Market Reports

Coffee Market Report June 28 2017

The physical coffee trade remains in the doldrums for the present, with only lacklustre trade being witnessed within the main consumer markets and matched by lacklustre selling activity on the part of most producers for the present.  Leaving direction very much in the hands of the speculative and fund sectors of the market and particularly so, for the volatile New York market.   

Fundamentally the markets encounter general perception that with the contribution of a lower Brazil arabica coffee crop this year, that the arabica coffee supply shall start to tighten up and remain so, for at least the first nine months of the forthcoming October 2017 to September 2018 coffee year.   While despite the forecasts for a larger new Vietnam robusta coffee crop for the end of the year, the liquidation of present stocks and the prospects for very modest carryover stocks, would indicate that there shall likewise be a relatively tight supply of robusta coffees through to the advent of the new Indonesian and Brazilian robusta coffee crops coming into play in April and May next year, respectively.  

However there remains something of a cloud over the markets for the present, in the form of the large volumes of coffee stocks that are being held within the mainstream consumer markets, which counter the market supportive effects of tightening producer coffee supply.  This factor in terms of industry drawdown of some of the stocks ahead of the new Mexican, Central American and Colombian main crop that is due to start coming into play at the end of the year, might however start to decline in influence in the coming months.  Thus, suggesting the potential for some degree of change in sentiment for the leading New York arabica coffee market during the third quarter of the year, on the part of the presently short sold Speculative and Managed Money Fund sectors of the market. 

While perhaps the most influential factor that could come to the fore is the weather news and while for the present the weather conditions for coffee producers globally are stable and do not forward supportive sentiment for the coffee markets, there is the uncertainty of the next Brazil spring and summer rain season to the fore.   If the rains come on time by early October and indicating average to good rains to the fore that would support forecasts for a significantly larger new Brazil coffee crop in 2018 it is likely to once again dampen speculative spirits within both coffee markets, but any delay of disappointment in the quality of the rains, could prove to be a spark to light a fire under the New York market and to a lesser extent, under the already relatively strong London market.   

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 30.68 usc/Lb., while this equates to a 24.49% 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 1,245 bags yesterday; to register these stocks at 1,510,403 bags.  There were meanwhile a larger in number 5,015 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 66,811 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 27,167 bags or 0.98% during the week of trade leading up to Monday 26th. June, to see these stocks registered at 2,754,500 bags, on the day. 

The commodity markets had a positive day yesterday on the back of the news of an IMF cut in its U.S. growth prospects and the news of improved growth forecast for the Euro zone that came from the European Central Bank, which assisted to add more muscle to the Euro and to weaken the U.S. dollar.   While there were also more bullish growth forecasts coming to the fore from China and indicating increased demand, which all assisted to buoy the overall macro commodity index for the day.   The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy and the Gold and Silver markets were steady for the day, while the London robusta Coffee bucked the trend to be marginally softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.47%higher, to see this Index registered at 391.58.  The day starts with the U.S. Dollar tending softer and trading at 1.281 to Sterling and at 1.136 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at $ 45.80 per barrel. 

The coffee markets started the day yesterday with the London market trading marginally south of par, while the New York market started the day with follow through modest buoyancy and with the markets maintaining this mixed stance through to early afternoon trade.   As the afternoon progressed the New York market picked up support and extended its gains and the London market briefly moved into positive territory but the excitement was short lived and the New York market once again lost some weight and headed back into negative territory and matched by the London market, which likewise took the road south.   But with the markets recovering and with the New York market moving back into positive territory, while the London market recovered much of its losses. 

The London market ended the day on a modestly negative note but having recovered 84.6% of the earlier losses of the day, while the New York market ended the day on a positive note and with 42.1% of the earlier gains of the day intact.   This close and with the weaker U.S. dollar in play might be seen to be constructive for sentiment and one might expect to see the markets due for a steady start for early trade today, against the prices set yesterday, as follows: 

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

JUL    2073 – 3                                              JUL     122.75 + 0.80 

SEP    2086 – 4                                              SEP    125.30 + 0.80

NOV   2066 + 1                                               DEC   128.80 + 0.75

JAN    2041 – 2                                              MAR   132.30 + 0.80

MAR   2026 – 5                                              MAY   134.60 + 0.70

MAY   2027 – 7                                              JUL    136.85 + 0.75

JUL    2043 – 13                                            SEP    138.95 + 0.75

SEP    2061 – 13                                            DEC   141.80 + 0.80

NOV   2070 – 13                                            MAR   144.55 + 0.80

JAN    2077 – 13                                            MAY   146.20 + 0.80    


Coffee Market Report June 27 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 21.04% over the week of trade leading up to Tuesday 20th. June; to register a new net short-sold position of 37,506 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 2.11%, to register a net long position of 32,391 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 16.41%, to register a net short sold position of 35,699 Lots.  This net short sold position which is the equivalent of 10,120,508 bags has most likely been little changed, following the corrective trade over the past two days, which recovered the losses within this market during mid last week. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market increase their net long position within this market by 13.73% during the week of trade leading up to Tuesday 20th. June; to register a net long position of 21,559 Lots.  This net long position which is the equivalent of 3,593,167 bags has most likely been little changed to perhaps marginally increased again, following the period of mixed but overall more positive trade that has since followed. 

The evidence of the extensive nature of the speculative and Managed Money net short sold position within the New York market and indicating a degree of selling exhaustion is presently proving to be somewhat supportive of the market for the present, which is now encountering lessening volumes of producer selling out of the already well sold producer bloc of Mexico and Central America.  While with an undeniable smaller new Brazil arabica coffee crop this year and with farmers having a close to a year to sell their coffees before the impact of the next crop, is likely to subdue selling aggression out of Brazil for the coming months and in terms of producer impact or influence upon the fortunes of this market, it is likely to assist to limit the downside potential for this market. 

The London market meanwhile remains buoyed by the fundamental of the prevailing tight supply of robusta coffees and it is clearly reflected by the speculative net long position within this market and the modest nature of the prevailing arbitrage between the London and New York markets, but one would think that with only four and half months until the start of the harvest of a larger new Vietnam robusta coffee crop, that the London market might start to come off the boil in a couple of months’ time.    It remains meanwhile though, the coffee market with relative muscle. 

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 29.70 usc/Lb., while this equates to a 23.86% 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 745 bags yesterday; to register these stocks at 1,509,158 bags.  There were meanwhile a larger in number 24,490 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,796 bags. 

The commodity markets had a mixed day yesterday and with the marginally softer U.S. dollar assisting for stability within many markets, to see the overall macro commodity index taking a modest positive track for the day.  The Oil, Natural Gas, Coffee, Copper, Orange Juice, Corn and Soybean markets had a day of buoyancy and the Cotton market was steady, while the Sugar, Cocoa, Wheat, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.07%higher, to see this Index registered at 389.76.  The day starts with the U.S. Dollar steady and trading at 1.273 to Sterling and at 1.119 to the Euro, while North Sea Oil is steady and is selling at $ 44.55 per barrel. 

