Market Reports

Coffee Market Report December 14 2018

The Brazilian Institute of Geography and Statistics IBGE have increased by 1.7% their assessment of this year’s new Brazil crop, now asses the crop at 59.6 million bags.   This they appropriate to 44.8 million bags of arabica coffees and to 14.8 million bags of conilon robusta coffees. 

The traditionally conservative IBGE has generally been seen to be approximately 10% below reality and if one is to apply this factor, it would indicate a new Brazil coffee crop this year of close to the 65 million bags that many other local and international trade and industry bodies have reported.  Thus, it is a report, which underpins the prevailing bearish sentiment within the market. 

The respected Brazil analysts Safras & Mercado have reported that as at the beginning of this week, that farmers had sold 64% of the new crop coffees, as opposed to a 66% factor at the same time last year.  But if one is to consider that this new crop is approximately 26% larger than the previous years crop, the volume of new crop sales this year in excess of 41 million bags, would be approximately 7.5 million bags higher than the same time last year.   As is evident by the large numbers of exports that have been recorded, over the past few months. 

It has been reported that internal market sales in Brazil have slowed of late, which is probably to be expected, with farmers having already sold and cashed in good volumes of coffee.   Making one speculate that with good sales in hand and the distraction of the festive season and the Brazil summer holidays on a nearby horizon, that internal market selling activity might remain slow into the start of the new year.   This might if the already short sold funds remain quiet and perhaps even look to do some short covering, assist for some degree of buoyancy for the New York market. 

Weather wise it is reported that Brazil has had a mostly dry week over the main south east of Brazil coffee regions, but with rains having been reported for the more northern regions of Zona da Mata, North Espirito Santo and Bahia.   The dry areas do however after the past couple of months of good rains, have good ground water retention levels, with spells of sunny dry weather being beneficial for the development of the new 2019 crop cherries. 

The new Vietnam harvest is perhaps as much as 70% complete, with stocks building but presently some degree of price resistance reported.   But it would seem there is no shortage of supply for the country’s exporters, in terms of their nearby forward sold export commitments. 

The National Weather Services Climate Prediction Centre CPC in the U.S.A. have reported that they now foresee a 90% chance for a new El Niño phenomenon to form in the Pacific Ocean and a 60% chance, for it to continue into the second quarter of next year.  But there is no indication of the potential intensity of the probable new El Niño and as if it proves to be only a mild occurrence, it is unlikely to be severely damaging to the coffee producers in the Pacific Rim countries.  While if it does occur, it would be favourable for increased rains in the new year for the coffee producing districts in south east Brazil. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.88 usc/Lb., while this equates to 34.47% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 916 bags yesterday; to register these stocks at 2,448,662 bags.  There was meanwhile a larger in number 3,486 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 62,600 bags. 

The commodity markets had another mixed day yesterday, to see the overall macro commodity index taking a modest upside track for the day.   The Oil, Sugar, Cocoa, New York arabica Coffee, Orange Juice and Wheat markets ended the day on a positive note and the Natural Gas market ended the day on a near to steady note, while the London robusta Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% higher; to see this index registered at 407.94.   The day starts with the U.S. Dollar steady and trading at 1.263 to Sterling, at 1.136 to the Euro and with the dollar buying 3.891 Brazilian Real. 

The London and New York markets started the day yesterday trading marginally above par, but with the New York market slipping back to trade marginally south of par and with the markets taking a mixed stance, into the early afternoon trade.   As the afternoon progressed the New York market extended its losses and the London market slipped back to trade marginally below par, but with the New York market recovering to trade in positive territory and the London market coming under pressure to fall into relatively deep negative territory.   

The London market ended the day on a very negative note and with 81.8% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 80.8% of the earlier gains of the day intact.   This close and with the New York market having managed to bounce back from the earlier 1.30 usc/Lb. losses of the day, might assist towards some degree of confidence and set the markets for a degree of buoyancy for the London market and a 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. 

                                                                        DEC      98.80 + 1.05

JAN    1477 – 22                                             MAR   104.10 + 1.05

MAR   1504 – 18                                             MAY   107.20 + 1.10

MAY   1519 – 18                                              JUL    109.90 + 1.10

JUL    1536 – 16                                              SEP    112.60 + 1.10

SEP    1555 – 14                                              DEC   116.35 + 1.15

NOV   1573 – 13                                              MAR   119.95 + 1.10

JAN    1591 – 12                                              MAY   122.40 + 1.10

MAR   1605 – 13                                              JUL    124.75 + 1.05

MAY   1626 – 13                                              SEP    127.00 + 1.00

JUL    1638 – 13                                              DEC    129.90 + 0.90


Coffee Market Report December 13 2018

There was little in the way of news coming to the coffee markets yesterday, post the evidence of the extended speculative short sold status of the volatile New York market and with the follow-on selling activity within the market, that this has most probably been further extended.   A factor that leaves the market open for short covering profit taking activity, which is the only support factor for this market at present. 

Meanwhile with a large new Vietnam robusta coffee crop well on the way and rising internal market farm and trade stocks, the London market remains under pressure from the prospects of increased volumes of price fixation selling pressure.  While with this new crop already starting to come into play in terms of the probability of large volumes of new crop robusta coffee exports due for the first quarter of the coming year, there is nothing available to support speculative sentiment within this market. 

There shall though be an interruption to the export activity from Vietnam for the first half of February next year, as the country starts to celebrate the Tet New Year holiday on Saturday 2nd. February and leading up to the Tet New Year day on Tuesday 5th. February and with the celebrations and holiday to continue through to Sunday 10th. February. 

These Tet New Year holidays to celebrate the start of the Year of the Pig are lavishly celebrated and at quite some expense and with the reference prices of the London market dictating narrowed profit margins for the countries robusta coffee farmers, it is likely that they shall have to liquidate higher volumes of new crop stocks than they had to early this year, to finance their celebrations.  This prospect of increased volumes of sales is a factor, that is likely to keep negative pressure on the London market for the short term.  

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 34.01 usc/Lb., while this equates to 33% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,415 bags yesterday; to register these stocks at 2,447,746 bags.  There was meanwhile a larger in number 9,110 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 66,086 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 53,333 bags or 3.21% over the week of trade leading up to Monday 10th. December, to see these stocks registered at 1,714,000 bags. 

The commodity markets had a mixed day yesterday and with the U.S. dollar tending to fall back a little, to see the overall macro commodity index taking a modest upside track for the day.   The Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, London robusta Coffee, Cotton and Copper markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.23% higher; to see this index registered at 406.61.   The day starts with the U.S. Dollar steady and trading at 1.261 to Sterling, at 1.136 to the Euro and with the dollar buying 3.855 Brazilian Real. 

The London market started the day yesterday trading around par and the New York market on a modestly positive note and to see the London market soon move up to join it in positive territory, to see the markets taking a modestly positive track into the early afternoon trade.  Both markets did though soon falter and move back to trade around par, before the New York market and with a firming Brazil Real assisting to buoy sentiment attracted support and moved back up into positive territory and accompanied by the London market.    The London market did however soon encounter a ceiling of selling activity and slipped back to trade around par and below par for late trade, while the New York market likewise hit a ceiling to limit its gains. 

The London market ended the day on a negative note and with 100% of the earlier modest losses of the day intact, while the New York market ended the day on a positive note and with 48.3% of the earlier gains of the day intact.   This close and with the markets having struggled to hold onto the earlier gains of the day, provides little in the way of direction and one might think to see only a slow and hesitant steady start due for early trade today.   Against the prices set yesterday, as follows: 

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

                                                                        DEC      97.75 + 0.10

JAN    1499 – 3                                               MAR   103.05 + 0.70

MAR   1522 – 5                                               MAY   106.10 + 0.50

MAY   1537 – 3                                                JUL    108.80 + 0.45

JUL    1552 – 3                                                SEP    111.50 + 0.45

SEP    1569 – 3                                                DEC   115.20 + 0.45

NOV   1586 – 3                                                MAR   118.85 + 0.45

JAN    1603 – 3                                                MAY   121.30 + 0.45

MAR   1618 – 1                                                JUL    123.70 + 0.45

MAY   1639 – 1                                                SEP    126.00 + 0.45

JUL    1651 – 1                                                DEC    129.00 + 0.45


Coffee Market Report December 12 2018

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 31.42% over the week of trade leading up to Tuesday 4th. December; to register a new net short sold position of 36,798 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.63%, to register a net long position of 42,240 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 24.57%; to register a new net short sold position of 48,545 Lots. This net short-sold position which is the equivalent of 13,762,292 bags has most likely been further increased, following the period of mixed but overall softer trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The Brazil Coffee Exporters Association Cecafé have reported that the countries green coffee exports for the month of November were 25.9% higher than the same month last year, at a total of 3.42 million bags.  While noting that the approximately 500% increase in conilon robusta coffee exports for the month at 233,951 had contributed to this increase.   The report also notes that the association expects the prevailing high volumes of exports and following the bumper 2018 new coffee crop, shall continue into the coming months. 

This forecast for high volumes of coffee exports from Brazil and the related perception for high volumes of exporter hedge selling into the coffee terminal markets, contributes to bearish sentiment for the markets.   Particularly so for the New York arabica coffee market, which can foresee rising volumes of exporter hedge selling due from the new Mexican and Central American coffee crops, which are presently being harvested. 

While with the Christmas and New Year holiday season now on a close horizon and with most industry buyers already well covered with forward contracts for the short term and looking rather to year end statistics, the short-term physical demand and buying support for the market is thin for the present.   Adding to a lack of industry support, under the markets that presently suffer from the combination of speculative and producer selling pressure. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 33.09 usc/Lb., while this equates to 32.33% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,749 bags yesterday; to register these stocks at 2,446,331 bags.  There was meanwhile a smaller in number 2,475 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 75,196 bags. 

The commodity markets had a mixed day yesterday, to see the overall macro commodity index on something of a sideways track for the day.  The Oil, Sugar, Cotton and Copper markets ended the day on a positive note, while the Cocoa, Coffee and Gold markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% lower; to see this index registered at 405.66.   The day starts with the U.S. Dollar steady and trading at 1.251 to Sterling, at 1.133 to the Euro and with the dollar buying 3.904 Brazilian Real. 

The London market started the day yesterday on a softer note, while the New York market started the day trading close to par, but to soon soften and to join the London market in modest negative territory into the early afternoon trade.   As the afternoon progressed both markets came under pressure and extended their losses and with the New York market triggering sell stops, to accentuate the decline.

