to see the overall macro commodity index take a negative track for the day yesterday.   The Natural Gas, Coffee and Cotton markets nevertheless had a day of buoyancy and the Sugar market was steady, while the Oil, Cocoa, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.82% lower, to see this Index registered at 420.24.  The day starts with the U.S. Dollar showing follow through buoyancy and trading at 1.216 to Sterling and at 1.053 to the Euro, while North Sea Oil is steady and is selling at $ 51.70 per barrel. 

The London and New York markets started the day on a steady note, but with both markets coming under some early pressure in thin trade and taking a modestly softer track into the early afternoon trade.  The markets did however soon recover and with both markets soon moving back into modest positive territory and following another short reversal to once again recover and to take a positive track through to the end of the day’s trade.   The London market continued to end the day on a very positive note and with 95.2% of the gains of the day intact, while the New York market ended the day on a less certain positive note and with only 58.4% of the earlier gains of the day intact.   This positive close to the day is constructive for confidence within the markets but with the buoyancy related to what is relative thin trade it might not encourage little better than another hesitantly steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2163 + 20                                              MAR   140.05 + 1.05

MAY     2189 + 20                                              MAY    141.75 + 1.05

JUL      2205 + 17                                               JUL    144.05 + 1.05

SEP      2215 + 17                                              SEP    146.30 + 1.00

NOV     2216 + 15                                               DEC   149.55 + 1.00

JAN      2215 + 15                                              MAR   152.80 + 1.05

MAR     2217 + 15                                              MAY   154.75 + 1.05

MAY     2219 + 15                                               JUL    156.40 + 0.95

JUL      2220 + 14                                               SEP    157.95 + 0.95

SEP      2228 + 14                                               DEC   160.15 + 0.95


Coffee Market Report March 08 2017

The Colombian Coffee Federation have reported that the countries coffee production for the month of February was 197,000 bags or 17.97% higher than the same month last year, at a total of 1,293,000 bags.   This improved performance has contributed to the countries cumulative coffee production for the first five months of the present October 2016 to September 2017 coffee year to being 576,000 bags or 9% higher than the same period in the previous coffee year, at a total of 6,979,000 bags. 

In terms of coffee exports from Colombia the Coffee Federation have reported that the countries coffee exports for the month of February were 75,000 bags or 6.79% higher than the same month last year, at a total of 1,180,000 bags.   This contributes to the countries cumulative exports for the first five months of the present October 2016 to September 2017 coffee year to being 528,000 bags or 9.19% higher than the same period in the previous coffee year, at a total of 6,276,000 bags. 

These are impressive figures and it would appear that Colombia is well on target for the forecasted 15 million bags crop for the present coffee year, which is related to the recent years of an extensive replanting program of aged trees and along with improved farm husbandry and inputs.   However there have been reports of relatively excessive rains within many of the countries districts and with this having had some impact in terms of less stress on the trees and the resulting, less than perfect flowerings towards the next crops. 

So far nothing quantifiable has been forthcoming in terms of official figures and forecasts from Colombia, but these reports to indicate that perhaps the steady growth in Colombian coffee production might well taper off a close to present levels, for the short term.   However, with unforeseen weather problems aside and so far, there is no indication of a severe El Nino due for later in the year, one might expect and with more and more recently planted new coffee trees coming to maturity, to see Colombian production once again increasing during the second half of next year.   

The physical coffee markets are in somewhat with the doldrums for the present, with evidence of only relatively thin producer selling and consumer industry buying activity impacting upon the terminal markets, which remain within a relatively thin trading range for the present.   The question being which direction might they now take and this is perhaps very much in the hands of the unpredictable funds, albeit that fundamentally in terms of medium term tightening supply as against modestly rising demand, there would appear to be little reason to be bearish about the markets. 

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.32 usc/Lb., while this equates to 30.08% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,731 bags yesterday; to register these stocks at 1,342,565 bags.  There were meanwhile a smaller in number 2,010 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,772 bags. 

The commodity markets and working within an environment of renewed muscle for the U.S. Dollar were mostly softer for the day yesterday, to see the overall macro commodity index took a softer track for the day.    The Oil markets did nevertheless experience a degree of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.76% lower, to see this Index registered at 423.70.  The day starts with the U.S. Dollar near to steady and trading at 1.221 to Sterling and at 1.057 to the Euro, while North Sea Oil is tending softer and is selling at $ 54.15 per barrel. 

The London and New York markets started the day on a near to steady note and both markets were very much trading on par into the early afternoon trade, when the both markets came under pressure and lost a little weight.  As the afternoon progressed the New York market did however briefly bounce back into positive territory for a couple of times, but with no assistance from the negative nature of the overall commodity index that was in play, the New York market settled back to join the London market towards a softer close for the day.   The London market ended the day on a modestly softer note and with 50% of the losses of the day intact, while the New York market ended the day on a likewise modestly softer note and with 53.6% of the earlier losses of the day intact.    This close contributes towards a negative technical picture and does little to inspire confidence but one might think that with the fundamentals for the coffee markets actually not really bearish that there might be some cautious hesitancy to follow the charts south and therefore, the markets might be due for a hesitant and thinly traded steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2143 – 7                                                MAR   139.00 – 0.65

MAY     2169 – 7                                                MAY    140.70 – 0.75

JUL      2188 – 5                                                 JUL    143.00 – 0.75

SEP      2198 – 4                                                SEP    145.30 – 0.75

NOV     2201 – 5                                                 DEC   148.55 – 0.75

JAN      2200 – 9                                                MAR   151.75 – 0.70

MAR     2202 – 8                                                MAY   153.70 – 0.75

MAY     2204 – 6                                                 JUL    155.45 – 0.60

JUL      2206 – 6                                                 SEP    157.00 – 0.65

SEP      2214 – 6                                                 DEC   159.20 – 0.70


Coffee Market Report March 07 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 25.8% over the week of trade leading up to Tuesday 28th. February; to register a net long position of 14,393 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 5.17%, to register a net long position of 31,759 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 14.4%, to register net long position of 18,395 Lots.   This net long position which is the equivalent of 5,214,901 bags has most likely been little changed to perhaps even marginally decreased, 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 2.37% during the week of trade leading up to Tuesday 28th. February; to register a record net long position of 37,791 Lots.  This net long position which is the equivalent of 6,298,500 bags has most likely been marginally increased again, 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 42.75 usc/Lb., while this equates to 30.22% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

While coffee consumption within the dominant developed markets in North America, Western Europe and Japan is relatively static at present, the evidence is that the developing coffee markets in Asia are maintaining steady growth and with the relatively large population Indian, Indonesian, Vietnam and Philippine markets continuing to report rising domestic consumption figures.   The former three though are significant producers of coffee and mostly robusta coffees that suit the dominance of soluble coffee consumption within these markets, while the latter Philippines have long since become a net importer of coffee. 