The coffee markets started the day yesterday with follow through buoyancy and with both markets maintaining this positive stance, into the early afternoon trade.  As the afternoon progressed the New York market started to pick up more support and to extend the gains of the day, while the London market maintained an erratic sideways track.   The New York market did however soon hit a ceiling and dipped back to register more modest gains for the day and mirrored by the London market that likewise dipped back from its highs, to see both markets close off the day on a sideways track. 

The London market ended the day on a positive note and with 57.1% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 41.7% of the earlier gains of the day intact.  This close could be seen to be something of a consolidation of the Friday’s recovery for the markets and could be seen to be somewhat supportive for confidence, but one might expect to see some degree of hesitation and perhaps only a steady start for early trade today, against the prices set yesterday, as follows: 

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

JUL    2076 + 13                                            JUL     121.95 + 2.00 

SEP    2090 + 12                                            SEP    124.50 + 1.50

NOV   2065 + 9                                               DEC   128.05 + 1.50

JAN    2043 + 13                                            MAR   131.50 + 1.45

MAR   2031 + 18                                            MAY   133.90 + 1.50

MAY   2034 + 18                                            JUL    136.10 + 1.45

JUL    2056 + 17                                            SEP    138.20 + 1.40

SEP    2074 + 17                                            DEC   141.00 + 1.40

NOV   2083 + 17                                            MAR   143.75 + 1.35

JAN    2090 + 17                                            MAY   145.40 + 1.35    


Coffee Market Report June 26 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 16.41% during the week of trade leading up to Tuesday 20th. June; to register a net short sold position of 35,699 Lots on the day. This net short-sold position which is the equivalent of 10,120,508 bags has most likely been little changed to perhaps marginally increased, despite the sharp positive short covering correction in the market on Friday, which followed the previous day’s rather dramatic selloff. 

It was a day for the industry to watch the New York market from the sidelines of the field of play on Friday, with producers mostly withdrawn from what most consider to be an overly soft market and aside from stop loss price fixation on the part of roasters, very little in the way of industry buying aggression in play.   It was nevertheless a positive day for both markets, albeit that the Friday correction did not stop the markets from having an overall weaker week of trade. 

The question is what might be the direction to be set this week for the volatile New York market which remains with the negative influences upon speculative sentiment that come with the relatively high levels of consumer market coffee stocks at present, while the markets only really supportive fundamental is the smaller new arabica coffee crop in Brazil which is presently being harvested.   However, it is an arabica coffee crop that many have speculated shall nevertheless in terms of global arabica coffee stocks and future supply from the other producers, not prove to be a critical factor in terms of overall longer term global arabica coffee supply.  

Thus, it is yet to be seen if Friday’s somewhat anticipated correction that was due with the oversold nature of the New York market last week and a correction that set the market for its biggest one day gain in value for a year, shall be a pivotal day for the markets or just a start for a day or two of correction.    Suggesting that it shall encourage somewhat erratic trade for the York market this week, with players looking for some indication of direction and with the London market tending to mirror in a more modest manner, the direction that the New York market shall set.  

The September to September contracts arbitrage between the London and New York markets broadened on Friday, to register this at 28.74 usc/Lb., while this equates to a 23.37% 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 5,355 bags on Friday; to register these stocks at 1,509,903 bags.  There were meanwhile a smaller in number 4,050 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,306 bags. 

The commodity markets had a more positive day to end the week on Friday and with the U.S. dollar marginally softer for the day, to see the overall macro commodity index taking a positive track for the day.   The Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Gold and Silver markets had a day of buoyancy, while the Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.97%higher, to see this Index registered at 389.50.  The day starts with the U.S. Dollar tending a little softer and trading at 1.270 to Sterling and at 1.117 to the Euro, while North Sea Oil is steady and is selling at $ 44.15 per barrel. 

The coffee markets started the day on Friday with the London market under some pressure and trading south of par, while the New York market started the day on a corrective positive note and with the markets maintaining this mixed stance into the early afternoon trade.  As the afternoon progressed the New York market started to add more value and initially having little influence upon the soft London market, but with buy stops being triggered within the New York market and accentuating the gains, the London market turned and headed north into modest positive territory and with the influences of further weight being added within the New York market, to likewise add more value.   But while the New York market continued on its upside track for the day, the less volatile London market hit something of a ceiling and to take a sideways positive track for late in the day trade. 

The London market ended the day on a positive note and with 84.2% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 92.2% of the earlier gains of the day intact.  This close is somewhat supportive for confidence but there is likely to be some degree of caution and hesitancy for early trade today and thus one might expect to see only a modest follow through support as the day’s trade starts today against the prices set on Friday, as follows: 

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

JUL    2063 + 49                                            JUL     119.95 + 6.50 

SEP    2078 + 48                                            SEP    123.00 + 6.50

NOV   2056 + 41                                             DEC   126.55 + 6.50

JAN    2030 + 39                                            MAR   130.05 + 6.50

MAR   2013 + 35                                            MAY   132.40 + 6.45

MAY   2016 + 39                                            JUL    134.65 + 6.40

JUL    2039 + 44                                            SEP    136.80 + 6.30

SEP    2057 + 44                                            DEC   139.60 + 6.35

NOV   2066 + 44                                            MAR   142.40 + 6.30

JAN    2073 + 44                                            MAY   144.05 + 6.30    


Coffee Market Report June 23 2017

The Uganda Coffee Development Authority UCDA has reported that the countries coffee exports for the month of May were 122,509 bags or 42.84% higher than the same month last year, at a total of 408,454 bags.  This improved performance and following a much-improved performance in many of the previous months, has contributed to the countries cumulative coffee exports for the first eight months of the present October 2016 to September 2017 coffee year to being 706,124 bags or 30.95% higher than the same period in the previous coffee year, at a total of 2,987,876 bags.  

In terms of value the UCDA has reported that the coffee exports for the month of May were US$ 19,952,047.00 or 72.24% higher than the same month last year, at a total of US$ 47,571,639.00.  This having contributed to the cumulative value for the first eight months of the present October 2016 to September 2017 coffee year to be US$ 140,435,337.00 or 63.75% higher than the same period in the previous coffee year, at a total of US$ 360,720,060.00. 

These figures would start to indicate that the country is on its way to well exceed the volume of coffee exports of 3,315,567 bags that were registered for the previous October 2015 to September 2016 coffee year, during the present coffee year and possibly on track to exceed 4 million bags for the present coffee year.    While the added value for the coffees being exported out of Uganda for the coffee year so far, does much to inspire further investment on the part of the Ugandan farmers into their coffee crops. 