 The London market ended the day on a very negative note and with 95.5% of the earlier losses of the day intact, while the New York market ended the day on a likewise very negative note and with 90.3% of the earlier losses of the day intact.   This close paints a rather negative picture for the charts and does not inspire confidence but some might see that with the evidence of the increased short sold status of the New York market that has most certainly been increased further, that this market might be somewhat oversold.  Which is a factor that might cause a degree of hesitancy and caution for early trade today and a steady start, against the prices set yesterday, as follows: 

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

                                                                        DEC      97.65 – 2.80

JAN    1502 – 22                                             MAR   102.35 – 2.80

MAR   1527 – 21                                             MAY   105.60 – 2.70

MAY   1540 – 19                                              JUL    108.35 – 2.65

JUL    1555 – 20                                              SEP    111.05 – 2.60

SEP    1572 – 19                                              DEC   114.75 – 2.60

NOV   1589 – 19                                              MAR   118.40 – 2.60

JAN    1606 – 18                                              MAY   120.85 – 2.60

MAR   1619 – 17                                              JUL    123.25 – 2.60

MAY   1640 – 17                                              SEP    125.55 – 2.60

JUL    1652 – 17                                              DEC    128.55 – 2.65


Coffee Market Report December 11 2018

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 short sold position within the market by 24.57% over the week of trade leading up to Tuesday 4th. December; to register a new net short sold position of 48,545 Lots.   This net short-sold position which is the equivalent of 13,762,292 bags has most likely been increased further, following the mixed but overall negative trade which has since followed. 

Correction: The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market move back into a net short sold position within the market during the week of trade leading up to Tuesday 4th. December; to register a short-sold position of 2,682 Lots on the day.  This net short position which is the equivalent of 447,000 bags has most likely been further extended, following the softer track that the market took for the second half of last week. 

The markets remain devoid of any supportive news and with bearish fundamentals for surplus global coffee supply for the coming year often repeated, the coffee terminal markets remain soft and with the general perspective that this shall remain the case for the first quarter of the coming year.   As it can only be some damaging weather-related news for one or the other of the main coffee producer blocs, that could come to the fore to change the nature of the markets. 

Global consumption growth that many foresee to be well in excess of 3 million bags per annum is of course a longer-term supportive factor, but with still reasonable consumer market stocks in hand and the probability that global coffee supply for the coming year shall significantly exceed the global consumption growth, this has to be seen to be only a longer-term market support factor. 

The big question is now what shall be the prospects for the next 2019 Brazil crop as if it does not exceed 55 million bags due to biennial bearing factors, the global consumption growth factor might have to some positive impact for the market for the second half of next year.   Along with the probability that due to unprofitable sales during the first half of the coming year and the resulting lower inputs on the part of many farmers in Central America and some other producers, forecasts coming to the fore for lower new crop volumes for the follow-on October 2019 to September 2020 coffee year. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 34.93 usc/Lb., while this equates to 33.22% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 1,140 bags yesterday; to register these stocks at 2,455,080 bags.  There was meanwhile a larger in number 9,120 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 77,671 bags. 

The commodity markets encountered renewed muscle for the U.S. dollar and had an overall negative day yesterday, to see the overall macro commodity index on a negative track for the day.   The Natural Gas and New York arabica Coffee markets ended the day on a positive note, while the Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.86% lower; to see this index registered at 406.81.   The day starts with the U.S. Dollar near steady and trading at 1.258 to Sterling, at 1.137 to the Euro and with the dollar buying 3.918 Brazilian Real. 

The London market started the day yesterday on a softer note, while the New York market started the day trading in modest positive territory and with the markets maintaining this mixed stance, into the early afternoon trade.  As the afternoon progressed the London market remained under pressure and extended its losses, while the New York market maintained its buoyancy.   The London market did though manage to bounce back partially from its lows and the New York market to extend its gains, for later in the day trade. 

The London market ended the day on a negative note and with 37.5% of the earlier relatively modest losses of the day intact, while the New York market ended the day on a positive note and with 87.5% of the earlier gains of the day intact.   This close despite some corrective buoyancy for the New York market does little to inspire confidence, but perhaps the news of the increased short sold nature of the New York market might assist to ease the prospects for further speculative selling pressure, to set the markets for a steady start for early trade today.  Against the prices set yesterday, as follows: 

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

                                                                        DEC    100.45 + 1.65

JAN    1524 – 9                                               MAR   105.15 + 1.05

MAR   1548 – 6                                               MAY   108.30 + 1.10

MAY   1559 – 8                                                JUL    111.00 + 1.10

JUL    1575 – 8                                                SEP    113.65 + 1.10

SEP    1591 – 8                                                DEC   117.35 + 1.15

NOV   1608 – 8                                                MAR   121.00 + 1.15

JAN    1624 – 6                                                MAY   123.45 + 1.15

MAR   1636 – 6                                                JUL    125.85 + 1.15

MAY   1657 – 6                                                SEP    128.15 + 1.10

JUL    1669 – 6                                                DEC    131.20 + 1.10


Coffee Market Report December 10 2018

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market move back into a net short sold position within the market during the week of trade leading up to Tuesday 4th. December; to register a short-sold position of 1,126 Lots on the day.  This net short position which is the equivalent of 187,667 bags has most likely been further extended, following the softer track that the market took for the second half of last week. 

The Colombian Coffee Federation have voiced their concerns on Friday, over the negative effects of the prevailing soft nature of the reference prices of the New York market, upon the ability of their farmers to remain profitable and to afford the necessary farm inputs to maintain yields.   The report estimates that the present internal market farm gate prices that are dictated by the available export prices from the consumer market, are already below cost of production for many farmers. 

They note that there is a state coffee farm subsidy scheme available, but this would only kick in at a time that internal market prices fall a further 5.53% from the present internal market price levels, which leaves many farmers in a very difficult situation.   Making them fear that the lack of unaffordable inputs might impact on yields for many farmers and ultimately, make it difficult for Colombia to maintain annual crops of around 14 million bags. 

This price problem is of course not unique to Colombia but is a problem for the relatively high cost washed arabica coffee farmers globally and with most countries, not having any state assistance trigger levels to come into play and provide support.   Which with the coffee market fundamentals presently pointing towards surplus supply and relatively soft prices for the coming year, is most likely going to have some longer-term impact upon global washed arabica coffee supply for 2020. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 33.61 usc/Lb., while this equates to 32.29% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 999 bags Friday; to register these stocks at 2,453,940 bags.  There was meanwhile a larger in number 3,971 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 86,791 bags. 

The commodity markets had an overall positive day on Friday, to see the overall macro commodity index on a positive track for the day.   The Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Coffee markets ended the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.28% higher; to see this index registered at 410.34.   The day starts with the U.S. Dollar near steady and trading at 1.274 to Sterling, at 1.143 to the Euro and with the dollar buying 3.907 Brazilian Real. 

The London and New York markets started the day on Friday with immediate buoyancy, to take a positive track into the early afternoon trade.  As the afternoon progressed though both markets started to come under selling pressure and slipped back into negative territory and with speculative selling in terms of negative over supply coffee fundamentals having a particular influence within the New York market, which experienced heavier losses for the day. 

The London market ended the day on a negative note and with 818% of the earlier relatively modest losses of the day intact, while the New York market likewise ended the day on a negative note and with 88.1% of the earlier losses of the day intact.   This close does little to inspire confidence and is likely to set the markets for at best a steady start for early trade today, against the prices set on Friday, as follows: 

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

                                                                        DEC      98,80 – 1.85

JAN    1533 – 12                                             MAR   104.10 – 1.85

MAR   1554 – 9                                               MAY   107.20 – 1.90

MAY   1567 – 10                                              JUL    109.90 – 1.90

JUL    1583 – 9                                                SEP    112.55 – 1.85

SEP    1599 – 9                                                DEC   116.20 – 1.85

NOV   1616 – 7                                                MAR   119.85 – 1.85

JAN    1630 – 7                                                MAY   122.30 – 1.85

MAR   1642 – 8                                                JUL    124.70 – 1.85

MAY   1663 – 7                                                SEP    127.05 – 1.65

JUL    1675 – 7                                                DEC    130.10 – 1.50


Coffee Market Report December 07 2018

The first week of December and following good overall rains for the main coffee districts in Brazil over the past two months, has experienced further rains for many of the coffee districts.   This is all assisting to build up ground water retention levels and the development of the budding new crop cherries, towards the next 2019 coffee crop. 

The Chief Executive of Brazil’s leading coffee roasting companies 3 Corações, has reported that Brazil had a record coffee harvest this year, of 60 million bags.   However, they foresee an approximate 20.5% biennial bearing dip in arabica coffee production for the next 2019 crop, but a 25% increase in conilon robusta coffee for the coming year, to bring to the fore a 2019 crop of approximately 55 million bags. 

This crop they say shall be the largest ever for a biennially bearing off year, but they foresee stability for the internal market coffee prices.   While they also foresee domestic market consumption growth for the coming year and particularly so, for the speciality coffee brands. 

The Agricultural Ministry in Colombia has announced that they intend to carry on with their coffee farm renovation program, which has been ongoing for some years now, with the finance of the replacement of aged trees with new disease resistant and higher yielding trees.   Estimating that this program would assist the country to increase its production of fine washed arabica coffees by approximately 3 million bags or 20% over the next five year, to target annual coffee crops of approximately 17 million bags per annum. 

There are reports of some degree of internal market price resistance in Vietnam for their mostly robusta coffee new crop coffees, which has traders in Ho Chi Minh City individually speculating December coffee exports that range between 1.67 million bags and 3 million bags. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.05 usc/Lb., while this equates to 33.08% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 1,915 bags yesterday; to register these stocks at 2,452,941 bags.  There was meanwhile a larger in number 11,770 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 82,820 bags. 

The commodity markets and despite the U.S. dollar coming off the boil a little yesterday were mostly on the back foot for the day, to see the overall macro commodity index taking a softer track for the day.   The Cocoa and Gold markets ended the day on a positive note and the New York arabica coffee ended the day on a steady note, while the Oil, Natural Gas, Sugar, London robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.95% lower; to see this index registered at 405.17.   The day starts with the U.S. Dollar steady and trading at 1.276 to Sterling, at 1.137 to the Euro and with the dollar buying 3.878 Brazilian Real. 

The London market started the day yesterday on a softer note and New York market started the day trading close to par, with the markets retaining this stance into the early afternoon trade.   As the afternoon progressed and with the negative influences of the negative nature of the overall macro commodity index and a weakening Brazil Real, the New York market started to come under pressure and to head south to join the London market within negative territory and with the London market losing a little more weight.  The Brazil Real did however bounce back from the lows and while the London market continued to trade on something of a soft sideways track, the recovery of the Brazilian currency seemingly assisted for the New York market to recover back to par for late trade. 

The London market ended the day on a near to negative note and with 81% of the earlier losses of the day intact, while the New York market that had dipped to post losses of 1.50 usc/Lb. recovered back into positive territory, but finally to end the day on par for the active second delivery month.   This close and with the ability for the New York market to bounce back from its lows might assist towards some degree of caution and hesitancy, which might set the markets for a steady and perhaps even modestly buoyant start for early trade today.   Against the prices set yesterday, as follows: 

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

                                                                        DEC    100.65 – 0.30

JAN    1545 – 11                                             MAR   105.95 unch

MAR   1563 – 17                                             MAY   109.10 + 0.25

MAY   1577 – 16                                              JUL    111.80 + 0.30

JUL    1592 – 17                                              SEP    114.40 + 0.30

SEP    1608 – 16                                              DEC   118.05 + 0.30

NOV   1623 – 15                                              MAR   121.70 + 0.35

JAN    1637 – 15                                              MAY   124.15 + 0.35

MAR   1650 – 13                                              JUL    126.55 + 0.40

MAY   1670 – 11                                              SEP    128.70 + 0.40

JUL    1682 – 11                                              DEC    131.60 + 0.40


Coffee Market report December 06 2018

The National Coffee Growers Federation in Colombia have forecast that they foresee that the countries coffee production shall remain at close to 14 million bags, for the coming year.   Noting that so long as the possible new El Niño phenomenon is to develop is modest in intensity and bring with it slightly dryer weather, that it would be a positive factor for coffee production yields. 