This growth in consumption that is being matched by consumer market growth within the developing coffee markets in the Middle East and Turkey is assisting to what many foresee to be an approximate 2.5 million bags increase in global coffee demand annually, is in terms of the present flat increase in supply a supportive factor for the longer-term coffee market prices.  But it is a relatively slow and steady factor and while one might foresee tightening supply, the resulting improved prices and with adverse weather conditions aside, is likely to assist to encourage increased supply in the form of both new coffee planting and improved farm husbandry and yields within many traditional and underperforming producer countries in Asia and Africa. 

On the short term, however and if the forecasts for yet another dismal conilon robusta coffee crop for Brazil this year shall be accompanied by a biennially bearing lower Brazil arabica crop, while the coffee supply from Vietnam for the year is tighter following their just completed lower new crop, it would support the view for a more positive coffee market to develop over the coming months.  However, with still good volumes of new crop coffees from Vietnam, Central America and Colombia still coming to the market and with the funds seemingly cautious about or somewhat distracted from the coffee markets, they remain for the present within the present trading range which offers reasonable value in terms of the London robusta coffee market, but might be seen to be somewhat modest in value in terms of the New York arabica coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 275 bags yesterday; to register these stocks at 1,339,834 bags.  There were meanwhile a larger in number 4,030 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,762 bags. 

The commodity markets were mixed in trade yesterday and with the U.S. dollar shrugging off some early weakness showing little excitement for the day, to see the overall macro commodity index only close to steady for the day.    The Natural Gas, Cotton, Orange Juice, Wheat, Soybean and Silver markets had a day of buoyancy, while the Oil, Sugar, Cocoa, Coffee, Copper, Corn and Gold markets tended softer for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.01% lower, to see this Index registered at 426.94.  The day starts with the U.S. Dollar steady and trading at 1.224 to Sterling and at 1.059 to the Euro, while North Sea Oil is steady and is selling at $ 54.65 per barrel. 

The London and New York markets started the day on a steady note yesterday but with both markets coming under modest pressure and taking a softer track into the early afternoon trade, which was followed by a recovery into positive territory as the afternoon progressed.   This recovery was however not sustained and both markets once again came under pressure and moved back into negative territory, which set the markets on track for a soft end to the day.   The London market ended the day on a soft note and with 85.7% of the losses of the day intact, while the New York market ended the day on a very soft note and with 97.4% of the losses of the day intact.    This close does little to inspire but one might suspect that there might be a degree of caution towards believing in a bearish market which might assist to steady the markets for early thin trade today against the prices set yesterday, as follows: 

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

MAR     2150 – 22                                              MAR   139.65 – 1.60

MAY     2176 – 18                                              MAY    141.45 – 1.85

JUL      2193 – 16                                               JUL    143.75 – 1.85

SEP      2202 – 16                                              SEP    146.05 – 1.85

NOV     2206 – 16                                               DEC   149.30 – 1.75

JAN      2209 – 15                                              MAR   152.45 – 1.75

MAR     2210 – 15                                              MAY   154.45 – 1.70

MAY     2210 – 17                                               JUL    156.05 – 1.70

JUL      2212 – 17                                               SEP    157.65 – 0.65

SEP      2220 – 17                                               DEC   159.90 – 0.65


Coffee Market Report March 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 14.4% during the week of trade leading up to Tuesday 28th. February; to register a net long position of 18,395 Lots on the day.  This net long position which is the equivalent of 5,214,901 bags has most likely been marginally increased again, following the period of mixed but overall more positive trade, which has since followed. 

The coffee markets encountered little in the way of striking new fundamental news last week and for the present it is business as usual, which with the main stream consumer market stocks presently good, is resulting in somewhat lacklustre physical trade.   The lack of longer term market supply concern on the part of the consumer market players perhaps being supported by not only the evidence of good stocks, but by the fact that lacking any striking nearby negative weather forecasts for any of the main producer blocs, that there is presently no reason to fear problems for medium to longer term coffee supply. 

But one might suggest that with global coffee supply for the present coffee year only close to demand and with global consumption albeit slowly still steadily growing, that there is no reason to be bearish about the medium to longer term market and that the next move out of the present trading range, is more likely to be positive in nature.   Albeit that for the present and unless the funds step in to further support the markets, the short to medium term upside for the markets is unlikely to be very aggressive in nature.   

The May to May contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 43.78 usc/Lb., while this equates to 30.55% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,640 bags on Friday; to register these stocks at 1,340,109 bags.  There were meanwhile a larger in number 3,937 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,732 bags. 

The commodity markets ahead of the weekends latest Chinese economic forecasts but on the back of modestly positive U.S.A. and Euro zone economic forecasts had a mixed day on Friday, but with the overall macro commodity index taking a positive track for the day.   The Oil, Cocoa, Cotton, Copper, Orange Juice, Wheat and Corn markets had a day of buoyancy, while the Natural Gas, Sugar, Coffee, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.32% higher, to see this Index registered at 426.97.  The day starts with the U.S. Dollar tending a little softer and trading at 1.228 to Sterling and at 1.060 to the Euro, while North Sea Oil is near to steady and is selling at $ 54.15 per barrel. 