Albeit that the improved income is more related to the countries robusta coffee farmers, as the arabica coffee farmers are starting to suffer from the negative nature of the reference prices of the New York arabica coffee market.   Noting that the Uganda coffee production is somewhat dominated by the robusta coffee sector, which has contributed to 74.48% of the country’s coffee exports for the first eight months of the present coffee year. 

Weather conditions over the main coffee districts in Brazil have turned generally dry and a looking to remain so for the coming week, while there is no threat of frost foreseen for the short term.   This is assisting to accelerate the new crop harvest, which the respected analyst Safras & Mercado and with a new crop harvest of 51.1 million bags, estimate to be 37% complete.   Based on their assessment that already 63% of the new conilon robusta coffee crop has been harvested, while 30% of the new arabica coffee crop has been harvested.  

Meanwhile with the narrowing of the arbitrage of the reference prices of the London and New York market, the internal market prices for Brazil conilon robusta coffees are already starting to match the prices for the poorer cupping coffees out of the new arabica coffee crop.   A situation that is likewise developing globally, with lower grade arabica coffees only being able to attract price support at discounted levels to the better grades of robusta coffees.  

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 24.42 usc/Lb., while this equates to a 20.96% 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 1,515,258 bags.  There were meanwhile 4,467 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 33,256 bags. 

The commodity markets had a mixed day yesterday, but with the overall macro commodity index nevertheless remaining on a softer track for the day.   The Oil, Natural Gas, Orange Juice, Gold and Silver markets had a day of buoyancy, while the Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.76% lower, to see this Index registered at 385.75.  The day starts with the U.S. Dollar tending a little softer and trading at 1.270 to Sterling and at 1.117 to the Euro, while North Sea Oil is steady and is selling at $ 44.15 per barrel. 

The coffee markets started the day yesterday on a mixed note and with the London market trading marginally below par, while the New York market started the day on a steady note and with both markets soon starting to show some degree of buoyancy and taking a steady track and on the positive side of par into the early afternoon trade.   However, as the afternoon progressed and the Americans entered the field of play the New York market started to come under pressure and with the funds and speculative sectors of this market selling and triggering sell stops, to force the New York market deep into negative territory and followed to a lesser extent, by the fundamentally more positive London market.    Both markets did however steady in late trade and show some degree of buoyancy over the lows of the day, through to the close. 

The London market ended the day on a negative note and with 87.5% of the earlier losses of the day intact, while the New York market ended the day on a very negative note and with 84.7% of its sharp losses of the day intact.   This close and one that is related to fund and speculative actions rather than the fundamentals within the market would make one think that the New York market in particular is oversold and leaves one with the question over when shall fund and speculative exhaustion come into play, to perhaps trigger some degree of supportive profit.   Thus one might expect that the markets are due for cautious and hesitant support for early trade today against the prices set yesterday, as follows: 

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

JUL    2014 – 41                                            JUL     113.45 – 5.90 

SEP    2130 – 42                                            SEP    116.50 – 5.55

NOV   2015 – 41                                             DEC   120.05 – 5.55

JAN    1991 – 40                                            MAR   123.55 – 5.55

MAR   1978 – 38                                            MAY   125.95 – 5.55

MAY   1977 – 36                                            JUL    128.25 – 5.50

JUL    1995 – 33                                            SEP    130.50 – 5.40

SEP    2013 – 31                                            DEC   133.25 – 5.40

NOV   2022 – 31                                            MAR   136.10 – 5.35

JAN    2029 – 31                                            MAY   137.75 – 5.30    


Coffee Market Report June 22 2017

The coffee markets aside from the clearing of the books on the part of the trade and industry of their prompt July contract positions within the New York market ahead of first notice day for the contract, were in receipt of nothing in the way of news or excitement yesterday.   But with the continued speculative pressure upon this market that has seen the arbitrage between the New York and London markets narrow to its lowest value for over forty-two months, being perhaps the other notable factor for the day. 

The big question for the present and one that is very much on the lips of the arabica coffee producers in general, is when might it be that the New York market could be seen to be oversold by the short sold speculative sector of the market, which might trigger a profit taking liquidation of some of their short positions and with buy stops being triggered, a possible sharp upside correction in value.  Albeit that to a degree, the selloff within the New York market is being influenced by and is somewhat in line with the generally soft nature of the overall macro commodity index in general. 

In terms of weather and the Brazil winter the short-term forecasts are not frost threatening for the coming week, but there is still the traditionally higher risk period around the time of the next full moon on the 9th. July to the fore.   It is however in terms of the general climatic conditions for the main Brazil coffee districts in recent years, not really foreseen to be anything of a threat and for the present, weather is not really proving to be factor within the coffee markets.  

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 28.07 usc/Lb., while this equates to a 23% 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 736 bags yesterday; to register these stocks at 1,515,258 bags.  There was meanwhile a larger in number 2,735 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,789 bags. 

The commodity markets had yet another dismal day yesterday, with the overall macro commodity index taking a softer track for the day.  The Copper, Corn and Gold markets nevertheless had a day of buoyancy and the London robust Coffee market was steady, while the Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Orange Juice, Wheat, Soybean and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.06% lower, to see this Index registered at 388.70.  The day starts with the U.S. Dollar tending a little softer and trading at 1.267 to Sterling and at 1.117 to the Euro, while North Sea Oil is near to steady and is selling at $ 43.65 per barrel. 

The coffee markets started the day yesterday on a mixed note and with the London market showing some early buoyancy, while the New York market had a softer start for the day and soon followed by the London market dipping pack into negative territory.   The pressure upon the London market was however soon countered and the markets entered the early afternoon trade with the London market on par and the New York market remaining within negative territory.   As the afternoon progressed the London market started to pick up support and once more moved back into positive territory, while the New York market came under further pressure and fell deeper into negative territory and seemingly had some influence upon the London market that drifted back to trade around par and set the markets for a mixed closed for the day. 

The London market ended the day on a near to steady note and having recovered 80% of the earlier losses of the day by the close, while the New York market ended the day on a very soft note and with 92.7% of the earlier losses of the day intact.   This close paints a soft technical picture for the New York market but one would think that there might nevertheless be some degree of caution over the potentially oversold nature of the market, which might assist to see the markets due a hesitantly steady start for early trade today, against the prices set yesterday, as follows: 

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

JUL    2055 – 2                                              JUL     119.35 – 2.60 

SEP    2172 – 2                                              SEP    122.05 – 2.55

NOV   2056 unch                                           DEC   125.60 – 2.50

JAN    2031 + 2                                              MAR   129.10 – 2.45

MAR   2016 + 8                                              MAY   131.50 – 2.40

MAY   2013 + 9                                              JUL    133.75 – 2.35

JUL    2028 + 9                                              SEP    135.90 – 2.30

SEP    2044 + 9                                              DEC   138.65 – 2.40

NOV   2053 + 9                                              MAR   141.45 – 2.50

JAN    2060 + 9                                              MAY   143.05 – 2.50    


Coffee Market Report June 21 2017

The European Coffee Federation have reported that the port ware house stocks held within the warehouses in the ports of Antwerp, Bremen, Hamburg, Genoa, Le Havre and Trieste increased by 284,733 bags or 2.64% during the month of March, to see these stocks registered at 11,060,317 bags as at the end of the month.   