The Ivory Coast have reported that the country exported 63,084 bags or 210.05% more coffee during the month of October than the same month last year, at a total of 93,117 bags.  This has contributed to the country’s cumulative exports for the first ten months of this year, to be 328,650 bags or 53.29% higher than the same period last year, at a total of 945,383 bags. 

This report confirms that the Ivory Coast as West Africa’s largest coffee producer and the second largest African robusta coffee producer, is well on track to exceed the forecast 1.1 million bags of coffee exports for 2018.   While it would confirm that despite the soft nature of the refence prices of the international coffee market, that there has not been much internal market price resistance. 

There remains nothing in the way of supportive fundamental news for the coffee markets, with weather conditions over the majority of coffee producers remaining neat to perfect.   While with a surplus coffee supply forecast for the present October 2018 to September 2019 coffee year, it is only the prospects for an approximately 3.2 million to 3.5 million bags of global coffee consumption growth per annum, that can be seen to be a longer-term positive factor for the coffee markets. 

But with the perspective that the present surplus supply coffee year due to add in excess of 6 million bags of coffee to the global coffee stocks, the prospects for increasing consumption to be market supportive is a factor that might only be something to consider in 2020.  Leaving the short to medium term fortunes of the coffee farmers globally, very much in the hands of the forthcoming weather conditions with the tropics which so far, show no signs of threat.  

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 34.28 usc/Lb., while this equates to 32.35% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 275 bags yesterday; to register these stocks at 2,454,856 bags.  There was meanwhile a larger in number 33,533 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 71,050 bags. 

The commodity markets and with many U.S. players side-lined for a national day of mourning yesterday, had a quiet and generally lacklustre day of trade, to see the overall macro commodity index taking a modestly softer track for the day.  The Cotton, Copper and Soybean markets ended the day on a positive note and the London robusta Coffee market ended the day on a near to steady note, while the Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn, Gold and Silver markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.18% lower; to see this index registered at 409.05.   The day starts with the U.S. Dollar steady and trading at 1.270 to Sterling, at 1.134 to the Euro and with the dollar buying 3.868 Brazilian Real. 

The London and New York markets started the day yesterday trading quietly close to par, but while the New York market remained mostly close to par, the London market attracted selling pressure and slipped back into negative territory and into the early afternoon trade.  As the afternoon progressed both markets attracted support and moved up into positive territory, but this was short lived and both markets slipped back to once again trade around par and while the London market managed to take something of a sideways close to par track, the New York market came under pressure and moved down into negative territory. 

The London market ended the day on a near to steady note and with only 16.6% of the very modest losses of the day intact, while the New York market ended the day on a negative note and with 70.4% of the earlier losses of the day intact.   This close assists to paint something of a negative picture for the charts and one might expect little better than a near to steady start for early trade today.  Against the price set yesterday, as follows: 

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

                                                                        DEC    100.95 – 0.95

JAN    1556 unch                                           MAR   105.95 – 0.95

MAR   1580 – 1                                               MAY   108.85 – 0.95

MAY   1593 – 2                                                JUL    111.50 – 0.95

JUL    1609 – 2                                                SEP    114.10 – 1.00

SEP    1624 – 1                                                DEC   117.75 – 1.05

NOV   1638 – 2                                                MAR   121.35 – 1.05

JAN    1652 – 2                                                MAY   123.80 – 1.05

MAR   1663 – 3                                                JUL    126.15 – 1.05

MAY   1681 – 3                                                SEP    128.30 – 1.05

JUL    1693 – 3                                                DEC    131.20 – 1.05


Coffee Market Report December 05 2018

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of November was 4,000 bags or 0.31% lower than the same month last year, at a total of 1,300,000 bags.   This has contributed to the countries cumulative production for the first two months of the present October 2018 to September 2019 coffee year to be 9,000 bags or 0.38% higher than the same period in the previous coffee year, at a total of 2,386,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of November were 84,000 bags or 7.19% lower than the same month last year, at a total of 1,253,000 bags.   This has contributed to the country’s cumulative coffee exports for the first two months of the present October 2018 to September 2019 coffee year to be 5,000 bags or 0.22% higher than the same period in the previous coffee year, at a total of 2,329,000 bags. 

Many coffee districts in Central America have experienced spells of unseasonal wet and cold weather over the past couple of months, which has delayed the coffee cherries from coming to maturity and there has been a slow start to the delivery of new crop coffees and likewise, delays in early crop export shipments.  This factor albeit that some degree of internal market price resistance could have also played a part, can be noted in terms of the reports from the National Coffee Institutes in Honduras and Costa Rica, who have both reported relatively modest coffee export numbers for the month of November. 

The National Coffee Institute in Honduras has reported that the countries coffee exports for the month of November were 47,160 bags or 28.5% lower than the same month last year, at a total of 118,303 bags.  While the National Coffee Institute in Costa Rica has reported that the countries coffee exports for the month of November were 33.5% lower than the same month last year, at a total of 22,630 bags. 

The respected U.S. Department of Agriculture Foreign Agricultural Service have increased by 1.67% their forecast for the new Vietnam coffee crop, which they now foresee to be 30.4 million bags.   This number would be 1.1 million bags or 3.75% higher than their assessment of the countries previous October 2017 to January 2018 harvest, which they had assessed to have been 29.3 million bags. 

The Australian Bureau of Meteorology has reported that the conditions in the Pacific Ocean remain close to neutral and have remained so for the past month, but they still see a possibility that a new El Niño phenomenon could develop for the coming months.  But seemingly it is only a possibility and not yet, a probability and thus, the El Niño factor is not being seen to be a threatening and price supportive weather factor for the coffee markets. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 35.19 usc/Lb., while this equates to 32.92% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 4,675 bags yesterday; to register these stocks at 2,455,131 bags.  There was meanwhile a smaller in number 3,585 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,517 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 80,667 bags or 4.63% over the week of trade leading up to Monday 3rd. December, to register these stocks at 1,660,667 bags. 

The commodity markets had a mixed day yesterday and despite a robust U.S. dollar to see many markets showing some degree of buoyancy, which assisted for a modest positive track for the overall macro commodity index for the day.  The Natural Gas, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Oil, Sugar, Cocoa, Coffee, Cotton and Copper markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% higher; to see this index registered at 409.8.   The day starts with the U.S. Dollar showing some early muscle and trading at 1.269 to Sterling, at 1.132 to the Euro and with the dollar buying 3.852 Brazilian Real. 

The London and New York markets started the day yesterday with modest buoyancy, but with both markets drifting back to par and beneath par, for the early afternoon trade.   As the afternoon progressed the markets added to the losses of the day before both markets briefly bounced back to trade around par, before once again coming under pressure and heading on towards a soft close for the day. 

The London market ended the day on a negative note and with 81.8% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with only 50% of the earlier losses of the day intact.   This close assists to paint something of a negative picture for the charts and accompanied by dollar buoyancy, one might expect little better than a near to steady start for early trade today.  Against the price set yesterday, as follows: 

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

                                                                        DEC    101.90 – 1.60

JAN    1556 – 10                                             MAR   106.90 – 0.90

MAR   1581 – 9                                               MAY   109.80 – 0.90

MAY   1595 – 10                                              JUL    112.45 – 0.90

JUL    1611 – 8                                                SEP    115.10 – 0.90

SEP    1625 – 8                                                DEC   118.80 – 0.90

NOV   1640 – 6                                                MAR   122.40 – 0.85

JAN    1654 – 4                                                MAY   124.85 – 0.80

MAR   1666 – 3                                                JUL    127.20 – 0.80

MAY   1684 – 3                                                SEP    129.35 – 0.80

JUL    1696 – 3                                                DEC    132.25 – 0.80


Coffee Market Report December 04 2018

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 6.62% over the week of trade leading up to Tuesday 27th. November; to register a new net short sold position of 27,999 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1.55%, to register a net long position of 43,376 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 0.37%; to register a new net short sold position of 38,971 Lots. This net short-sold position which is the equivalent of 11,048,106 bags has most likely been further increased, following the period of mixed but overall softer trade that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The International Coffee Organisation ICO have reported that the global coffee exports for the month of October were 17% higher than the same month last year, at a total of 10.41 million bags.  These exports related to a 13.1% increase in arabica coffee exports and a 25.3% increase in robusta coffee exports, with the ratio of 65 to 35 of arabica and robusta coffee exports. 

The Indonesian 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 of November were 96,085 bags or 43.19% lower than the same month last year, at a total of 126,375 bags.   This has contributed to the islands cumulative robusta coffee exports for the first two months of the present October 2018 to September 2019 coffee year to be 119,768 bags or 21.6% lower than the same period in the previous coffee year, at a total of 434,715 bags. 

The Ministry of Trade in Brazil have reported that the countries coffee exports for the month of November were 1,196,961 bags or 44.4% higher than the same month last year, at a total of 3,892,710 bags.  This surge in exports which includes good volumes of conilon robusta coffees that were not available for export at this time last year, underpins the view that Brazil has just experienced a bumper surplus coffee crop this year. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.68 usc/Lb., while this equates to 33.1% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 1,680 bags yesterday; to register these stocks at 2,450,456 bags.  There was meanwhile a larger in number 4,040 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 41,102 bags. 

The commodity markets had a mixed day yesterday but with many markets post the weekend agreement between the U.S.A. and China to delay a decision on increased import tariffs experiencing a day of buoyancy, to see the overall macro commodity index taking an upside track for the day.  The Oil, Sugar, New York arabica Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note and the Cocoa market was near to steady for the day, while the Natural Gas, London robusta Coffee and Orange Juice markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.07% higher; to see this index registered at 409.2.   The day starts with the U.S. Dollar near to steady and trading at 1.275 to Sterling, at 1.138 to the Euro and with the dollar buying 3.841 Brazilian Real. 

The London and New York markets started the day yesterday with immediate buoyancy and with the New York market soon adding further value, following the sharp losses of Friday.  The markets maintained this positive structure and with particularly good gains for the New York market into the early afternoon trade and with the New York market attracting buy stops and adding further value and peaking at gains of 3.30 usc/Lb., before starting to attract stronger selling pressure.   Both the markets floundered in late trade and with the London market falling back into negative territory and the New York market to par, with the latter market managing to add back some modest gains by the close. 