The London market started the day on Friday with predictable early losses and with producer selling coming to the fore, following the previous day’s gains, while the New York market started the day with modest buoyancy and with the markets taking this mixed track into the early afternoon trade.    As the afternoon progressed the New York market started to falter and dipped back to join the London market that was taking something of a sideways negative track, within modest negative territory.   Both market continued to trade within a narrow sideways negative trading range for the rest of the day and thus, to set both markets for a softer close for the day.   The London market continued to end the day on a soft note and with 77.8% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 61.8% of the earlier losses of the day intact.   This close does little to inspire confidence but by nature of it being a more of a negative correction than a sell off and with the U.S. dollar marginally softer, one might expect to see a close to steady start for early trade today against the prices set on Friday, as follows: 

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

MAR     2172 – 20                                              MAR   141.25 – 0.95

MAY     2194 – 21                                              MAY    143.30 – 1.05

JUL      2209 – 21                                               JUL    145.60 – 1.10

SEP      2218 – 20                                              SEP    147.90 – 1.10

NOV     2222 – 19                                               DEC   151.05 – 1.10

JAN      2224 – 20                                              MAR   154.20 – 1.05

MAR     2225 – 21                                              MAY   156.15 – 1.05

MAY     2227 – 21                                               JUL    157.75 – 1.00

JUL      2229 – 21                                               SEP    159.30 – 0.90

SEP      2237 – 21                                               DEC   161.55 – 0.80


Coffee Market Report March 03 2017

The preliminary coffee export figures from Brazil for the month of February have been announced by the Brazil Ministry of Trade, to announce that coffee exports for the month were 370,000 bags or 13.86% lower than the same month last year, at a total of 2.3 million bags.   This dip in export volumes not really reflecting much in the way of decline if global supply of Brazil arabica coffees which have dedicated demand within many leading consumer markets, but rather the lack of advantageous supply of price competitive conilon robusta coffees, that has seen supply of these coffees drying up, post the dismal 2016 conilon crop. 

Meanwhile there are reports of growing price resistance within the internal market in Vietnam for the remaining stocks of robusta coffees, as the already well sold farmers are holding out of more value.   This price resistance and its influence upon the volumes of price fixation selling in the London robusta coffee market, is assisting to buoy the prices of the London market. 

Predictably and following the lower Vietnam crop during the last quarter of last year and the dismal new Brazil conilon robusta coffee crop last year and with global robusta coffee supply in deficit for the present October 2016 to September 2017 coffee year as against a small surplus arabica coffee crop, the arbitrage between the London robusta coffee market and the New York arabica coffee market has been narrowing during trade this year.   Albeit that the sharply narrowing of the arbitrage in yesterday’s trade is likely due for some correction, as the London market is likely to suffer from corrective price fixation selling following the softer track taken in late trade within the New York market yesterday. 

There is little in the way of striking fundamental new news coming to the coffee markets at present, but there is growing speculation of a new El Nino phenomenon possibly developing during the second half of this year within the Pacific Ocean.   This is however so far not really a factor in terms of market sentiment as following the modest nature of last year’s La Niña phenomenon, the prospects of might prove to be only a modest El Nino phenomenon if any, is not yet a factor to create any fears of declining medium term coffee supply.   

What shall be a factor to be watched on the short term though shall be the advent of the new summer rain season that is due to kick in next month in Vietnam, as following the recently completed smaller new crop for the country and the declining coffee stocks, it shall be necessary for Vietnam to have good weather to support a larger new year end new crop.   For the present though there are no indications of any reason to fear that Vietnam shall not have a normal rain season, but the weather forecasts and reports out of Vietnam are no doubt due for some debate over the coming weeks.  

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 43.88 usc/Lb., while this equates to 30.40% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,835 bags yesterday; to register these stocks at 1,338,469 bags.  There were meanwhile a smaller in number 826 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,669 bags. 

The commodity markets with speculation for a further Federal Reserve Bank interest rate hike and the U.S. dollar showing some degree of muscle yesterday were mostly on a negative track for the day, to see the overall macro commodity index taking a softer track for the day.   The Natural Gas, Sugar, Cocoa, London robusta Coffee and Orange Juice markets nevertheless had a day of buoyancy, while the Oil, Cotton, New York arabica Coffee, 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 0.97% lower, to see this Index registered at 425.61.  The day starts with the U.S. Dollar tending a little softer and trading at 1.226 to Sterling and at 1.052 to the Euro, while North Sea Oil is steady and is selling at $ 53.90 per barrel. 

The London and New York markets started the day yesterday on a steady note and taking a steady to modestly buoyant track into the early afternoon trade, but with the New York market losing its way as the afternoon progressed and drifting back into negative territory.   The New York market did however manage to bounce back from its lows and follow the London market to the upside while the London market added more value in late trade, but with the New York market once again slipping back into modest negative territory for late trade.  The London market ended the day on a very positive note and with 95.7% of the gains of the day intact, while the New York market ended the day on a modestly negative note and having recovered 80.9% of the earlier losses of the day by the close.    This close and with the London market showing some degree of muscle is perhaps constructive for confidence but with the inability of the New York market to match the buoyancy of the London market it is likely to bring some selling pressure to the fore for the London market in early trade today against the prices set yesterday, as follows: 

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

MAR     2192 + 79                                              MAR   142.20 – 0.45

MAY     2215 + 66                                              MAY    144.35 – 0.45

JUL      2230 + 65                                               JUL    146.70 – 0.45

SEP      2238 + 65                                              SEP    149.00 – 0.45

NOV     2241 + 65                                               DEC   152.15 – 0.40

JAN      2244 + 65                                              MAR   155.25 – 0.35

MAR     2246 + 65                                              MAY   157.20 – 0.30

MAY     2248 + 65                                               JUL    158.75 – 0.30

JUL      2250 + 65                                               SEP    160.20 – 0.30

SEP      2258 + 65                                               DEC   162.35 – 0.30


Coffee Market Report March 02 2017

The National Coffee Institute in Costa Rica has reported that the countries coffee exports for the month of February were 36,193 bags or 25.05% lower than the same month last year, at a total of 108,276 bags.   This has contributed to the countries cumulative coffee exports for the first five months of the present October 2016 to September 2017 coffee year to being 32,883 bags or 10.49% lower than the same period in the previous coffee year, at a total of 280,276 bags. 

The National Coffee Institute in Honduras has reported that the countries coffee exports for the month of February were 250,306 bags or 35.58% higher than the same month last year, at a total of 953,831 bags.  This improved performance and if one is to apply the month by month figures reported by the National Coffee Institute for the coffee year so far, would contributed to the countries cumulative coffee exports for the first five months of the present October 2016 to September 2017 coffee year to have been 907,265 bags or 54.6% higher than the same period in the previous coffee year. 

However, within the report yesterday that confirmed the countries coffee exports for the month of February, the report indicated that the countries cumulative coffee exports for the first five months of the coffee year were only a more modest 36% higher, at 2,314,000 bags.   Whichever is the correct number though, there is no doubt that Honduras is surging ahead in coffee production and is likely to exceed 5.7 million bags in coffee exports for the present coffee year. 