These stocks do not however include the coffee stocks held within Europe in transit bulk containers, unreported private warehouses throughout Europe, as well as on site roaster industry inventory stocks and with the combination of Eastern and Western European consumption at approximately 1 million bags per week, it would more than likely add an additional 2.5 million bags to the coffee stocks within Europe. It would therefore appear that European coffee stocks for the end of March 2017, would have been sufficient to cater for a very safe number of around 14.5 weeks of roasting activity. 

The respected United States Department of Agriculture Service USDA have reported that they forecast that the new Tanzanian coffee crop shall increase by 9.52% to register a new crop of 1,150,000 bags, which shall be made up from a ratio of 52 to 48 arabica and robusta coffees.   This they foresee with the countries relatively modest domestic coffee consumption, shall allow for exports of close to 1.1 million bags for the forthcoming October 2017 to September 2018 coffee year. 

The report highlights that Tanzania has abundant land with appropriate conditions for significantly increased coffee production, but that due to the high percentage of aged coffee trees, poor agricultural practices and inputs and lack of inspiration from soft prices, there is very slow growth in the countries coffee production.   One might comment that the latter factor in terms of the prevailing soft reference prices within the volatile New York market does little to assist to inspire existing coffee farmers to invest in their farms, while it will do little to inspire further farmers to invest in coffee farming.   

Meanwhile the physical coffee in terms of arabica coffees in particular are somewhat stalled, with many consumer roasters stunned by the unforeseen negative nature of the speculative sector of the New York market, which has sold the market increasingly short and to completely unexpected lows.   Particularly so in terms of the generally accepted fact that there shall be a smaller Brazil arabica coffee crop this year, which had earlier in the year supported widespread belief in some degree of buoyancy due for the New York market for the second half of the year. 

Thus, with industry buyers tending to hold back for some perspective of where the bottom of the market might be, there is also the question as to how far short can the funds and speculative sectors of the market might be prepared to go.   While with the possibility of some degree of exhaustion coming into play on the part of the presently bearish Managed Money funds and the Speculative sectors of the volatile New York market, the other question might be how aggressive might be the recovery should some start to look to liquidate shorts and take profit out of the market and when this might take place.   Contributing for the present, a great degree of uncertainty within the physical coffee trade. 

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 30.52 usc/Lb., while this equates to a 24.49% 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 2,228 bags yesterday; to register these stocks at 1,514,522 bags.  There was meanwhile a larger in number 3,918 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,054 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 16,167 bags or 0.57% over the week of trade leading up to Monday 19th. June, to see these stocks registered at 2,781,667 bags on the day. 

The commodity markets had yet another dismal day yesterday and with a firmer U.S. dollar impacting negatively within many markets, with the overall macro commodity index taking a softer track for the day.  The Natural Gas, Sugar and Wheat markets nevertheless had a day of buoyancy, while the Oil, Cocoa, Coffee, Cotton, Copper, Orange Juice, Corn, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.56% lower, to see this Index registered at 392.85.  The day starts with the U.S. Dollar steady and trading at 1.263 to Sterling and at 1.113 to the Euro, while North Sea Oil is steady and is selling at $ 44.35 per barrel. 

The markets started the day yesterday with the London market trading around par, while the New York market started the day on a softer note and with the London market soon slipping south of par and to see both markets taking a softer track into the early afternoon trade.   As the day progressed both markets came under further pressure and with stop losses being triggered, to see the both markets slip deeper into negative territory.   This was particularly the case with the more volatile and fundamentally soft New York market, which slipped back to set one year lows for the day, but with both markets managing to bounce off the lows and post a marginal recover in late trade. 

The London market ended the day on a negative note and with 65.4% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 60.6% of the earlier losses of the day intact.  This close and with the technical picture for both markets tending to look negative does little to support confidence but perhaps with the late in the day partial recovery for the markets it might provide for a degree of caution and 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. 

JUL    2057 – 34                                            JUL     121.95 – 2.25 

SEP    2174 – 34                                            SEP    124.60 – 2.00

NOV   2056 – 31                                            DEC    128.10 – 1.95

JAN    2029 – 29                                            MAR   131.55 – 1.95

MAR   2008 – 27                                            MAY   133.90 – 1.95

MAY   2004 – 26                                            JUL    136.10 – 1.95

JUL    2019 – 25                                            SEP    138.20 – 2.00

SEP    2035 – 19                                            DEC   141.05 – 1.85

NOV   2044 – 19                                            MAR   143.95 – 1.55

JAN    2051 – 19                                            MAY   145.55 – 1.05    


Coffee Market Report June 20 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 13.05% over the week of trade leading up to Tuesday 13th. June; to register a new net short-sold position of 30,987 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.78%, to register a net long position of 33,090 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 13.52%, to register a net short sold position of 30,665 Lots.  This net short sold position which is the equivalent of 8,693,392 bags has most likely been further increased, following the mixed but overall more negative trade that has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market increase their net long position within this market by 1.78% during the week of trade leading up to Tuesday 13th. June; to register a net long position of 18,956 Lots.  This net long position which is the equivalent of 3,159,333 bags has most likely been little changed to perhaps marginally increased again, following the period of mixed but overall more positive trade that has since followed. 

The respected United States Department of Agriculture USDA have reported that the following a record crop of 2.3 million bags for Nicaragua during their last October 2016 to February 2017 harvest, that they forecast a follow-on crop of similar proportions for the next harvest.   The country they report presently produces a ratio of 98% arabica coffees, to 2% of robusta coffees. 

This past Nicaraguan coffee crop the USDA foresee shall fuel exports of in excess of 1.9 million bags for the present October 2016 to September 2017 coffee year, which shall be similar in volume for the forthcoming October 2017 to September 2018 coffee year.  

Reports from Colombia indicate that some districts are still encountering harvest interrupting rains for the incoming Mitaca crop, but seemingly there are coffees steadily coming to the mills and the exporters from many other districts.   Thus, indicating that while the weather interrupting delays have been causing some problems for exporters to keep up with their forward contract commitments, it has not proved to be that serious so far.  It has however limited the volumes of coffees available for prompt shipment new business, which is perhaps not so much a problem ahead of the slow summer roasting season for the mainstream consumer markets.  

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 30.98 usc/Lb., while this equates to a 24.47% 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 4,794 bags yesterday; to register these stocks at 1,512,294 bags.  There was meanwhile a larger in number 12,651 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 29,972 bags. 