The London market ended the day on a negative note and with 100% of the earlier losses of the day intact, while the New York market ended the day on a modestly positive note and with only 7.6% of the earlier gains of the day intact.   This close and with the markets having been unable to hold on to the earlier positive stance of the day is unlikely to inspire confidence, but one might think that there shall nevertheless be some hesitancy and that the markets be due for a cautious steady start for early trade today.  Against the prices set yesterday, as follows: 

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

                                                                        DEC    103.50 + 0.25

JAN    1566 – 14                                             MAR   107.80 + 0.25

MAR   1590 – 9                                               MAY   110.70 + 0.25

MAY   1605 – 7                                                JUL    113.35 + 0.20

JUL    1619 – 6                                                SEP    116.00 + 0.25

SEP    1633 – 5                                                DEC   119.70 + 0.25

NOV   1646 – 5                                                MAR   123.25 + 0.25

JAN    1658 – 5                                                MAY   125.65 + 0.25

MAR   1669 – 7                                                JUL    128.00 + 0.25

MAY   1687 – 6                                                SEP    130.15 + 0.25

JUL    1699 – 6                                                DEC    133.05 + 0.20


Coffee Market Report December 03 2018

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 short sold position within the market by 0.37% over the week of trade leading up to Tuesday 27th. November; to register a new net short sold position of 38,971 Lots.   This net short-sold position which is the equivalent of 11,048,106 bags has most likely been increased, following the sharp selloff in the market to end last week. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market increase move into a net long position within the market during the week of trade leading up to Tuesday 27th. November; to register a net long position of 1,556 Lots on the day.  This net long position which is the equivalent of 259,333 bags has most likely been once again eroded and the market back into net short sold status, following the softer track that the market took for the second half of last week. 

The respected analysts Fitch Solutions were reported on Reuters on Friday to have forecast that due to the prospects for a biennially bearing lower new crop from Brazil next year that there shall be some degree of buoyancy due for the New York market in 2019, but with the prices for the New York market still only due to average around 120 usc/Lb.   This report one would suggest in terms of its forecast for what would be considered to be loss making price levels for many arabica coffee producers for the coming year, is a troubling one for the producer sector of the market. 

It is however not a shock for most within the industry, as with the prevailing near perfect weather conditions for the majority of coffee producers and including Brazil, the prospects are for another year of surplus coffee supply.   A factor that with the general assessment that there is already an approximate 8 million to 10 million bags surplus coffee supply for the present October 2018 to September 2019 coffee year and with the resulting increase in global coffee stocks, contributes to longer term bearish sentiment. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 35.02 usc/Lb., while this equates to 32.56% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 1,319 bags on Friday; to register these stocks at 2,448,776 bags.  There was meanwhile a larger in number 8,845 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,062 bags. 

The commodity markets encountered dollar buoyancy and had a mixed day on Friday and with many markets on the back foot, to see the overall macro commodity index taking a marginally softer track for the day.  The Cocoa, Cotton, Wheat, Corn and Soybean markets ended the day on a positive note, while the Oil, Natural Gas, Sugar, Coffee, Copper, Orange Juice, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.21% lower; to see this index registered at 404.88.   The day starts with the U.S. Dollar near to steady and trading at 1.278 to Sterling, at 1.137 to the Euro and with the dollar buying 3.866 Brazilian Real. 

The London and New York markets started the day on Friday, trading on a modestly negative note, but with the New York market soon moving back to par and to see the markets taking this stance into the early afternoon trade.   As the afternoon progressed and with the Brazil Real turning softer, the New York market moved back into negative territory and with the London market turning softer and with the New York market soon triggering sell stops, to significantly accentuate its losses.   This set both the markets, for a dismal end for the week.

The London market ended the day on a very negative note and with 92.9% of the earlier losses of the day intact, while the New York market ended the day on a likewise very negative note and with 94.1% of the earlier losses of the day intact.   This rather dramatic selloff of the markets and with the New York market in particular suffering from a technical readjustment against the bearish fundamentals that prevail, paints a negative picture for the charts and does little to inspire confidence.   But markets in general are reacting positively to the temporary trade deal between the U.S.A. and China over the weekend and one might think that there shall be some degree of hesitancy due for early trade today and the possibility of some stability and modest buoyancy for the markets, against the soft prices set on Friday, as follows. 

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

                                                                        DEC    103.25 – 5.25

JAN    1580 – 29                                             MAR   107.75 – 4.75

MAR   1599 – 26                                             MAY   110.45 – 4.70

MAY   1612 – 26                                              JUL    113.15 – 4.65

JUL    1625 – 25                                              SEP    115.75 – 4.60

SEP    1638 – 24                                              DEC   119.45 – 4.50

NOV   1651 – 24                                              MAR   123.00 – 4.50

JAN    1663 – 24                                              MAY   125.40 – 4.50

MAR   1676 – 24                                              JUL    127.75 – 4.50

MAY   1693 – 24                                              SEP    129.90 – 4.50

JUL    1705 – 24                                              DEC    132.85 – 4.50


Coffee Market Report November 30 2018

The respected United States Department of Agriculture’s Foreign Agricultural Service have forecast that Colombia shall see coffee production for the new October 2018 to September 2019 coffee year increase by 476,000 bags or 3.44%, to total 14.3 million bags.   This they estimate shall result in bean coffee exports for the coffee year of 12,314,000 bags and exports of value-added roast and ground and soluble coffee, to the equivalent of 985,000 bags. 

The coffee districts in Brazil are reported to have had good rains during the month of November, which has been conducive to the setting of the next new 2019 coffee crop.   With the forecast for mixed but overall fair rains for the coming month of December, which presently eliminates any possibility of weather fears in terms of longer-term Brazil coffee supply.   Which is a forecast that contributes towards the bearish sentiment, on the part of the speculative sectors and the consumer industry sectors of the market. 

Meanwhile the worlds largest coffee cooperative Cooxupé in Brazil have voiced fears that due to good rains and sometimes multiple flowerings that the next crop shall have cherries maturing at different times and this as most farmers strip harvest, shall increase the percentages of lower quality coffees.   But one might comment that while this might be the case, the country with a domestic consumption of in excess of 21 million bags per annum and a domestic industry that can utilise secondary grade coffees, that this should not negatively affect the availability of acceptable coffees for the consumer markets.  

The physical coffee market for arabica coffees and with many producers still trying to resist the negative price dictates of the coffee terminal markets and many consumer industries complacent for the present, remains lacklustre for the present.   While aside from some speculation that follows the fortunes of the value of Brazil Real that comes to the fore to direct the New York arabica coffee market, there really is nothing in the way of fundamental news to support the market. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 38.59 usc/Lb., while this equates to 34.36% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 280 bags yesterday; to register these stocks at 2,450,095 bags.  There was meanwhile a similar in number 285 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,907 bags. 

The commodity markets had a mixed day yesterday and with this contributing to an erratic day, for the overall macro commodity index.   The Oil, Sugar, Cocoa and Orange Juice markets ended the day on a positive note and the Corn and Gold markets ended the day on a relatively steady note, while the Natural Gas, Coffee, Cotton, Copper, Soybean and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% lower; to see this index registered at 405.73.   The day starts with the U.S. Dollar steady and trading at 1.279 to Sterling, at 1.139 to the Euro and with the dollar buying 3.851 Brazilian Real. 

The London market started the day yesterday trading mostly to the positive side of par, while the New York market started the day on the negative side of par and with the markets taking something of an erratic sideways stance and trading around par, into the early afternoon trade.  As the afternoon progressed both the markets attracted support and moved up into positive territory but this was short lived and the New York market came under pressure and move down into negative territory, while the London market moved back to trade around par before finally following the New York market south.  Setting the markets for soft end to the day. 

The London market ended the day on a negative note and with 45.4% of the earlier losses of the day intact, while the New York market ended the day on a more negative note and with 80% of the earlier losses of the day intact.   This close does little to inspire confidence and one might expect to see another 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. 

                                                                        DEC    108.50 – 1.60

JAN    1609 – 6                                               MAR   112.30 – 1.60

MAR   1625 – 5                                               MAY   115.15 – 1.55

MAY   1638 – 6                                                JUL    117.80 – 1.55

JUL    1650 – 8                                                SEP    120.35 – 1.55

SEP    1662 – 9                                                DEC   123.95 – 1.55

NOV   1675 – 9                                                MAR   127.50 – 1.55

JAN    1687 – 10                                              MAY   129.90 – 1.50

MAR   1700 – 10                                              JUL    132.25 – 1.50

MAY   1717 – 8                                                SEP    134.40 – 1.50

JUL    1729 – 8                                                DEC    137.35 – 1.45


Coffee Market Report November 29 2018

The General Statistics Office in Vietnam and with the month of November coming to a close, have estimated that coffee exports for the month shall be approximately 2.33 million bags, which shall be worth approximately 264 million U.S. Dollars.   This they say shall contribute to the country’s cumulative coffee exports for the first eleven months of this year to be approximately 23% higher than the same period last year, at a total of 28.75 million bags. 

They do however highlight the negative effects of the prevailing soft international coffee prices in that while they report a 23% increase in the volume of coffee exports over these eleven months, that the revenue from these exports is only 2.9% higher than the same period last year, at approximately 3.3 billion U.S. Dollars.  This issue being a concern for Vietnam's mostly robusta coffee farmers, but with good farming practices and the resulting high yields, the countries coffee farmers remain mostly profitable. 

This is however not the case for coffee farmers within many other coffee producer nations globally, where the dictates of the reference prices of the coffee terminal markets, are forcing many farmers to liquidate new crop coffee stocks at loss making prices.   This factor and with many coffee farmers globally lacking the finance to provide the full range of inputs to support good yielding production for the coming year, shall most likely have a longer-term negative effect upon global coffee supply. 

But one would speculate that so long as there are good weather conditions over the Brazil coffee districts and so far, all indications are that this shall be the case, that Brazil is due another bumper coffee crop for 2019.   Thus with the efficient and still mostly profitable Brazilian coffee farmers unlikely to struggle to provide the inputs to support their next crop and along with Vietnam's farmers doing the same, the negative effects of the low prices upon global coffee production might only start to impact in the year after next. 

The Ugandan Coffee Development Authority UCDA have reported that the countries coffee exports for the month of October were 30,893 bags or 8.09% lower than the same month last year, at a total of 350,743 bags.  The dip in export volumes they appropriate to the lower crop volumes that are being experienced, within the south western coffee districts in the country. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 39.96 usc/Lb., while this equates to 35.08% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 4,703 bags yesterday; to register these stocks at 2,450,375 bags.  There was meanwhile a smaller in number 1,925 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 45,622 bags. 

The commodity markets encountered a softening U.S. dollar yesterday, to see a number of markets showing some degree of buoyancy and to see the overall macro commodity index taking an upside track for the day.  The Natural Gas, Sugar, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Oil, Cocoa and London robusta Coffee markets ended the day on a negative note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.91% higher; to see this index registered at 406.88.   The day starts with the U.S. Dollar steady and trading at 1.284 to Sterling, at 1.138 to the Euro and with the dollar buying 3.851 Brazilian Real. 

The London and New York markets started the day yesterday trading with a degree of buoyancy, but with the markets coming under pressure into the afternoon trade and moving down into negative territory and with the New York market posting losses of 1.90 usc/Lb., before bouncing off the lows.   The New York market and perhaps with some assistance coming from the positive nature of the overall macro commodity index and the marginally firmer Brazil Real to the dollar contributing towards some more positive sentiment, managed to work its way back up into positive territory, while the London market and with the perspective of good volumes of selling due from Vietnam, remained in negative territory. 