The dip in coffee exports from Costa Rica for this coffee year so far and in terms of the downgraded new crop estimates by the National Coffee Institute was not unexpected, with the country now forecasting coffee exports for the coffee year, which might be little better than 1.1 million bags.   It is however not a scare story in terms of regional coffee supply, as with the larger players Honduras, Guatemala and Mexico estimated to have had larger new crops, the coffee supply from the producer bloc of Mexico and Central America is still estimated to be approximately 1.3 million bags higher for the present coffee year, from a regional crop of in excess of 18 million bags. 

It is early in the month but with evidence of forward contract commitments in hand, the trade in Vietnam is already estimating that the country shall export between 2.3 million and 2.7 million bags of mostly robusta coffees during the month of March.  This forecast in terms of the limited competition from Indonesia ahead of the start of their new robusta coffee harvest and no competition from Brazil post the dismal 2016 conilon robusta coffee crop, is a most likely scenario. 

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 47.32 usc/Lb., while this equates to 32.68% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,665 bags yesterday; to register these stocks at 1,332,634 bags.  There were meanwhile a larger in number 3,865 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,495 bags. 

The commodity markets while there was not that much clarity coming to the fore from the President address to the U.S. congress, took some heart from improved economic figures from both China and the Euro zone countries, to see the overall macro commodity index taking a positive track yesterday.  The Natural Gas, Sugar, Coffee, Cotton, Copper, Wheat, Corn, Soybean and Silver markets had a day of buoyancy, while the Oil, 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 0.79% higher, to see this Index registered at 429.79.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.228 to Sterling and at 1.053 to the Euro, while North Sea Oil is steady and is selling at $ 55.25 per barrel. 

The London and New York markets started the day yesterday on a steady note and taking a steady to modestly buoyant track into the early afternoon trade, but with both markets coming under pressure and heading south into negative territory as the afternoon progressed.    However, the reversal in the fortunes for the markets was somewhat short lived as both markets bottomed out and with industry buying coming into play and buy stops being triggered both markets recovered and moved back into positive territory, with the New York market in particular end the day on a strong upside track.   The London market ended the day on a modestly positive note and with 60% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 83% of the earlier gains of the day intact.    This close assists to paint something of a positive technical picture and one might think that it shall assist to inspire confidence for a steady to perhaps buoyant start for the markets for early trade today against the prices set yesterday, as follows: 

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

MAR     2113 + 10                                              MAR   142.65 + 1.95

MAY     2149 + 6                                                MAY    144.80 + 2.20

JUL      2165 + 5                                                 JUL    147.15 + 2.25

SEP      2173 + 5                                                SEP    149.45 + 2.25

NOV     2176 + 4                                                 DEC   152.55 + 2.25

JAN      2179 + 4                                                MAR   155.60 + 2.20

MAR     2181 + 4                                                MAY   157.50 + 2.25

MAY     2183 + 5                                                 JUL    159.05 + 2.25

JUL      2185 + 6                                                 SEP    160.50 + 2.20

SEP      2193 + 6                                                 DEC   162.65 + 2.25


Coffee Market Report March 01 2017

With the month of February 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 73,760 bags or 44.72% higher than the same month in the previous year, at a total of 238,695 bags.   This contributes to the cumulative exports for the first five months of the present October 2016 to September 2017 coffee year to being 28,504 bags or 1.86% higher than the same period in the previous coffee year, at a total of 1,561,173 bags. 

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

The Uganda Coffee Development Authority UCDA have reported that the countries coffee exports for the month of January were 70,280 bags or 21.02% higher than the same month last year, at a total of 404,673 bags.    This has contributed to the countries cumulative exports for the first four months of the present October 2016 to September 2017 coffee year to be 297,354 bags or 25.88% higher than the same period in the previous coffee year, at a total of 1,446,295 bags. 

The International Coffee Organisation ICO have reported that global coffee exports for the month of January were 6.7% higher than the same month last year, at a total of 9.84 million bags.   This improved volume contributes to the global coffee exports for the first four months of the present October 2016 to September 2017 coffee year to being 8.9% higher than the same period in the previous coffee year, at a total of 39.98 million bags.    These exports related to a 64.33 to 35.67 ratio of arabica and robusta coffees, which sees the presently tighter supplied robusta coffees quite predictably, losing some market share. 

The leading West African robusta coffee producer the Ivory Coast have reported that the countries coffee exports for the month of January were 15,983 bags or 22.7% lower than the same month last year, at a total of 54,433 bags.   

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 45.40 usc/Lb., while this equates to 31.84% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,082 bags yesterday; to register these stocks at 1,330,969 bags.  There were meanwhile a larger in number 8,700 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,630 bags. 

The commodity markets encountered a marginally softer U.S. dollar yesterday and despite some negative pressure upon the influential Oil markets, the overall macro commodity index took a positive track for the day.  The Natural Gas, Sugar, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Silver markets had a day of buoyancy, while the Oil, Cocoa and Gold markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.73% higher, to see this Index registered at 426.42.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.237 to Sterling and at 1.056 to the Euro, while North Sea Oil is showing buoyancy and is selling at $ 54.05 per barrel. 

The London market started the day yesterday with predictable early buoyancy and followed by a similar positive start for the New York market and with both markets taking a positive track into the early afternoon trade, with both markets starting to add more value.   The London market remained on a steady upside track for the rest of the day, but with the New York market briefly coming under some pressure and briefly heading back to par, before recovering and taking a modest positive track through to the close of the day.  The London market ended the day on a very positive note and with 93.5% of the gains of the day intact, while the New York market ended the day on a positive note and with 75% of the earlier gains of the day intact.    This close tends to inspire some degree of confidence and one would think that with most players in Brazil continuing their Carnival holiday today and off the field of play and with producers in general likely to step back to look for a further recovery, that the markets shall encounter a steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2103 + 37                                              MAR   140.70 + 1.60

MAY     2143 + 43                                              MAY    142.60 + 1.50

JUL      2160 + 41                                               JUL    144.90 + 1.45

SEP      2168 + 40                                              SEP    147.20 + 1.45

NOV     2172 + 40                                               DEC   150.30 + 1.40

JAN      2175 + 40                                              MAR   153.40 + 1.40

MAR     2177 + 40                                              MAY   155.25 + 1.40

MAY     2178 + 40                                               JUL    156.80 + 1.40

JUL      2179 + 40                                               SEP    158.30 + 1.35

SEP      2187 + 40                                               DEC   160.40 + 1.35


Coffee Market Report February 28 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net long position within the market by 16.8% over the week of trade leading up to Tuesday 21st. February; to register a net long position of 19,398 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 7.5%, to register a net long position of 33,492 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their long position within the market by 22.71%, to register net long position of 21,489 Lots.   This net long position which is the equivalent of 6,092,036 bags has most likely been once again decreased, 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 2.45% during the week of trade leading up to Tuesday 21st. February; to register a record net long position of 38,710 Lots.  This net long position which is the equivalent of 6,451,667 bags has most likely been further decreased, following the period of mixed but overall more negative trade that has since followed. 