The commodity markets had a rather dismal day yesterday, with the overall macro commodity index taking a softer track for the day.  The Sugar, New York arabica Coffee, Copper, Wheat and Soybean markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, London robusta Coffee, Cotton, Orange Juice, Corn, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.81% lower, to see this Index registered at 395.05.  The day starts with the U.S. Dollar steady and trading at 1.274 to Sterling and at 1.116 to the Euro, while North Sea Oil is steady and is selling at $ 45.50 per barrel. 

The markets started the day yesterday with the London market trading around par, while the New York market started the day with early buoyancy and with the markets maintaining this track through into the early afternoon trade.  As the afternoon progressed the inverted in nature prompt months within the London market came under some pressure and drifted back into negative territory and taking the forward months on a more modest softer track, while the New York market shed its gains and drifted back to trade around par.   The New York market did however recover in later trade and to move back into positive territory, while the London market bounced back from the lows, to post more modest losses. 

The London market ended the day on a negative note and with 73.9% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 65% of the earlier gains of the day intact.  This close provides little in the way of direction but with the news of the extensive net short positions of the Managed money funds and the speculative sectors of the New York market, one might think that it shall limit the downside for this volatile market and that the markets might 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. 

JUL    2091 – 18                                            JUL     124.20 + 0.65 

SEP    2108 – 17                                            SEP    126.60 + 0.65

NOV   2087 – 10                                            DEC    130.05 + 0.70

JAN    2058 – 4                                              MAR   133.50 + 0.70

MAR   2035 unch                                          MAY   135.85 + 0.75

MAY   2030 – 1                                              JUL    138.05 + 0.75

JUL    2044 – 2                                              SEP    140.20 + 0.80

SEP    2054 – 2                                              DEC   142.90 + 0.85

NOV   2063 – 2                                              MAR   145.50 + 0.85

JAN    2070 – 2                                              MAY   146.60 + 0.85    


Coffee Market Report June 19 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 13.52% during the week of trade leading up to Tuesday 13th. June; to register a net short sold position of 30,665 Lots on the day. This net short-sold position which is the equivalent of 8,693,392 bags has most likely been further increased, following the mixed but overall more negative trade that has since followed. 

The respected United States Department of Agriculture Foreign Agricultural Service have reported that despite their forecast for a smaller new Brazil crop this year of 52.1 million bags, that they foresee global coffee supply for the coming October 2017 to September 2018 coffee year to be approximately 159 million bags.  The dip in Brazil coffee production this year they report, shall be countered by increased coffee supply from the producer bloc of Mexico and Central America, Vietnam, Indonesia and India. 

The report does however also foresee global coffee consumption to be only marginally lower than coffee supply, at 158 million bags.   While the report forecasts declining global coffee stocks in the coming months, which shall tighten up coffee supply for the coming year.   Albeit that the forecasted decline in stocks is a relatively marginal 3.13% decline, to 34 million bags due to be carried over into the forthcoming coffee year. 

What is perhaps important to note from the report, is the view from the USDA that the world’s leading robusta coffee supplier Vietnam shall on the basis of robusta coffee exports since the small crop that was harvested over October 2016 to January 2017, have negligible carryover stocks of 1.2 million bags into what they foresee to be a 1.9 million bags larger new crop of 28.6 million bags, due at the end of this year.   This factor they foresee, shall result in 1 million bags decline in Vietnams coffee exports for the coming October 2017 to September 2018 coffee year, which they forecast at 24 million bags. 

Meanwhile the relatively tight supply of robusta coffees to support new business out of Vietnam continued to provide fundamental support for sentiment within the London market on Friday, which saw the market buck the negative influences of the softening value of the New York market.   To see the London market experiencing another positive day and with prices having rallied, to new two month highs and the arbitrage between the London and New York markets narrowing further.  

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 29.56 usc/Lb., while this equates to 23.47% 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 2,759 bags on Friday; to register these stocks at 1,517,088 bags.  There was meanwhile a larger in number 4,855 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 17,321 bags. 

The commodity markets had a mixed day on Friday, to see the overall macro commodity index taking something of a sideways track for the day.  The Oil, London robusta Coffee, Wheat, Corn, Soybean and Gold markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher, to see this Index registered at 398.27.  The day starts with the U.S. Dollar steady and trading at 1.276 to Sterling and at 1.119 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 45.75 per barrel. 

The London market and New York markets started the day on Friday with early buoyancy and with both markets holding steady in positive territory, into the early afternoon trade.   As the day progressed though the New York market started to falter and with sell stops being triggered to accentuate the losses, to suffer from a collapse and to slip by 4 usc/Lb. deeply back into negative territory.  The London market came under some degree of pressure but nevertheless managed to remain well within positive territory, while the New York market recovered some of the rather dramatic losses of the day. 

The London market ended the day on a positive note but with only 45.5% of the earlier gains of the day intact, while the New York market ended the day on a very negative note and with 77.8% of the earlier losses of the day intact.   This close does little to inspire but one might expect that with the news of the extended speculative net short sold position with the New York market that it might bring some degree of caution into play and to set the markets for perhaps a steady start for the London market and a degree of buoyancy for the New York market for early trade today, against the prices set on Friday, as follows: 

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

JUL    2109 + 19                                            JUL     123.55 – 2.25 

SEP    2125 + 20                                            SEP    125.95 – 2.10

NOV   2097 + 17                                            DEC    129.35 – 2.10

JAN    2062 + 18                                            MAR   132.80 – 2.10

MAR   2035 + 17                                            MAY   135.10 – 2.05

MAY   2031 + 15                                            JUL    137.30 – 2.05

JUL    2046 + 15                                            SEP    139.40 – 2.05

SEP    2056 + 15                                            DEC   142.05 – 1.95

NOV   2065 + 15                                            MAR   144.65 – 1.90

JAN    2072 + 15                                            MAY   145.75 – 1.90    


Coffee Market Report June 16 2017

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 224,169 bags or 3.25% during the month of May, to register these stocks at 7,114,523 bags at the end of the month.   This is noted to be the highest figure recorded for these stocks, since 1993 and when the New York market was trading in an economically unsustainable for producer’s price range of between 55 usc/Lb. and 70 usc/Lb.   

These stocks do not include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of 560,000 bags per week, would conservatively have been at least 1.1 million bags. If one is to consider the additional unreported stocks the end month stocks, this would equate to approximately 14.7 weeks of roasting activity, which may be considered to be more than a safe reserve and in fact, an economically excessive stock level. 

These stocks in North America and likewise similar in terms of stocks as a ratio of roasting demand being held within Europe and perhaps even more so in Japan, would indicate that overall mainstream consumer market stocks are perhaps as much as six million bags in excess to a safe requirement.   This factor continuing to impact negatively upon sentiment within the volatile New York market, where the managed money funds and the speculative sectors of the market have significant overall short sold positions. 