The London market ended the day on a negative note and with 85% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 70.6% of the earlier gains of the day intact.   The recovery in the New York market remains though under a cloud of negative fundamentals, which is not conducive towards confidence and one might think that there shall be some degree of hesitancy due for early trade today, to set the markets for only a near to steady start for early trade.   Against the prices set yesterday, as follows: 

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

                                                                        DEC    110.10 + 0.60

JAN    1615 – 30                                             MAR   113.90 + 0.60

MAR   1630 – 17                                             MAY   116.70 + 0.55

MAY   1644 – 15                                              JUL    119.35 + 0.60

JUL    1658 – 13                                              SEP    121.90 + 0.55

SEP    1671 – 12                                              DEC   125.50 + 0.55

NOV   1684 – 12                                              MAR   129.05 + 0.55

JAN    1697 – 13                                              MAY   131.40 + 0.50

MAR   1710 – 14                                              JUL    133.75 + 0.50

MAY   1725 – 14                                              SEP    135.90 + 0.50

JUL    1737 – 14                                              DEC    138.80 + 0.55


Coffee Market Report November 28 2018

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease their net short sold position within the market by 4.01% over the week of trade leading up to Tuesday 20th. November; to register a new net short sold position of 26,261 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.74%, to register a net long position of 44,062 Lots on the day. 

This follows the report that the Non-Commercial Speculative sector of this market decreased their net short sold position within the market by 8.03% over the week of trade leading up to Tuesday 20th. November; to register a new net short sold position of 38,825 Lots.   But following the period of mixed but overall more negative trade that has since followed, these short positions have most likely been modestly increased again. 

The respected analysts Allied Market Research are reported to have foreseen that the growing single serve coffee pod and capsule market in China is due to increase by over 185%, over the next seven years.  This forecast that is within the body of their overall Asia-Pacific Coffee Pod and Capsule Market Report, has the overall regional growth for Pods and Capsules over the same period at a more modest over 149% growth, but it is nevertheless and impressive growth factor. 

This report tends to underpin the vibrant coffee market that is developing in China as does the fact that the recent Hainan International Coffee and Beverages Expo have coffee participation taking a prominent position, within the host of attendees and exhibitors.   With 155 coffee companies from 28 different countries, reported to have exhibited within the expo.   Indicating that the coffee shop culture which is assisting to inspire a general coffee culture in most Asian countries, is due to sharply increase Chinese coffee consumption levels and demand and likewise, that of Asia in general. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 38.59 usc/Lb., while this equates to 34.06% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen increase by 480 bags yesterday; to register these stocks at 2,455,078 bags.  There was meanwhile a larger in number 13,384 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,547 bags. 

The commodity markets encountered further dollar buoyancy yesterday, to see a number of markets under pressure and to influence a marginally softer track for the overall macro commodity index for the day.   The Oil, Cocoa, Coffee, Corn and Soybean markets ended the day on a positive note and the Natural Gas, Sugar, Cotton, Copper, Orange Juice, Wheat, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3% lower; to see this index registered at 403.20.   The day starts with the U.S. Dollar steady and trading at 1.275 to Sterling, at 1.129 to the Euro and with the dollar buying 3.875 Brazilian Real. 

The London market started the day yesterday trading in negative territory and the New York trading around par, but with the Brazil Real starting to add some degree of muscle the New York market soon moved up into positive territory and to see the markets taking a mixed stance, into the early afternoon trade.   As the afternoon progressed and with the New York market remaining in positive territory, the London market recovered to trade around par and followed by buy stops coming into play to trigger a modest rally within the New York market and a move by the London market into modest positive territory.   The New York market did however hit something of ceiling and shed some of its gains of the day, in late trade. 

The London market ended the day on a positive note and with 70% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 70.4% of the earlier gains of the day intact.   The recovery in the New York market being related to only the sentiment that comes with some stability for the Brazil Real does not with the prevailing bearish fundamentals for the markets indicate any reason for significant gains in value, which would make one think that the markets are due for only a hesitant near to steady start for early trade today.   Against the prices set yesterday, as follows: 

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

                                                                        DEC    109.50 + 2.50

JAN    1645 + 8                                               MAR   113.30 + 2.50

MAR   1647 + 7                                               MAY   116.15 + 2.50

MAY   1659 + 7                                                JUL    118.75 + 2.45

JUL    1671 + 7                                                SEP    121.35 + 2.40

SEP    1683 + 6                                                DEC   124.95 + 2.35

NOV   1696 + 7                                                MAR   128.50 + 2.30

JAN    1710 + 8                                                MAY   130.90 + 2.30

MAR   1724 + 8                                                JUL    133.25 + 2.30

MAY   1739 + 3                                                SEP    135.40 + 2.30

JUL    1751 unch                                             DEC    138.25 + 2.30


Coffee Market Report November 27 2018

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 short sold position within the market by 8.03% over the week of trade leading up to Tuesday 20th. November; to register a new net short sold position of 38,825 Lots.   This net short-sold position which is the equivalent of 11,006,715 bags has most likely been marginally increased again, following the period of mixed but overall more negative trade, that has since followed. 

Tropical Storm Usagi has passed over southern Vietnam and headed into Cambodia yesterday, bringing with it torrential rains and has interrupted the new crop harvest, with the London market reacting to the potential delays of new crop coffees with a positive stance for the days trade.   But one would speculate that there are already sufficient coffee stocks from the new crop in hand to satisfy short term export commitments, with the potential for the new crop harvest to continue in only a few days’ time. 

At a presentation on the forthcoming Vietnam Coffee Day 2018 that shall take place over the 11th. and 12th. December in Gia Nghia town in Dak Nong province, the Chairman of the Vietnam Coffee and Cocoa Association VICOFA has forecast that the country shall export approximately 28.33 million bags of coffee during 2018.   The forecast in line with earlier statements, by officials in the country. 

While with an already a relatively large value adding coffee processing industry in play within the country, the Ministry of Agriculture and Rural Development and with many new processing plants coming into production, has forecast that the possibility for Vietnam to be processing as much as 25% of the country’s coffee crop into soluble and roast coffees for export, by 2020. 

This forecast might in terms of available international mostly no name brands markets for origin processed coffees be a bit ambitious, but there is no doubt that Vietnam is bringing to the fore aggressive price competition for the traditional soluble coffee producer exporters, such as Brazil, India, Colombia and Ecuador.    

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.41 usc/Lb., while this equates to 32.86% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen decrease by 845 bags yesterday; to register these stocks at 2,454,598 bags.  There was meanwhile a larger in number 34,570 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 60,931 bags. 

The commodity markets encountered dollar buoyancy yesterday, to see a number of markets under pressure and to influence a marginally softer track for the overall macro commodity index for the day.   The Oil, Sugar, London robusta Coffee, Cotton, and Wheat markets ended the day on a positive note and the Gold and Silver markets on a near to steady note, while the Natural Gas, Cocoa, New York arabica Coffee, Copper, Orange Juice, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.07% lower; to see this index registered at 404.42.   The day starts with the U.S. Dollar steady and trading at 1.281 to Sterling, at 1.134 to the Euro and with the dollar buying 3.839 Brazilian Real. 

The London and New York markets started the day yesterday trading around par, with both markets picking up support and moving into positive territory for the early afternoon trade.  As the afternoon progressed and with some speculation over rain delays for the new Vietnam harvest and for export shipments out of Ho Chi Minh City, the London market attracted additional support and value.  However, with the Brazil Real losing value and providing the perception for increased selling out of Brazil, the New York market came under pressure and moved back into modest negative territory and to see the markets heading towards a mixed close for the day. 

The London market ended the day on a very positive note and with 95.8% of the earlier gains of the day intact, while the New York market ended the day on a modestly negative note, but having recovered 88% of the earlier modest losses of the day by the close.  The day is starting with an even softer Brazil Real which is unlikely to inspire confidence for the markets and with the effects of the tropical storm in Vietnam abating, it is probably going to influence a modestly softer start for early trade today.   Against the prices set yesterday, as follows: 

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

NOV   1574 unch                                            DEC   107.00 – 0.15

JAN    1637 + 26                                             MAR   110.80 – 0.15

MAR   1640 + 23                                             MAY   113.65 – 0.15

MAY   1652 + 23                                              JUL    116.30 – 0.20

JUL    1664 + 23                                              SEP    118.95 – 0.15

SEP    1677 + 23                                              DEC   122.60 – 0.10

NOV   1689 + 23                                              MAR   126.20 – 0.10

JAN    1702 + 23                                              MAY   128.60 – 0.10

MAR   1716 + 23                                              JUL    130.95 – 0.10

MAY   1736 + 23                                              SEP    133.10 unch


Coffee Market Report November 26 2018

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market increase their net short sold position within this market by 8.7% during the week of trade leading up to Tuesday 20th. November; to register a net short sold position of 300 Lots on the day.  This net short sold position which is the equivalent of 50,000 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall marginally softer trade, which has since followed. 

The new crop coffee harvest in Vietnam that was last week seen to be over 40% complete is presently being interrupted within many districts, as Tropical Storm Usagi and bringing with it heavy rains, is skirting the south of the main central highlands coffee farming districts.   This is however not really seen to be too much of a problem, as there is already a good volume of new crop coffees that have been harvested and the perspective is that this storm shall soon pass and that by later in the week, the new crop harvest shall continue. 

With rising labour costs and low international coffee prices, many if not most Colombian coffee farmers are struggling to make any profit and most likely, there are many that are presently losing money with their new crop coffees.  This has inspired the move towards mechanisation but mostly in the form of vibrating coffee lances to knock ripe cherries off the trees, as the majority of steep hillside coffee farmers cannot make use of the self-drive or towed coffee harvesters that are common in Brazil. 

One might speculate that automated harvesting shall increase the percentages of underripe cherry that shall be harvested and therefore, increase the percentages of lower grades coming from the mechanised coffee farms.  This is for Brazil not so much of a problem, as the country unlike Colombia, has a significant domestic consumption of in excess of 21 million bags per annum, which is friendly to the use of lower priced secondary grade coffees.   But could if these coffee harvesting lances become popular in Colombia, become a problem for the mechanised Colombian coffee farms, to find a reasonable value market for their lower grade coffees. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 37.60 usc/Lb., while this equates to 33.89% price discount for the London Robusta coffee market.  

The Certified washed Arabica coffee stocks held against the New York exchange were seen to be unchanged on Friday; to register these stocks at 2,455,443 bags.  There were though 1,375 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,361 bags. 

Many of the U.S.A. based commodity markets had a thin day on Friday, with many players having taken the day off post Thursday’s Thanksgiving Day public holiday, to enjoy an extended long weekend.  The commodity markets meanwhile encountered some renewed muscle for the U.S. dollar and with the Oil markets further coming under pressure from negative fundamentals, to see most markets most markets taking a softer track for the day and the overall macro commodity index sharply lower for the day.  The Orange Juice and Wheat markets nevertheless ended the day on a positive note and the London robusta Coffee market near to steady for the day, while the Oil and markets were sharply lower and the Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets ended the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.38% lower; to see this index registered at 404.72.   The day starts with the U.S. Dollar near to steady and trading at 1.282 to Sterling, at 1.135 to the Euro and with the dollar buying 3.828 Brazilian Real. 