With the export registrations for the month in hand and with the month coming to a close, the Vietnam state authorities have forecast that the countries coffee exports for mostly robusta coffee for the month shall be approximately 9.2% higher than the same month last year, at a total of approximately 2.17 million bags.   This is an impressive figure in terms of these exports coming to the fore from what has been reported to have been a smaller new crop and one would suggest that while exports are presently continuing in good volume, that there is a possibility that within the next couple of months that they shall start to taper off in volume. 

The question shall be in terms of global robusta coffee supply and should Vietnam exports start to decline in volume and with little chance in terms of forecasts for yet another modest conilon robusta coffee crop in Brazil this year, to what volumes can Indonesia, India, Uganda and West Africa step in with their robusta coffee supply, to fill the gaps that would come with declining Vietnam robusta coffee supply during the second half of the year.  Presently and with some support from the certified robusta coffee stocks held against the London market there are no fears of any disruptive shortage of robusta coffee supply, but there is the potential of tighter supply and producer price resistant support that would assist to buoy the relative fortunes of the London market. 

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 45.85 usc/Lb., while this equates to 32.49% price discount for the London robusta coffee market.  This once again narrowing arbitrage is now becoming less of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 1,027 bags yesterday; to register these stocks at 1,328,887 bags.  There were meanwhile a larger in number 3,460 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,330 bags. 

The commodity markets had a mixed day yesterday but despite a softening of the U.S. dollar for the day and some buoyancy for the Gold and Silver markets along with a steady day for the Oil markets, the majority of the markets came under pressure for the day and with the overall macro commodity index taking a softer track for the day.   The Oil, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, 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 0.84% lower, to see this Index registered at 423.32.  The day starts with the U.S. Dollar steady and trading at 1.243 to Sterling and at 1.058 to the Euro, while North Sea Oil is steady and is selling at $ 54.65 per barrel. 

The London market started the day yesterday near to steady but soon started to come under negative pressure, while the New York market started the day on a softer note.   Both markets retained this modestly softer stance into to afternoon trade but with a lack of aggressive producer selling in play, to maintain some degree of buoyancy within this softer sideways track.   The London market did however come under further pressure and some sell stops coming into play and to accentuate the losses but to bottom out and to take a sideways negative track for the rest of the day’s trade, while the New York market started on a steady downside track and with step down fund and speculative sell stops coming into play and to set the market for a late in the day mini collapse.   The London market continued to end the day on a soft note and with 78.8% of the earlier losses of the day intact, while the New York market ended the day on a very soft note and with 91.1% of the losses of the day intact.  This close has somewhat ripped the technical heart out of the New York market and to a lesser extent for the London market and does little to inspire confidence, but one might think that following a dramatic negative start to the week that there is unlikely to be much in the way of producer selling in play and that there might be some advantageous industry price fixation buying coming into play, to assist towards some modest buoyancy to be due for early trade today, against the prices set yesterday, as follows: 

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

MAR     2066 – 29                                              MAR   139.10 – 5.30

MAY     2100 – 26                                              MAY    141.10 – 5.15

JUL      2119 – 24                                               JUL    143.45 – 5.05

SEP      2128 – 22                                              SEP    145.75 – 5.05

NOV     2132 – 22                                               DEC   148.90 – 5.05

JAN      2135 – 20                                              MAR   152.00 – 4.95

MAR     2137 – 21                                              MAY   153.85 – 4.95

MAY     2138 – 21                                               JUL    155.40 – 4.95

JUL      2139 – 21                                               SEP    156.95 – 4.85

SEP      2147 – 21                                               DEC   159.05 – 4.90


Coffee Market Report February 27 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net long position within the market by 22.71% during the week of trade leading up to Tuesday 21st. February; to register a net long position of 21,489 Lots on the day.  This net long position which is the equivalent of 6,092,036 bags has most likely been since decreased again, following the period of mixed but overall more negative trade, which has since followed. 

Brazil left the field of play late in the day on Friday, as the country closed down for the extended long weekend Carnival holiday that sees all commercial activity closed for today and tomorrow and only a partial and most probably insignificant late return to work on Wednesday, which is likely to remove the negative activity of exporter price fixation selling over the top of the New York arabica coffee market.  While following the dismal conilon robusta coffee crop last year and the resulting lack of available conilon robusta coffee stocks for purposes of export, the lack of Brazil commercial activity in terms of robusta coffees shall have no impact upon activity within the London market.   

Meanwhile the stalling of the approval for Brazil’s domestic roasters and mostly so the soluble coffee manufacturers to import up to 1 million bags of robusta coffees, is likely to be fait accompli and few expect that the gazetted approval for such imports shall be reinstated.  Especially so as with the Brazil Government and President having taken the decision to halt the progress of the matter and the indication that even if allowed that the strict phytosanitary regulations would make the imports risky in terms of rejection upon arrival, is likely to dampen the attractiveness of such imports for the industry players who were looking forward to the price relief that such imports would bring. 

The auction on Thursday of the Brazil government retention stocks of aged arabica coffees and the third such auction this year, achieved an almost 100% sale of the 146,143 bags on offer and at an average price of 1.08 usc/Lb.   These coffees directed towards the countries domestic roasters, who have been paying up over the past nine months for the traditionally more affordable conilon robusta coffees.    

Following a dry and hot spell for the main arabica coffee districts in south east Brazil over the past couple of weeks the forecasts are for good rains to come this week, which is likely to dampen some of the speculative spirits, in terms of the forecasts of some threat to the prospects of the new Brazil arabica coffee crop this year.  Albeit that many still refer to the negative influences of biennial bearing, which they speculate shall cause some degree of decline in the arabica coffee crop this year.    