This is of course very much and arabica coffee scenario, as with robusta coffee exports potentially due to steadily decline out of a well sold Vietnam and despite fill in supply coming from Indonesia, Uganda, India and West Africa, the robusta coffee supply is foreseen to become relatively tight and producer friendly, in terms of price. 

There is of course still the in excess of 2.7 million bags of certified robusta coffee stocks being held against the London market that provides for some degree of insurance for the consumer market roasters and one would think that these might decline further, in the coming months.   Albeit that the conilon robusta coffees within these stocks, are seen to be in terms of cup quality, not very attractive to the European roasters.  

While one might suspect that there shall be with the narrowing arbitrage between the London robusta coffee market and the New York arabica coffee market, some increased interest on the part of some of the more flexible roasters in taking advantage of discounted aged arabica coffees within the substantial consumer market stocks, to substitute for relatively expensive robusta coffees.   Suggesting that in the coming months, there might be reason to believe in a degree of market support coming the fore, against declining overall consumer market stock levels.  

Meanwhile in Brazil where many leading arabica coffee districts have been experiencing unseasonal and harvest interrupting rains, the new crop harvest continues.   With the analyst Safras & Mercado estimating that so far 31% of the new crop has been harvested.  In this respect 54% of the new conilon robusta crop and 24% of the new arabica coffee crop. 

Concerns have already been voiced over the relatively low percentages of bolder bean screen 17 plus beans from the coffees coming in from the rain effected farms in South Minas, but one must note that with only a relatively small percentage so far harvested.  Speculating that one might expect larger bean size percentages to be due from the later maturing coffee cherries, which would by nature assist to improve the overall bean size within these cherries.  

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 32.57 usc/Lb., while this equates to 25.44% 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 1,706 bags yesterday; to register these stocks at 1,514,329 bags.  There was meanwhile a similar in number 1,683 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,176 bags. 

The commodity markets had a mixed day yesterday and tending softer for many markets, to see the overall macro commodity index taking a softer track for the day.  The Natural Gas, Coffee, Orange Juice, Wheat, and Corn markets had a day of buoyancy, while the Oil, Sugar, Cocoa, Cotton, Copper, Gold and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.4% lower, to see this Index registered at 398.13.  The day starts with the U.S. Dollar tending softer and trading at 1.277 to Sterling and at 1.117 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 46.05 per barrel. 

The London market and New York markets started the day yesterday trading around par and soon picking up support, to see the markets taking a positive track into the early afternoon trade.   As the afternoon progressed the markets started to attract more support and to add more value and this started the fundamentally supported London market upon a strong upside track and mirrored for a while by the New York market, but with the New York market faltering in late trade and shedding most of its more modest gains of the day.  

The London market ended the day on a very positive note and with 90.7% of the earlier gains of the day intact, while the New York market ended the day on a modestly positive note and with only 14.3% of the earlier gains of the day intact.  This close does though assist to improve the technical picture for the markets and inspires a degree of confidence, with both markets opening he day today on a follow through positive note, against the prices set yesterday, as follows: 

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

JUL    2090 + 52                                            JUL     125.80 + 0.25 

SEP    2105 + 49                                            SEP    128.05 + 0.30

NOV   2080 + 43                                            DEC    131.45 + 0.30

JAN    2044 + 33                                            MAR   134.90 + 0.25

MAR   2018 + 26                                            MAY   137.15 + 0.20

MAY   2016 + 26                                            JUL    139.35 + 0.15

JUL    2031 + 26                                            SEP    141.45 + 0.15

SEP    2041 + 23                                            DEC   144.00 + 0.10

NOV   2050 + 20                                            MAR   146.55 + 0.10

JAN    2057 + 20                                            MAY   147.65 + 0.05    


Coffee Market Report June 15 2017

There was little in the way of news coming to the coffee markets yesterday, with the markets mixed and with the New York market continuing to suffer from the prevailing bearish sentiment, while the London market continues to attract support from the perception of the prospects for tighter supply of robusta coffees.  

There are however continued delays for forward sold export commitments from Colombia, which comes with the delayed deliveries from many farmers, who have experienced unseasonal rain interruptions for their new Mitaca harvest.   This is something of a frustration for the consumer market industries but not proving to be a disaster so far, as there is presently more than sufficient alternative fill-in fine washed arabica coffee supply within the market, in terms of new crop Central American stocks and new crop Peru coffees.  

Meanwhile the influence of Brazil where the country takes the Corpus Christi holiday today and with many companies extending the holiday for tomorrow, to make for an extended long weekend, is off the field of play.  It is likewise the case in terms of physical coffee trade, with many European markets also taking the holiday and to be followed on Monday, when the world’s number three producer Colombia shall take a delayed Corpus Christi holiday.   This pointing towards lacklustre physical coffee trade for arabica coffees, for the next couple of trading days.   

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 34.49 usc/Lb., while this equates to 27% 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 4,700 bags yesterday; to register these stocks at 1,512,623 bags.  There was meanwhile a larger in number 11,285 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 23,859 bags. 

These certified stocks of which 68.73% are being held within the European based certified warehouses of the exchange in Antwerp, Barcelona, Bremen and Hamburg, as against the minimal share held within the U.S.A. based warehouses in Houston, Miami, New Orleans, New York and Virginia, remain dominated by the Central and South American producers.   

In this respect, the producer bloc of Mexico and Central America and dominated by the contribution from Honduras, account for 44.74% of the stocks.   Followed by Colombia with a 19.03% share of the socks, Peru with a 15.46% share of the stocks and Brazil with a 4.44% share of the stocks.   The Latin Americans while holding a combined 83.67% share, are followed by the African producers with a 13.59% share, the Indians with a 2.22% share and Papua New Guinea with a 0.52% share of the stocks. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 12,667 bags or 0.45% over the week of trade leading up to Monday 12th. June, to register these stocks at 2,797,833 bags, on the day.  

The commodity markets had a mixed day yesterday but with the influential oil markets taking something of a tumble, the overall macro commodity index took a softer track for the day.   The Cocoa, London robusta Coffee, Wheat, Gold and Silver markets had a day of buoyancy and the Soybean market was steady, while the Oil, Natural Gas, Sugar, New York arabica Coffee, Cotton, Copper, Orange Juice and Corn markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.56% lower, to see this Index registered at 399.74.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.274 to Sterling and at 1.122 to the Euro, while North Sea Oil is steady in early trade and selling at $ 45.65 per barrel. 