The London market started the day on Friday trading on a modestly positive note, while the New York market started the day on a softer note and with the markets taking this mixed track, into the early afternoon trade.  As the afternoon progressed the London market added some value and the New York market remained under pressure for a short while, before encountering the influences of a weaker Brazil Real and a softening overall macro commodity index.  This brought with it increasing selling pressure and with the New York market triggering sell stops to accentuate the losses, while the London market slipped back to trade within modest negative territory. 

The London market ended the day on a near to steady note and having recovered 71.4% of the earlier modest losses of the day, while the New York market ended the day on a very negative note and with 83.7% of the earlier losses of the day intact.   This close does not inspire much confidence and one might expect to see only a hesitant and erratic near to steady start due for early trade today, against the prices set on Friday, as follows: 

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

NOV   1574 – 12                                             DEC    107.15 – 3.15

JAN    1611 + 1                                               MAR   110.95 – 3.15

MAR   1617 – 2                                               MAY   113.80 – 3.15

MAY   1629 – 1                                                JUL    116.50 – 3.05

JUL    1641 unch                                            SEP    119.10 – 3.05

SEP    1654 + 2                                                DEC   122.70 – 3.00

NOV   1666 + 2                                                MAR   126.30 – 2.95

JAN    1679 + 2                                                MAY   128.70 – 2.95

MAR   1693 + 2                                                JUL    131.05 – 2.90

MAY   1713 + 2                                                SEP    133.10 – 2.90


Coffee Market Report November 23 2018

Most of the main coffee districts in Brazil have been in receipt of good rains so far this month and with the probability that the month shall end, with most districts having received above average rainfall.  Thus, following good rains in the previous month the prospects for the next 2019 coffee crop are looking good, with speculation that so long as there is normal rainfall for the next five months, that the country shall bring to the fore another large surplus crop in the coming year. 

It is of course early days and with weather conditions globally becoming unpredictable of late, there is always the possibility of damaging weather developing for the Brazil coffee farmers.  But with the only weather phenomenon seemingly on the horizon for the present being the over 70% possibility of a new El Niño and with this usually bringing with it increased rains for South East Brazil, it is unlikely that the Brazil coffee farmers shall suffer from damaging weather ahead of their next 2019 coffee crop. 

While the Centre for Advanced Studies on Applied Economics CEPEA in Brazil and in association with Luiz de Quiroz College of Agriculture and the University of São Paulo have forecast that there might be a modest dip in the size of the Brazil arabica coffee crop next year, due to the negative effects of biennial bearing for some farms.  But they have also forecast that the countries conilon robusta crop that was significantly higher in volume this year, is likely to be equally large and perhaps even larger, for the new 2019 crop. 

In the meantime, traders in Vietnam are estimating that over 40% of the new crop of mostly robusta coffees has been harvested, with the harvest due to peak in the coming couple of weeks and the harvest close to completion by the end of December.  While in terms of the volume of coffee that is due from this new crop, most of the forecasts vary between 29 million 31 million bags, which adds to the perspective for another bumper crop to add to the perspective for a significant global surplus coffee supply for the coming year.  

These reports and forecasts from the world’s two largest coffee producers who dominate the global supply of natural arabica and robusta coffee supply and with nothing in the way of voices of concern in terms of the new crops now starting to come from the large fine washed arabica producer bloc of Mexico, Central America and Colombia, under pin the prevailing bearish sentiment within the coffee markets.   Sentiment that is somewhat extended, by the forecasts for another bumper Brazil coffee crop possibly due to impact in eight months’ time. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.66 usc/Lb., while this equates to 35.64% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange and with the market closed for the Thanksgiving holiday, were unchanged yesterday; to register these stocks at 2,455,443 bags.  There was likewise no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,986 bags. 

Many of the commodity markets were on holiday for the Thanksgiving Day public holiday in the U.S.A. yesterday, to make it difficult to calculate direction for overall macro commodity index.   But for the markets that were trading yesterday and with the U.S. dollar losing a little weight, there was an overall degree of buoyancy.  The Sugar, Cotton, Copper and Gold markets ended the day on a positive note, while the Oil and Cocoa markets ended the day on a negative note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is without full participation unchanged from Wednesday’s close; to see this index registered at 410.39.   The day starts with the U.S. Dollar steady and trading at 1.287 to Sterling, at 1.141 to the Euro and with the dollar buying 3.803 Brazilian Real. 

The London market started the day trading solo and with value close to par, with the market maintaining a mostly sideways modestly negative track for the day.  To end the day with 50% of the losses of the day intact. 

This close does not inspire much confidence and with the New York market returning to the field of play today to encounter further bearish news out of Brazil, it is likely to set the markets for only a hesitant near to steady start for early trade today.  Against the prices set in New York on Wednesday and in London yesterday, as follows: 

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

NOV   1586 + 1                                               DEC    110.30 – 0.35

JAN    1610 – 5                                               MAR   114.10 – 0.80

MAR   1619 – 4                                               MAY   116.95 – 0.80

MAY   1630 – 6                                                JUL    119.55 – 0.85

JUL    1641 – 7                                                SEP    122.15 – 0.85

SEP    1652 – 7                                                DEC   125.70 – 0.85

NOV   1664 – 7                                                MAR   129.25 – 0.85

JAN    1677 – 8                                                MAY   131.65 – 0.85

MAR   1691 – 8                                                JUL    133.95 – 0.85

MAY   1711 – 9                                                SEP    136.00 – 0.85


Coffee Market Report November 22 2018

The respected Coffee Network report that is related to brokers International F C Stone is reported to have come to the fore with their forecast, that they foresee global coffee supply surplus for the present coffee year of approximately 11 million bags.  This indicating that there is an approximate 6.8% surplus coffee supply on the cards and further supports the prevailing bearish sentiment within the coffee markets, with so far, no supportive fundamental news in play. 

The physical coffee markets are meanwhile lacklustre in nature and with producer internal market price resistance tending to encounter resistance from consumer market industries, which is likely to further reduce the presently high consumer market coffee stocks.   But unless there is some supportive weather-related news coming to the fore for the markets, one cannot really foresee the producers being able to resist the negative price dictates of the international coffee markets. 

While with such a large surplus coffee supply foreseen by all market players and with forecasts that vary between 7 million to 12 million bags, there is no doubt that global coffee stocks are due to increase significantly during the coming year.  This despite an approximate 2 to 3 million bags of global consumption increase per annum, to contribute to some degree of insurance for medium term coffee supply for the consumer markets, even if there might be some damaging weather due for any of the major coffee producers.   Thus, limiting for the present, the medium-term upside potential for the coffee markets. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 40.18 usc/Lb., while this equates to 35.31% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,076 bags yesterday; to register these stocks at 2,455,443 bags.  There were meanwhile a larger in number 8,000 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,986 bags. 

The commodity markets ahead of the Thanksgiving Day public holiday in the U.S.A. were mostly buoyant in trade yesterday, to see the overall macro commodity index taking a positive track for the day.  The Oil, Sugar, Cotton, Copper and Gold markets ended the day on a positive note, while the Cocoa and Coffee markets ended the day on a negative note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.41% higher; to see this index registered at 410.39.   The day starts with the U.S. Dollar steady and trading at 1.278 to Sterling, at 1.139 to the Euro and with the dollar buying 3.797 Brazilian Real. 

The London and New York markets started the day yesterday trading on the positive side of par and with both markets taking this steady stance, into the early afternoon trade.   As the afternoon progressed and with some modest degree of softening of the value of the Brazil Real having an influence upon sentiment, the markets started to come under pressure and to see both markets moving down into negative territory.  With the markets continuing to head towards a soft close for the day. 

The London market ended the day on a negative note and with 52.6% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 69.6% of the earlier losses of the day intact.  This close and the steady flow of negative fundamental news that is coming to the market, does little to inspire any confidence.   However, with the U.S.A. markets closed for the Thanksgiving Day holiday today, one might not expect any excitement for the London market today, against the prices set yesterday, as follows: 

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

NOV   1585 – 14                                             DEC    110.30 – 0.35

JAN    1615 – 10                                             MAR   114.10 – 0.80

MAR   1623 – 14                                             MAY   116.95 – 0.80

MAY   1636 – 15                                              JUL    119.55 – 0.85

JUL    1648 – 17                                              SEP    122.15 – 0.85

SEP    1659 – 18                                              DEC   125.70 – 0.85

NOV   1671 – 19                                              MAR   129.25 – 0.85

JAN    1685 – 19                                              MAY   131.65 – 0.85

MAR   1699 – 19                                              JUL    133.95 – 0.85

MAY   1720 – 21                                              SEP    136.00 – 0.85


Coffee Market Report November 21 2018

The USDA have also reported that they have assessed the present April 2018 to March 2019 Indonesian coffee crop to be 1.8% lower than their earlier estimate, at a total of 10.9 million bags.  This crop that they relate 1.2 million bags of arabica coffees and to 9.7 million bags of robusta coffees, being only marginally 4.81% higher than their assessment of the previous April 2017 to March 2018 crop. 

The respected U.S Department of Agriculture Foreign Agriculture Service USDA have reported that due to the excessive monsoon rains in South West India this year, that they have reduced their new crop forecast by 5.45%, to now foresee a new coffee crop for the October 2018 to September 2019 coffee year of 5.2 million bags.  This forecast foreseeing a new crop that shall be made up by 1.5 million bags of arabica coffees and 3.7 million bags of robusta coffees. 

These figures that indicate flat coffee supply from Asia’s second and third largest coffee producers for the coming months are of no concern to the consumer markets at present, as the focus remains upon the significantly larger new Brazil crop this year, which with near perfect weather in South East Brazil at present, is indicating the potential for a follow on large new Brazil crop for next year.  

Meanwhile in terms of coffee weather, the Australian Government Bureau of Meteorology have remained with their view that there is a 70% chance that a new El Niño phenomenon shall come into play within the Pacific Ocean by the end of this year.   This possibility if for the present not causing any fear or market supportive concern, as unless it would be a severe El Niño, it would be unlikely to impact significantly upon global coffee production. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 40.65 usc/Lb., while this equates to 35.38% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,315 bags yesterday; to register these stocks at 2,456,519 bags.  There were meanwhile a larger in number 9,311 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,248 bags. 

The commodity markets encountered renewed muscle for the U.S. dollar yesterday and with most markets coming under pressure for the day, to see the overall macro commodity index taking a softer track for the day.  The Wheat and Soybean markets nevertheless ended the day on a positive note, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Corn, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.59% lower; to see this index registered at 408.7.   The day starts with the U.S. Dollar near to steady and trading at 1.280 to Sterling, at 1.138 to the Euro and with the dollar buying 3.757 Brazilian Real. 

The London market started the day yesterday on a positive note, while the New York market started the day on a negative note and with the markets maintaining this mixed stance, into the early afternoon trade.  As the afternoon progressed the New York market made a brief recovery, but with perhaps some influence from the negative nature of the overall macro commodity index playing a part, to slip back into negative territory.   With the London market starting to come under pressure, to follow the New York market into negative territory, for late in the day’s trade.  