It has been reported that the Ethiopian Coffee and Tea Development and Marketing Authority have reported that the countries coffee exports for the first seven months of the first seven months of the country’s financial year starting on the 8th. July 2016, were recorded at 1,610,717 bags and at a value of 360.8 million U.S. dollars.   This volume and value was they say a disappointing 15.97% and 19.68% lower than budgeted respectively, but the value of these exports was nevertheless 4% higher than the same period in the countries previous financial year.   

The May to May contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 49.82 usc/Lb., while this equates to 34.06% price discount for the London robusta coffee market.  This broadening arbitrage is now becoming more of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 4,912 bags on Friday; to register these stocks at 1,329,914 bags.  There were meanwhile a smaller in number 175 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,870 bags. 

The commodity markets along with the equity markets are now tending to be focused for the short term on the pending U.S. Presidents fiscal policy speech, which shall be presented to the U.S. congress tomorrow.   While flattening our economic figures within the U.S.A. in recent days, is tending to dampen some spirits which saw the overall macro commodity index taking a softer track on Friday.   The Cotton, Copper, Soybean, Gold and Silver markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Orange Juice, Wheat and Corn markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% lower, to see this Index registered at 426.90.  The day starts with the U.S. Dollar steady showing some degree of buoyancy and trading at 1.242 to Sterling and at 1.056 to the Euro, while North Sea Oil is steady showing a degree of buoyancy and is selling at $ 54.95 per barrel. 

The London market started the day on Friday on a near to steady note, while the New York market started the day with modest buoyancy.  The London market did not however sustain its hesitant stability for long and started to lose its way in early afternoon trade and followed as the afternoon progressed, by the New York market likewise falling back into negative territory and with both markets taking a steady slide south for the rest of the day’s trade.   The London market continued to end the day on a soft note and with 78.4% of the earlier losses of the day intact, while the New York market ended the day on a likewise soft note and with 81.3% of the earlier losses of the day intact.  This close does little to inspire confidence and a negative technical picture is unlikely to encourage early industry buying activity, but with producer selling quiet one might expect to see something of 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     2095 – 29                                              MAR   144.40 – 3.45

MAY     2126 – 29                                              MAY    146.25 – 3.70

JUL      2143 – 27                                               JUL    148.50 – 3.70

SEP      2150 – 27                                              SEP    150.80 – 3.65

NOV     2154 – 25                                               DEC   153.95 – 3.60

JAN      2155 – 25                                              MAR   156.95 – 3.55

MAR     2158 – 25                                              MAY   158.80 – 3.45

MAY     2159 – 25                                               JUL    160.35 – 3.45

JUL      2160 – 25                                               SEP    161.80 – 3.50

SEP      2168 – 25                                               DEC   163.95 – 3.50


Coffee Market Report February 24 2017

The Coffee Board of India has reported that the countries coffee exports for this year so far up to Tuesday 21st. February were 42,733 bags or 5.9% higher than the same period last year, at a total of 766,667 bags.   These exports were even a more impressive 15.9 million U.S. Dollars or 15.39% higher in value than the value of the exports for the same period last year, at a value of 119.2 million U.S. dollars. 

Despite some disappointment within Vietnam over the news that the authorisation to allow for the import of up to 1 million bags of robusta coffees into Brazil has been suspended, there are reports that the farmers and internal traders within Vietnam remain confident in the medium to longer term prices for robusta coffees.   In this respect reports are of some degree of price resistance within the internal market, which is with the present lacklustre performance of the reference prices of the London market slowing sales to the countries exporters. 

Meanwhile ahead of the start of the new robusta crop in Indonesia in April, there is lacklustre internal market trade of robusta coffees.  With exporters only expecting to see some upturn in the volumes of new business in late April or May this year, which with the lack of competition from Indonesia and only relatively modest volumes of robusta coffees coming to the market from India and Uganda, leaves the Vietnamese farmers with their now much reduced new crop stocks, quite some muscle in terms of their price demands to the countries exporters. 

On the arabica coffee front and with the carnival atmosphere already coming to mind in Brazil ahead of the Monday to Wednesday holidays next week, there is presently little excitement in terms of physical trade for the present.   This lack of buying arabica coffee aggression being somewhat accentuated by the fact that consumer market coffee stocks are presently good and with the main European, North American and Japanese markets all holding extensive stocks.   

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 52.20 usc/Lb., while this equates to 34.81% price discount for the London robusta coffee market.  This broadening arbitrage is now becoming more of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 1,962 bags yesterday; to register these stocks at 1,334,826 bags.  There were meanwhile a larger in number 7,350 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 33,045 bags. 

The U.S. dollar was marginally softer yesterday and this despite the support of speculation for another interest rate hike in the near future which has recently been assisting to buoy confidence in the currency, to see the markets and the overall macro commodity index taking something of a sideways track in mixed trade yesterday.   The Oil, Natural Gas, Cocoa, Cotton, Orange Juice, Gold and Silver markets had a day of buoyancy, while the Sugar, Coffee, 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 0.003% lower, to see this Index registered at Friday’s level of 427.99.  The day starts with the U.S. Dollar steady and trading at 1.255 to Sterling and at 1.058 to the Euro, while North Sea Oil is steady and is selling at $ 55.70 per barrel. 

The London market started the day yesterday on a softer note, while the New York market started the day with modest buoyancy.   The London market did however soon recover to trade around par, while the New York market retained its buoyancy and with the markets taking this track into the early afternoon trade, but within an environment of mostly thin and lacklustre trade.  As the afternoon progressed the New York market started to falter and to finally move back into negative territory and accompanied by a softening within the London market and with both markets heading towards taking a softer stance, for the close of the day.   The London market ended the day on a softer note and with 46.2% of the earlier losses of the day intact, while the New York market ended the day on a softer note and with 86.4% of the earlier losses of the day intact.    This close provides for little in the way of direction and one might suspect that there shall only be 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     2124 – 6                                                MAR   147.85 – 1.35

MAY     2155 – 6                                                MAY    149.95 – 0.95

JUL      2170 – 6                                                 JUL    152.20 – 1.00

SEP      2177 – 6                                                SEP    154.45 – 1.00

NOV     2179 – 7                                                 DEC   157.55 – 0.95

JAN      2180 – 7                                                MAR   160.50 – 0.95

MAR     2183 – 7                                                MAY   162.25 – 0.95

MAY     2184 – 7                                                 JUL    163.80 – 0.90

JUL      2185 – 7                                                 SEP    165.30 – 0.85

SEP      2193 – 7                                                 DEC   167.45 – 0.80


Coffee Market Report February 23 2017

With somewhat intense opposition to the granting of import licences to the countries domestic roasters for up to 1 million bags of robusta coffee over a period of four months from the countries conilon robusta coffees, the Brazilian President Michel Temer has provisionally suspended the authorisation of robusta coffee imports.   Thus, with many within the Brazilian government and supported by the President in conflict with over this politically sensitive issue, the matter is on hold and the news yesterday had a modest negative influence on sentiment within the coffee markets. 