The London market and New York markets started the day yesterday on a steady note and with the London market tending to the better side of par and the New York market close to par and taking a relatively steady track, into the early afternoon trade.   As the afternoon progressed the London market started to attract support and to head up into positive territory and followed by a recovery for the New York market, but while the London market managed to hold on to much of its fundamentally inspired gains the New York market and perhaps influenced by the negative nature of the overall macro commodity index faltered, to slip back into negative territory in late trade.   

The London market ended the day on a positive note and with 57.1% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 81.8% of the earlier losses of the day intact.  This mixed close does little to inspire and might be expected to influence only a near to steady start for the London market and perhaps a corrective 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. 

JUL    2038 + 16                                            JUL     125.55 – 0.85 

SEP    2056 + 16                                            SEP    127.75 – 0.90

NOV   2037 + 11                                            DEC    131.15 – 0.95

JAN    2011 + 8                                              MAR   134.65 – 0.90

MAR   1992 + 5                                              MAY   136.95 – 0.95

MAY   1990 + 3                                              JUL    139.20 – 0.85

JUL    2005 + 5                                              SEP    141.30 – 0.80

SEP    2018 + 6                                              DEC   143.90 – 0.80

NOV   2030 + 11                                            MAR   146.45 – 0.80

JAN    2037 + 11                                            MAY   147.60 – 0.70    


Coffee Market Report June 14 2017

The International Coffee Organisation have reported that global coffee exports for the month of April were 5.3% lower than the same month last year, at a total of 9.5 million bags.   This decline they say, is related mostly to the 13.5% dip in Brazil coffee exports and followed by the 6.9% dip in Vietnam coffee exports, which impacted upon global coffee supply for the month. 

The International Coffee Organisation have furthermore reported that despite this dip in April global coffee supply the cumulative global coffee exports for the first seven months of the present October 2016 to September 2017 coffee year are still 3.1% higher than the same period in the previous coffee year, at a total of 69.5 million bags.   These exports having contributed to the significant consumer market stocks, which continue to impact upon the presently bearish sentiment within the New York market. 

This prevailing sentiment within the New York market is seemingly ignoring the fact that the world’s largest producer Brazil is presently harvesting what it generally accepted to be a smaller new arabica coffee crop and likewise, that the world second largest producer Vietnam is steadily liquidating its now relatively modest robusta coffee stocks.    The latter factor well illustrated by the buoyancy noted for the prompt delivery months of the London robusta coffee market that is inverted in nature and likewise, by the narrowing of the arbitrage between the London and New York markets. 

Following the report from the U.S. weather forecasters that foresee little chance for a new El Niño phenomenon developing within the Pacific Ocean on the short term, the relatively close at hand Australian weather authorities have likewise reported that sea temperatures within the Pacific Ocean are normal, but that there is some cooling being reported within areas experiencing relatively strong trade winds.  This latter data indicating that an El Niño phenomenon might develop late in the year, but with all indications so far, that this would only be a mild El Niño and would therefore, not be threatening to climatic conditions for the Pacific rim countries and including the coffee producing countries. 

In terms of the physical coffee markets trade remains generally lacklustre in nature and ahead of the seasonally slow summer roasting season for the main northern hemisphere consumer market countries, while with most companies in Brazil due to take the optional Corpus Christi holiday tomorrow and many remaining closed on Friday for an extended long weekend, there is little activity expected out of this leading producer until next week.  Albeit that with the prevailing soft nature of the related reference prices of the New York market and he relatively steady nature of the Brazil Real that is presently trading at 3.31 to the U.S. dollar, there is anyhow no inspiration for Brazil’s arabica coffee farmers to be showing any degree of new crop selling aggression. 

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.12 usc/Lb., while this equates to 28.08% 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 6,095 bags yesterday; to register these stocks at 1,517,323 bags.  There was meanwhile a larger in number 8,415 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 12,574 bags. 

It was another mixed day for the commodity markets yesterday, with overall macro commodity index taking a softer track for the day.   The Oil, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.19% lower, to see this Index registered at 401.98.  The day starts with the U.S. Dollar near to steady and trading at 1.277 to Sterling and at 1.121 to the Euro, while North Sea Oil is steady in early trade and selling at $ 47.05 per barrel. 

The London market and New York markets started the day yesterday on a steady note and both markets stayed close to par, into the early afternoon trade.  However, as the afternoon progressed the both markets started to lose some weight and fell back into negative territory, to take something of an erratic sideways track for the rest of the day. 

The London market ended the day on a negative note and with 72.7% of the modest losses of the day intact, while the New York market ended the day on a negative note and with 62.2% of the more substantial losses of the day intact.   This close does little to inspire but one might nevertheless expect to see a cautious steady start due for early trade today against the prices set yesterday, as follows: 

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

JUL    2022 – 8                                              JUL     126.40 – 1.20 

SEP    2040 – 8                                              SEP    128.65 – 1.15

NOV   2026 – 12                                            DEC    132.10 – 1.20

JAN    2003 – 13                                            MAR   135.55 – 1.25

MAR   1987 – 12                                            MAY   137.90 – 1.20

MAY   1987 – 13                                            JUL    140.05 – 1.25

JUL    2000 – 13                                            SEP    142.10 – 1.25

SEP    2012 – 13                                            DEC   144.70 – 1.20

NOV   2019 – 13                                            MAR   147.25 – 1.15

JAN    2026 – 13                                            MAY   148.30 – 1.15    


Coffee Market Report June 13 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 49.15% over the week of trade leading up to Tuesday 6th. June; to register a new net short-sold position of 27,410 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 4.42%, to register a net long position of 32,834 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 43.28%, to register a net short sold position of 27,011 Lots.  This net short sold position which is the equivalent of 7,657,499 bags and following the period of mixed but overall more positive trade that has since followed, has most likely been marginally reduced and likewise, that of the Managed Money fund sector of the market. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net long position within this market by 8.36% during the week of trade leading up to Tuesday 6th. June; to register a net long position of 18,625 Lots.  This net long position which is the equivalent of 3,104,167 bags has most likely been little changed to perhaps marginally increased again, following the period of mixed but overall more positive trade that has since followed. 

The extensive net short sold positions reported from the New York market on the part of the Managed Money Funds and the Speculative sectors of the market, would perhaps indicate that the downside potential of the market might be limited.   However, for the present there has been little in the way of fundamental news coming to the markets to counter the overbearing pressure of the substantial consumer market coffee stocks, which with no frightening news coming to the fore from Brazil at present, tend to dampen speculative spirits within the market. 

Following the smaller new robusta coffee crop in Vietnam that was harvested over the period from October 2016 to January 2017 and followed by good volume sales to the countries exporters, the internal market farm stocks are seen to be relatively low, which is resulting on increasing price resistance on the part of the farmers and the internal traders for the dwindling stocks.    There is of course no official clarity on the coffee stock levels within the country, but indications are that as at the end of last month that exporters with forward contract commitments to fulfil in hand were holding approximately 6.5 million bags of stocks, while the overall national stocks were only a relatively modest 9 million bags. 