The London market ended the day on a negative note and with 77.8% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 77.8% of the earlier losses of the day intact.  This close does little to inspire any confidence and is most likely due to set the markets for a hesitant and cautious near to steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1599 – 10                                             DEC    110.65 – 1.70

JAN    1625 – 7                                               MAR   114.90 – 1.75

MAR   1637 – 7                                               MAY   117.75 – 1.70

MAY   1651 – 6                                                JUL    120.40 – 1.70

JUL    1665 – 5                                                SEP    123.00 – 1.65

SEP    1677 – 5                                                DEC   126.55 – 1.70

NOV   1690 – 5                                                MAR   130.10 – 1.70

JAN    1704 – 4                                                MAY   132.50 – 1.70

MAR   1718 – 3                                                JUL    134.80 – 1.70

MAY   1741 + 3                                                SEP    136.85 – 1.70


Coffee Market Report November 20 2018

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 23.23% over the week of trade leading up to Tuesday 13th. November; to register a new net short sold position of 27,358 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 4.55%, to register a net long position of 43,738 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market increased their net short sold position within this market by 7.22%; to register a new net short sold position of 42,214 Lots. This net short-sold position which is the equivalent of 11,967,482 bags has most likely been decreased a little, following the period of mixed but overall more positive trade, that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The delay in the new crop out of Mexico and Central America and some degree of internal market price resistance for the lower grown coffees that are now in harvest, has seemingly assisted to interrupt the steady flow of coffees into the certified coffee stocks held against the New York exchange.   This new crop is though on the horizon and by the first quarter of next year, is due to fuel a steady stream of new crop coffees towards both the mainstream consumer market industries and to the certified stocks of the New York exchange.  

The producer bloc of Mexico and Central America presently accounting for 78.35% of the certified stocks of the New York exchange and followed by Peru, who account for 12.23% of the stocks.   The new crop from Peru, only due to start to impact upon the market from May next year. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 42.08 usc/Lb., while this equates to 36.07% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 515 bags yesterday; to register these stocks at 2,458,834 bags.  There were meanwhile a larger in number 5,966 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,937 bags. 

The commodity markets encountered a further softening of the U.S. dollar yesterday and to see many markets showing a degree of buoyancy for the day, which assisted the overall macro commodity index to remain on an upside track for the day.   The Oil, Natural Gas, Sugar, New York arabica Coffee, Orange Juice, Gold and Silver ended the day on a positive note, while the Cocoa, London robusta Coffee, Cotton, Wheat, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.69% higher; to see this index registered at 415.32.   The day starts with the U.S. Dollar steady and trading at 1.286 to Sterling, at 1.145 to the Euro and with the dollar buying 3.756 Brazilian Real. 

The London market started the day yesterday on a positive note, while the New York market started the day on a marginally negative note and with the markets maintaining this mixed stance, into the early afternoon trade.  As the afternoon progressed the New York market started to come under pressure and to extend the losses and with the London market following suit, to move back into negative territory.  The New York market started to trigger sell stops and the losses were accentuated to post losses for the day of 3.15 usc/Lb., with the London market likewise losing some more weight.   The London market bounced of the lows towards a nevertheless negative track for the rest of the day, while the New York market made a late in the day recovery and towards a modestly positive close for the day. 

The London market ended the day on a negative note and with 60.9% of the earlier losses of the day intact, while the New York market ended the day on a modestly positive note and with 50% of the gains of the day intact.   It was a day though of mixed signals and despite the ability of the New York market to bounce back from the significant lows of the day, one might think that there shall be a degree of indecision and caution due for early trade today, to see the markets taking only a hesitantly steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1609 – 19                                             DEC    112.35 – 0.25

JAN    1632 – 14                                             MAR   116.65 + 0.35

MAR   1644 – 14                                             MAY   119.45 + 0.35

MAY   1657 – 15                                              JUL    122.10 + 0.35

JUL    1670 – 16                                              SEP    124.65 + 0.35

SEP    1682 – 18                                              DEC   128.25 + 0.40

NOV   1695 – 16                                              MAR   131.80 + 0.50

JAN    1708 – 15                                              MAY   134.20 + 0.50

MAR   1721 – 13                                              JUL    136.50 + 0.50

MAY   1738 – 13                                              SEP    138.55 + 0.50


Coffee Market Report November 19 2018

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 short sold position within the market by 7.22% over the week of trade leading up to Tuesday 13th. November; to register a new net short sold position of 42,214 Lots.   This net short-sold position which is the equivalent of 11,967,482 bags has most likely been decreased marginally, following the period of mixed but overall more positive trade, that has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within this market by 92.29% during the week of trade leading up to Tuesday 13th. November; to register a net short sold position of 276 Lots on the day.  This net short sold position which is the equivalent of 46,000 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall more sideways trade, which has since followed. 

These Commitment of Traders reports and with the net short position within the New York market sharply lower than a few weeks ago and the recent couple of weeks of short covering are a little bit confusing, as it is not related to any supportive fundamental news.   But is rather most likely related to the shifting of focus from speculation within the relatively flat coffee markets, to investments in alternative mediums. 

Albeit that with the Green Coffee Association of the U.S.A. reporting the end October 2018 port warehouse coffee stocks at their lowest since May 2016, that this could be seen to be some modestly supportive news for the market.  But a market that is soon due to encounter not only the present deliveries out of a bumper new Brazil coffee crop, but also the surge of new crop coffee supply that is coming from Colombia and Vietnam and shortly to be followed, by a delayed new Mexican and Central American coffee crop.   Thus, it is difficult to believe that this matter of reduced port warehouse stocks could be seen to be in anyway a realistic supportive factor for sentiment, for the presently depressed coffee terminal markets.  

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened on Friday, to register this at 41.09 usc/Lb., while this equates to 35.33% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2 bags on Friday; to register these stocks at 2,459,349 bags.  There were meanwhile a larger in number 2,618 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,903 bags. 

The commodity markets encountered a softening of the U.S. dollar on Friday and to see most markets showing a degree of buoyancy for the day, to see the overall macro commodity index taking an upside track for the day.   The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, copper, Orange Juice, Wheat, Soybean, Gold and Silver markets ended the day on a positive note and the Cotton market steady for the day, while the London robusta Coffee and Corn markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.19% higher; to see this index registered at 412.47.   The day starts with the U.S. Dollar steady and trading at 1.282 to Sterling, at 1.140 to the Euro and with the dollar buying 3.743 Brazilian Real. 

The London market started the day on Friday on a softer note and the New York market taking a steady track and trading around par, to see the markets maintaining this stance, into the early afternoon trade.   As the afternoon progressed, the London market maintained a sideways softer stance, while the New York market started to attract support and to add value and start on an upside track for the rest of the day’s trade, with the London market taking the opposite direction and losing more value for late in the day’s trade. 

The London market ended the day on a very negative note and with 95.5% of the earlier losses of the day intact, while the New York market ended the day on a very positive note and with 89.3% of the earlier gains of the day intact.   It was though, a day that lacked much in the way of participation out of Brazil, where many had taken an extended long weekend, following Thursday’s Republic Day holiday celebrations.  Thus, one might think to see some degree of catch up buoyancy on the part of the London market and only a cautious steady start for the New York market for early trade today, as players might fear some catch up price fixation hedge selling due out of Brazil a little later in the day, for the New York market.   Against the prices set on Friday, as follows: 

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

NOV   1628 – 14                                             DEC    112.60 + 2.55

JAN    1646 – 21                                             MAR   116.30 + 2.50

MAR   1658 – 20                                             MAY   119.10 + 2.50

MAY   1672 – 20                                              JUL    121.75 + 2.50

JUL    1686 – 18                                              SEP    124.30 + 2.50

SEP    1700 – 16                                              DEC   127.85 + 2.50

NOV   1711 – 14                                              MAR   131.30 + 2.50

JAN    1723 – 13                                              MAY   133.70 + 2.55

MAR   1734 – 13                                              JUL    136.00 + 2.55

MAY   1751 – 13                                              SEP    138.05 + 2.55


Coffee Market Report November 16 2018

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 261,353 bags or 4.06% during the month of October, to register these stocks at 6,176,867 bags at the end of the month.   The overall Green Coffee stocks reported, 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 approximately 570,000 bags per week, would conservatively have been at least 1.1 million bags. 

Suggesting that if one is to consider the additional unreported stocks the end month stocks, this would equate to more than twelve weeks of roasting activity, which most would consider to be a very safe reserve.    Especially so ahead of the pending deliveries from large new Mexican and Central American crop, a new Colombian main crop, a large new Vietnam crop and the ongoing potential surge of new crop deliveries from Brazil. 

There is though the factor of the prevailing soft nature of the reference prices of the coffee terminal markets, which might cause some degree of internal market price resistance within some producer countries.  This and along with the delays in the Mexican and Central American new crop harvest, might delay any growth in the U.S.A and North America coffee stocks in general, for a couple of months.   

It has been a dry week for many of the main coffee districts in Brazil this week, but a new cold front is on the horizon, to bring good rains for South East Brazil and to assist to add to the already good ground water retention levels.   Thus, for the present, the talk out of Brazil is for another large coffee crop due for the coming year and this talk, adding to the prevailing bearish sentiment within the coffee markets. 

Meanwhile and despite Brazil celebrating their Proclamação da República (Republic Day) holiday yesterday, which would have reduced price fixation hedge selling activity out of the country other than sell stops that might have been in place, the New York market still came under pressure.   With the managed money funds and speculative sectors of the market most probably once again, selling short into this market. 

Vietnam is now in full harvest of their new crop, which is forecast by many, to be in excess of 30 million bags and with these new crop coffees due to start impacting upon global coffee supply within the coming weeks.  Thus while Indonesia is post-harvest and low on robusta coffee stocks until April next year, there is with the added input from the larger new Brazil conilon robusta crop and the African robusta coffees, a steady flow of robusta coffees due for the consumer markets.     

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.69 usc/Lb., while this equates to 33.12% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,065 bags yesterday; to register these stocks at 2,459,351 bags.  There were meanwhile a larger in number 4,556 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,285 bags. 

The commodity markets had a mixed day yesterday, but with the overall macro commodity index taking a softer track for the day.  The Oil, Cocoa, London robusta Coffee, Copper, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, New York arabica Coffee, Cotton, and Orange Juice markets ended the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.76% lower; to see this index registered at 407.62.   The day starts with the U.S. Dollar steady and trading at 1.280 to Sterling, at 1.134 to the Euro and with the dollar buying 3.784 Brazilian Real, while North Sea Oil is steady and is selling at US$ 65.65 per barrel. 

The London and New York markets started the day yesterday on a modestly positive note, but with both markets drifting back to trade around par, for the early afternoon trade.  As the afternoon progressed the New York market started to come under pressure and with sell stops being triggered to accentuate the losses, which briefly had some negative influence upon the London market.  The markets did however bounce of the lows and set the London market for a modestly positive close, which the New York market regained some of its sharp losses for the day. 