In the meantime, and with internal market supply of conilon robusta coffees and with a traditional demand by domestic roasters for approximately 12 million to 13 million bags of conilon robusta coffee extremely tight, the roasters have been changing blends and absorbing increased volumes of arabica coffees into the blends.   But in this instance, mostly the lower grades and including many that over the past few years had been exported as Brazil grinder coffees.   A factor that impacts upon overall arabica coffee supply to the consumer markets and to a degree, lessens the prevailing small surplus in overall global arabica coffee supply. 

This with the prevailing deficit supply of robusta coffee that can be expected following a smaller new Vietnam crop and a reduction last year of the Vietnam robusta coffee stocks, the general perspective is that there presently is a modest overall deficit coffee supply.   This has resulted in the latest Goldman Sachs commodity outlook forecasting that the New York market has a medium-term upside potential and with a price forecast of something between 165 usc/Lb., to 170 usc/Lb. 

Modestly supportive for the fortunes of the coffee markets is the news yesterday that Kraft Heinz Co. in the U.S.A. have announced that they shall apply an approximate 6% increase to the wholesale prices of their prominent Maxwell House and Yuban brands, with these increases to relate to both their roast and ground and soluble coffee products.    These increases to likewise apply to their McCafé canister products, which they distribute to the market.    Thus, indicating to the market that they believe in medium to longer term coffee price buoyancy and likewise with these increases, their ability to pay up for their coffee future green coffee supply. 

Brazil is moving closer to the pending extensive long weekend which shall see the country celebrate Carnival for the first three days of next week and one would suspect, that there might be some small increase in internal market price fixation selling activity ahead of this weekend.    However with most farmers already well sold for their 2016 arabica coffee stocks one might not think that the volumes shall be that significant that that the related Brazil exporter price fixation selling activity within the New York market shall be that noticeable over today and tomorrow.  

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 52.88 usc/Lb., while this equates to 35.04% price discount for the London robusta coffee market.  This broadening arbitrage is now becoming more of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 6,337 bags yesterday; to register these stocks at 1,332,864 bags.  There were meanwhile a smaller in number 5,144 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,695 bags. 

The U.S. dollar remained buoyant for the day yesterday and had an impact upon many of the markets, with the overall macro commodity index taking a modestly softer track for the day.    The Natural Gas, Cotton Wheat and Corn markets nevertheless had a day of buoyancy and the Cocoa market was near to steady for the day, while the Oil, Sugar, Coffee, Copper, Orange Juice, 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 Friday’s level of 428.01.  The day starts with the U.S. Dollar steady and trading at 1.244 to Sterling and at 1.055 to the Euro, while North Sea Oil is steady and is selling at $ 55.50 per barrel. 

The London market started the day yesterday on a softer note, while the New York market started the day with modest buoyancy.   This remained the track for the markets, which took this mixed track into the early afternoon trade.   As the afternoon progressed the London market encountered the negative news of the halting of the plans to import robusta coffees into Brazil which contributed to the softer stance being taken within this market, but with the New York market and despite the negative influences of the negative nature of the macro commodity index, managing to remain within positive territory.    This was however unstainable and while the London market that had bounced back from the lows continued on a negative track towards the close, the New York market faltered and slipped back into negative territory in late trade.   The London market ended the day on a soft note and with 58.3% of the earlier losses of the day intact, while the New York market ended the day on a likewise soft note and with 65.5% of the losses of the day intact.   This close is unlikely to buoy confidence and one might expect to see little better than a near to steady start for early trade today against the prices set yesterday, as follows: 

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

MAR     2130 – 28                                              MAR   149.20 – 1.15

MAY     2161 – 28                                              MAY    150.90 – 0.95

JUL      2176 – 26                                               JUL    153.20 – 0.90

SEP      2183 – 24                                              SEP    155.45 – 0.95

NOV     2186 – 24                                               DEC   158.50 – 1.00

JAN      2187 – 24                                              MAR   161.45 – 1.00

MAR     2190 – 24                                              MAY   163.20 – 0.90

MAY     2191 – 24                                               JUL    164.70 – 0.85

JUL      2192 – 24                                               SEP    166.15 – 0.80

SEP      2200 – 24                                               DEC   168.25 – 0.75


Coffee Market Report February 22 2017

The latest figures emanating from the official coffee institute in Costa Rica and with the new crop close to completion, are pointing to a new crop of close to 1.4 million bags, as opposed to pre-harvest forecasts that had been indicating a new crop of in excess of 1.5 million bags.   While there are some internal trade players in Costa Rica are talking the new crop even lower, at less than the latest 1.4 million bags forecast. 

This said and with the latest reports indicating a new Costa Rica crop that might be between 100,000 and 150,000 below expectations, there have been no indications that the larger regional Central American producers will not be in receipt of larger new crops this year.   In this respect, Honduras, Guatemala and Mexico are still expected to bring in larger new crop this year, with the expectations despite the problems being encountered by Costa Rica that the producer bloc of Mexico and Central America shall have a new crop of close to 18 million bags. 

This is aside from the expectations of a modest increase in production by Colombia for the present October 2016 to September 2016 coffee year, while the new Peru crop that shall start being harvested in April, is likewise expected to be a larger new crop.    Thus for the present there would appear to be not threat to the medium term supply of fine washed arabica coffees, but this is presently not dampening the speculative spirits within the related New York market, which with only light volumes of producer selling in play, has been attracting good speculative and fund support over the past few days. 