The London market ended the day on a modestly positive note and with 44.4% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 70.6% of the earlier losses of the day intact.  This mixed close does little to inspire confidence and one might think that the markets are due for another hesitant steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1642 – 3                                               DEC    110.05 – 2.60

JAN    1667 + 4                                               MAR   113.80 – 2.40

MAR   1678 + 3                                               MAY   116.60 – 2.45

MAY   1692 + 5                                                JUL    119.25 – 2.50

JUL    1704 + 7                                                SEP    121.80 – 2.50

SEP    1716 + 9                                                DEC   125.35 – 2.50

NOV   1725 + 9                                                MAR   128.80 – 2.50

JAN    1736 + 9                                                MAY   131.15 – 2.50

MAR   1747 + 9                                                JUL    133.45 – 2.50

MAY   1764 + 9                                                SEP    135.50 – 2.50


Coffee Market Report November 15 2018

There are reports that due to a late flowering in March this year for many of the coffee districts in Mexico and Central America and some cold and wet weather in recent weeks, that the new crop harvest is running about four weeks late.   This has already delayed the harvest that has started in the lower grown districts and might delay the higher grown coffees from the region, in the coming months.  To result in the shipments of these higher grown new crop coffees to only start in February next year, rather than the usual start in January. 

Meanwhile as farmers in this important fine washed arabica producer bloc have mostly already invested this year in the necessary farm inputs to maximize their yield and crop potential, the region is expected to come to the fore with another good volume crop of approximately 21 million bags.  But unless there is some dramatic recovery for the related reference prices of the New York market, one might speculate that farm inputs might be less affordable for the coming year, which could be damaging for the potential of the follow-on October 2019 to March 2020 crop.  But this is a long way to the fore and for the present, such speculation is unlikely to have any influence upon the prevailing bearish market sentiment. 

In terms of consumer markets, the German Coffee Association DKV arranged for a meeting in Hamburg yesterday, to address the prospects for and how to do business, within the growing Chinese coffee market.  This meeting and with a number of speakers, designed to assist participants to understand the nature of the Chinese market, to understand how to do business to and within the market and to understand the legal aspects of doing business in and to this market. 

The Chinese market already experiencing growing consumption that is led by the many domestic and international coffee shop chains within this market, which one would think shall prove to be something of a shop window for the large middle class in the country and shall in time, as the hip coffee shop culture is becoming popular and as it has over the recent years in many other Asian countries, result in a growing at home coffee consumption culture.  Albeit that China is already a coffee producing and exporting country and could be expected as the domestic market grows, to produce increased volumes of coffee. 

Today is the Proclamação da República (Republic Day) holiday in Brazil, which is often with such near to weekend timing, is extended by many companies to include the following day.  This likely to reduce price fixation hedge selling of coffees against the terminal markets, which might assist to bring some degree of buoyancy for the markets for the end of the week. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.22 usc/Lb., while this equates to 34.61% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 2,458,286 bags.  There were meanwhile 4,557 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,841 bags. 

The commodity markets encountered a weaker U.S. dollar yesterday, which assisted many markets to show some degree of buoyancy, to see the overall macro commodity index taking an upside track for the day.  The Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Cocoa, Orange Juice and Wheat markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.17% higher; to see this index registered at 410.75.   The day starts with the U.S. Dollar steady and trading at 1.301 to Sterling, at 1.133 to the Euro and with the dollar buying 3.784 Brazilian Real, while North Sea Oil is near to steady and is selling at US$ 64.35 per barrel. 

The London and New York markets started the day yesterday on a positive note, but with both markets drifting back to trade around par, for the early afternoon trade.  As the afternoon progressed the New York market started to add some value and to move into positive territory and followed by the London market, which was followed by increased gains for the New York market.  These gains within the New York market soon started to trigger buy stops and increased value, which was followed by more modest gains within the London market, but while the New York market managed to hold on to its higher value profile through to the close, the London market attracted selling pressure and to shed much of the gains of the day. 

The London market ended the day on a positive note and with 38.9% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 92% of the earlier gains of the day intact.  This overall positive close and with Brazil off the field of play for the day in mind, might assist towards a degree of confidence and inspire a steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1645 + 15                                             DEC    112.65 + 3.45

JAN    1663 + 7                                               MAR   116.20 + 3.45

MAR   1675 + 9                                               MAY   119.05 + 3.45

MAY   1687 + 9                                                JUL    121.75 + 3.35

JUL    1697 + 8                                                SEP    124.30 + 3.30

SEP    1707 + 7                                                DEC   127.85 + 3.30

NOV   1716 + 5                                                MAR   131.30 + 3.20

JAN    1727 + 5                                                MAY   133.65 + 3.15

MAR   1738 + 5                                                JUL    135.95 + 3.15

MAY   1755 + 5                                                SEP    138.00 + 3.15


Coffee Market Report November 14 2018

The coffee markets are devoid of any striking supportive fundamental news for the present, but rather repetitive reports that confirm the bearish nature of the markets, in terms of the global surplus coffee supply.   Perhaps the only glimmer of some degree of threat to longer term coffee production, are the forecasts for a 70% chance for a new El Niño phenomenon to develop within the Pacific Ocean. 

But this would in reality unless it proves to be a strong El Niño, would not really be much of a threat to 2019 coffee production.  While in terms of Brazil and following this year’s bumper crop, an El Niño would bring with it increased rains for South East Brazil, which would be supportive for the development of another large coffee crop for 2019. 

Meanwhile with the fund and speculative sectors of the New York market having already short covered and liquidated much of their recent record short sold positions within the New York market, it would seem unlikely that lacking any supportive fundamental news, that they shall continue to buy back into the market.  This making one speculate that there really is not much upside potential for the coffee markets from this sector of the market, while with substantial quantities of new crop coffees soon due from Vietnam, Mexico, Central America and Colombia, there is the potential for negative pressure due form increased volumes of producer price fixation hedge selling activity. 

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.18 usc/Lb., while this equates to 32.98% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,930 bags yesterday; to register these stocks at 2,458,286 bags.  There was meanwhile a larger in number 2,475 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 35,398 bags. 

The commodity markets encountered a steady U.S. dollar yesterday, but with the Oil markets falling out of bed for the day and many other markets under pressure, to see the overall macro commodity index taking a softer track for the day.  The Natural Gas, Cocoa, London robusta Coffee and Copper markets ended the day on a positive note, while the Oil, Sugar, Cotton, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.67% lower; to see this index registered at 406.02.   The day starts with the U.S. Dollar steady and trading at 1.298 to Sterling, at 1.129 to the Euro and with the dollar buying 3.803 Brazilian Real, while North Sea Oil remains under pressure and selling at US$ 63.95 per barrel. 

The London and New York markets started the day yesterday with some modest buoyancy, while the New York market was trading erratically either side of par but with the London market soon slipping back to par and the New York market into modest negative territory, for the early afternoon trade.   As the afternoon progressed and the Americas entering the field of play, the New York market started to attract increased selling pressure and extended the losses, while the London market remained on something of a sideways track and close to par.  The London market continued to end the day on a steady note, while the New York market did bounce of the lows of the day, before ending the day on a softer note. 

The London market ended the day on a steady to modestly positive note and with 33.3% of the earlier modest gains of the day intact, while the New York market ended the day on a negative note but having recovered 55.4% of the earlier losses of the day.   This close does little to inspire confidence and still paints a rather dismal picture for the charts, but with the London market having remained steady and the New York market managing to bounce back from the lows, it might inspire a degree of cautious hesitancy.  Making one think that the markets shall be due for something of a steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1630 – 1                                               DEC    109.20 – 0.95

JAN    1656 + 2                                               MAR   112.75 – 1.25

MAR   1666 + 2                                               MAY   115.60 – 1.30

MAY   1678 unch                                            JUL    118.40 – 1.25

JUL    1689 unch                                            SEP    121.00 – 1.20

SEP    1700 – 2                                                DEC   124.55 – 1.20

NOV   1711 – 1                                                MAR   128.10 – 1.10

JAN    1722 unch                                            MAY   130.50 – 0.80

MAR   1733 + 1                                                JUL    132.80 – 0.40

MAY   1750 + 1                                                SEP    134.85 – 0.10


Coffee Market Report November 13 2018

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease their net short sold position within the market by 14.2% over the week of trade leading up to Tuesday 6th. November; to register a new net short sold position of 22,201 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1.73%, to register a net long position of 45,822 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 11.29%; to register a new net short sold position of 39,372 Lots. This net short-sold position which is the equivalent of 11,161,788 bags has most likely been increased a little, following the period of mixed but overall more negative trade, that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The evidence of the much reduced speculative and managed money net short sold positions within the New York market and the negative nature of the medium to longer term surplus coffee supply, contributes to the bearish sentiment within the coffee markets.  While with the Brazil Real weakening against the presently robust U.S. dollar, the perspective of increased price fixation hedge selling coming to the markets further adds to the negative sentiment within the markets. 

There are though, reports of increasing internal market price resistance coming to the fore within many leading coffee producing countries, but with rising global coffee supply coming from the new crops in Vietnam, Colombia, Mexico and Central America, one might think that it shall be difficult for coffee farmers within most producer countries, to show long term resistance to the negative price dictates of the coffee terminal markets.  

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 38.52 usc/Lb., while this equates to 33.79% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decline by 600 bags yesterday; to register these stocks at 2,456,356 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,873 bags. 

The commodity markets encountered follow through firmness of the U.S. dollar, which saw many markets on the back foot for the day and a day of mixed trade, with the overall macro commodity index taking an erratic sideways track for most of the day.  The Natural Gas, Sugar, Wheat and Corn markets ended the day on a positive note, while the Oil, Cocoa, Coffee, Cotton, Copper, Orange Juice, Soybean, Gold and Silver markets ended the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.11% lower; to see this index registered at 408.75.   The day starts with the U.S. Dollar steady and trading at 1.288 to Sterling, at 1.124 to the Euro and with the dollar buying 3.767 Brazilian Real, while North Sea Oil is steady and selling at US$ 68.20 per barrel. 

The London and New York markets started the day yesterday on a very soft note and to see both markets taking a softer track, into the early afternoon trade.   As the afternoon progressed and with the Americas entering the field of play, the New York market attracted increased selling pressure and with sell stops being triggered, to extend its losses and with the London market following suit, in a more sedate manner.  Both markets continued on their downside track in late trade, towards a soft start for the week. 

The London market ended the day on a negative note and with 88.6% of the earlier losses of the day intact, while the New York market ended the day on a very negative note and with 87.5% of the losses of the day intact.   This close does little to inspire confidence and paints a rather dismal picture for the charts, which is more than likely to set the markets for a follow through unsteady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1631 – 30                                             DEC    110.15 – 3.70

JAN    1654 – 31                                             MAR   114.00 – 3.50

MAR   1664 – 29                                             MAY   116.90 – 3.50

MAY   1678 – 26                                              JUL    119.65 – 3.50

JUL    1689 – 23                                              SEP    122.20 – 3.50

SEP    1702 – 18                                              DEC   125.75 – 3.40

NOV   1712 – 16                                              MAR   129.20 – 3.35

JAN    1722 – 16                                              MAY   131.30 – 3.35

MAR   1732 – 17                                              JUL    133.20 – 3.35

MAY   1749 – 17                                              SEP    134.95 – 3.35