The National Office of Coffee and Cocoa in the Cameroon have reported that for their 2015/2016 coffee year the country exported 2.66% more coffee than the previous coffee year, to see exports total 408,333 bags, while the countries domestic roaster consumption 9.8%, to total 63,100 bags.  This improved performance the NOCC report, is due to the increased support that is now coming from the countries Ministry of Agriculture, in the form of sponsored coffee seedlings and improved extension services that are being forwarded to the countries mostly robusta coffee small scale coffee farmers. 

The May to May contracts arbitrage between the London and New York markets broadened yesterday, to register this at 52.56 usc/Lb., while this equates to 34.61% price discount for the London robusta coffee market.  This broadening arbitrage is now becoming more of an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 1,907 bags yesterday; to register these stocks at 1,326,527 bags.  There were meanwhile a larger in number 2,757 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,839 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 42,000 bags or 1.56% over the week of trade leading up to Monday 20th. February, to register these stocks at 2,739,500 bags, on the day. 

The U.S. dollar remained buoyant for the day yesterday and had some impact upon many of the markets, but the markets had mixed fortunes for the day and with the overall macro commodity index taking something of a sideways track for the day.   The Oil, Sugar, Cocoa, Coffee, Cotton, Copper and Corn markets had a day of buoyancy, while the Natural Gas, 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 0.25% lower, to see this Index registered at Friday’s level of 430.37.  The day starts with the U.S. Dollar steady and trading at 1.250 to Sterling and at 1.054 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 56.15 per barrel. 

The London market started the day on a near to steady note yesterday, while the New York market post the Presidents Day long weekend holiday started the day with immediate buoyancy.   This remained the track for the markets into the early afternoon trade, with the London market trading around par and the New York market retaining its modest positive stance and setting a positive base for sentiment within the markets.   As the afternoon progressed the New York market added value and with the London market gaining some confidence and moving into modes positive territory and with the markets continuing towards a positive close.   The London market ended the day on a modestly positive note and with 37.5% of the gains of the day intact, while the New York market ended the day on a very positive note and with 78% of the earlier gains of the day intact.   This close assist to paint a positive technical picture for the markets and is likely to buoy confidence and thus, one might expect to see some follow through buoyancy for the London market and a near to steady start for the New York market for early trade today against the prices set yesterday, as follows: 

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

MAR     2158 + 2                                                MAR   150.35 + 2.55

MAY     2189 + 3                                                MAY    151.85 + 2.30

JUL      2202 + 6                                                 JUL    154.10 + 2.30

SEP      2207 + 6                                                SEP    156.40 + 2.30

NOV     2210 + 6                                                 DEC   159.50 + 2.25

JAN      2211 + 7                                                MAR   162.45 + 2.20

MAR     2214 + 7                                                MAY   164.10 + 2.15

MAY     2215 + 7                                                 JUL    165.55 + 2.10

JUL      2216 + 7                                                 SEP    166.95 + 2.00

SEP      2224 + 7                                                 DEC   169.00 + 2.00


Coffee Market Report February 21 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 17.33% over the week of trade leading up to Tuesday 14th. February; to register a net long position of 16,608 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.21%, to register a net long position of 36,208 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their long position within the market by 11.92%, to register net long position of 17,551 Lots.   This net long position which is the equivalent of 4,964,291 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 8.78% during the week of trade leading up to Tuesday 14th. February; to register a record net long position of 39,682 Lots.  This net long position which is the equivalent of 6,613,667 bags has most likely been increased again, following the period of mixed but overall more positive trade that has since followed. 

Predictably the new rules related to the importation of up to 1 million bags of robusta coffee into Brazil that were gazetted yesterday, are very strict in terms of the requirement for fumigation certification and for phytosanitary certification controls.   With the further stipulation that if any type of insect contamination is found within any of the shipments, that it would result in the suspension of the robusta coffee imports.   Thus, indicating that there might be hurdles to the fore, in terms of the pending imports of robusta coffee into Brazil. 

One might comment that with the risk that even with fumigation prior to shipment that while killing any insects within the coffee might not damage eggs and that new insects would hatch while the coffee is in transit, that many potential importers in Brazil might fear the risk of taking advantage of the concession to allow for the import of supplementary stocks of robusta coffee.   This might slow the start of the importation of robusta coffees and their marginal impact upon global robusta coffee supply, albeit that once some successful imports are concluded that it would most likely accelerate further import activity.   

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 50.39 usc/Lb., while this equates to 33.69% 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 6,569 bags yesterday; to register these stocks at 1,328,434 bags.  There were meanwhile a larger in number 8,654 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 33,596 bags. 

With the Presidents Holiday in the U.S.A. yesterday there were a number of markets closed for the day, which resulted in a lack of general direction for the global commodity markets for the day.  There are however positive forecasts in terms of economic growth coming to the fore from China, which assists to buoy confidence within many markets.  The Oil, London robusta Coffee, Copper, Orange Juice and Silver markets were nevertheless showing buoyancy for the day, while the Natural Gas, Sugar, Cocoa, Cotton, Wheat, Corn, Soybean and Gold markets tended softer for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets and lacking full market participation cannot be quoted for yesterday, to see this Index registered at Friday’s level of 430.37.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.244 to Sterling and at 1.058 to the Euro, while North Sea Oil is steady and is selling at $ 55.25 per barrel. 

The London market trading solo for the day started the day on a steady note but soon moving modestly south of par, to take a marginally softer track into the early afternoon trade.   As the afternoon progressed though and within an environment of thin and lacklustre trade, the market moved back into positive territory and to retain its buoyancy through to the close.  The London market ended the day on a positive note and with 85.7% of the gains of the day intact, to mirror the positive close of the New York market on Friday.  One might think that this could be supportive for confidence and that the markets might be due for a relatively steady start for early trade today against the close in London yesterday and the close in New York on Friday, as follows: 

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

MAR     2156 + 12                                              MAR   147.80 + 1.50

MAY     2186 + 12                                              MAY    149.55 + 1.15

JUL      2196 + 10                                               JUL    151.80 + 1.15

SEP      2201 + 8                                                SEP    154.10 + 1.15

NOV     2204 + 8                                                 DEC   157.25 + 1.15

JAN      2204 + 8                                                MAR   160.25 + 1.15

MAR     2207 + 8                                                MAY   161.95 + 1.15

MAY     2208 + 8                                                 JUL    163.45 + 1.05

JUL      2209 + 8                                                 SEP    164.95 + 1.05

SEP      2217 + 8                                                 DEC   167.00 + 0.90