One might comment that if these numbers were correct and with Vietnam now having a domestic market demand of approximately 3 million bags per annum, that the country shall require at least 1.25 million bags of coffee to last through to October this year and the impact of the early coffees from the new crop.  This would further indicate that it would leave little better than 1.3 million bags of coffee per month available for export over the period June to November, with no stocks available to cater for any possible delay in the start of the deliveries from the new crop. 

The potentially tightening supply from Vietnam, is very much a fundamental supportive factor for the London market, which is evident from the modes nature of the prevailing arbitrage between the London and New York markets.   While the situation in Vietnam and with little contribution expected from the relatively modest new Brazil conilon robusta crop this year, is assisting to buoy export differentials and value for the robusta coffees coming to the fore from Indonesia, India, Uganda and West Africa.  

The new Vietnam crop is with the prevailing fair-weather conditions being forecasted to be a larger crop, but even if the crop is between 2 million to 3 million bags larger as many predict, the liquidation of Vietnams robusta coffee stocks during this year, would most likely result in continued internal market price resistance for new crop coffee sales.   This is potentially a factor that would continue to buoy robusta coffee prices and the fortunes for the London coffee market, into the coming year.   

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.90 usc/Lb., while this equates to 28.43% 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 1,398 bags yesterday; to register these stocks at 1,511,228 bags.  There was meanwhile a larger in number 1,584 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 20,989 bags. 

It was a mixed but generally soft day for the commodity market yesterday, with the overall macro commodity index taking a softer track for the day.    The Oil, Cocoa and Coffee markets had a day of buoyancy, while the Natural Gas, Sugar, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a softer day’s trade.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.72% lower, to see this Index registered at 402.75.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.267 to Sterling and at 1.119 to the Euro, while North Sea Oil is steady in early trade and selling at $ 46.95 per barrel. 

The London market and New York markets started the day on Friday with early buoyancy and maintained this track into the early afternoon trade, which set a positive base for further gains within the New York market.    As the afternoon progressed the New York market soon hit something of a ceiling and while the London market took a positive sideways track for the rest of the day, the New York market retreated into more modest positive territory. 

The London market ended the day on a very positive note and with 96.4% of the earlier gains of the day intact, while the New York market ended the day on more modestly positive note and with only 35.2% of the earlier gains of the day intact.  This close and with the New York market struggling to remain in positive territory does little to inspire and one might think that the markets might nevertheless be due for a steady start for early trade today against the prices set yesterday, as follows: 

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

JUL    2030 + 28                                            JUL     127.60 + 1.05 

SEP    2048 + 27                                            SEP    129.80 + 0.95

NOV   2038 + 27                                            DEC    133.30 + 0.95

JAN    2016 + 25                                            MAR   136.80 + 0.90

MAR   1999 + 23                                            MAY   139.10 + 0.85

MAY   2000 + 25                                            JUL    141.30 + 0.80

JUL    2013 + 25                                            SEP    143.35 + 0.80

SEP    2025 + 25                                            DEC   145.90 + 0.90

NOV   2032 + 25                                            MAR   148.40 + 1.00

JAN    2039 + 25                                            MAY   149.45 + 1.00    


Coffee Market Report June 12 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 43.28% during the week of trade leading up to Tuesday 6th. June; to register a net short sold position of 27,011 Lots on the day. This net short-sold position which is the equivalent of 7,657,499 bags has most likely been little changed to perhaps marginally decreased, following the mixed but overall steady trade that has since followed. 

The Brazilian Exporters Association Cecafé have reported that the countries green coffee exports for the month of May were 0.9% lower than the same month last year, at a total of 2.21 million bags.   These exports they comment were mostly related to arabica coffees, with the exports of conilon robusta coffees having been 71.2% lower at a very modest 19.600 bags.   Thus, indicating little change for the month, in terms of arabica coffee exports for the month. 

Adding to the prevailing negative reports towards the fortunes of the New York market on Friday was a report from the Brazilian exporter Comexim, who have forecasted that the new crop that is presently in harvest, shall be approximately 52 million bags.   This they say is only modestly 5.45% lower than their estimates for last year’s crop and is a new crop forecast that falls within the higher end of the range of other new crop forecasts, which are being viewed by the market players.  

The report does however seemingly anticipate rising global coffee consumption, as despite the forecast for a relatively modest decline in production for this year, they foresee global coffee supply deficit for the forthcoming October 2017 to September 2018 to be 4.2 million bags.   However, the report also forecasts the potential for and unforeseen negative weather conditions aside, the follow on 2018 Brazil crop to come to the fore with as much as 65 million bags. 

This latter forecast for the 2018 Brazil crop on the part of Comexim might be seen to be overly ambitions by many, but it does nevertheless follow the line of many other forecasts, which do foresee that so long as weather does not become a factor later in the year and early next year, a significantly larger Brazil coffee crop for next year.   Which is a factor that assists to dampen speculative spirts within the volatile New York market for the present.  

Brazil’s largest coffee cooperative Cooxupé have reported that the cooperative has so far taken delivery of 11.4% of the coffees expected from their members this year, which is a little better than the 9.9% collected at the same time last year.  While they also report that so far the quality of these arabica coffees has been generally of relatively good quality, which would with the later maturing cherries most usually of better overall size and quality, to a reasonable outturn for their member farmers this year.   Albeit that the cooperative does voice concern over the value of the reference prices of the New York market at present, against which they have to price their new crop coffee sales. 

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 37.18 usc/Lb., while this equates to 28.85% 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 4,339 bags on Friday; to register these stocks at 1,509,830 bags.  There was meanwhile a larger in number 4,506 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,573 bags. 

It was a mixed but mostly more positive day for the commodity markets on Friday, with the overall macro commodity index taking a positive track for the day.    The Oil, Natural Gas, Cocoa, Coffee, Copper, Orange Juice, Corn and Soybean markets had a day of buoyancy, while the Sugar, Cotton, Wheat, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.26% higher, to see this Index registered at 405.68.  The day starts with the U.S. Dollar tending a little softer and trading at 1.274 to Sterling and at 1.121 to the Euro, while North Sea Oil is near to steady in early trade and selling at $ 46.55 per barrel. 

The London market and New York markets started the day on Friday with early buoyancy and maintained this track into the early afternoon trade, which set a positive base for further gains within both markets, as the afternoon progressed.   However, as the day progressed, the London market started to come off the boil and dropped back from the highs, which was followed by the New York market, which fell back more significantly and headed back to par, to take a hesitant sideways track through to the close.   

The London market ended the day on a positive note and with 77.8% of the earlier gains of the day intact, while the New York market ended the day on a steady note, but with only 0.9% of the earlier gains of the day intact.  This close and with the New York market struggling to remain in positive territory does little to inspire and one might think to see little better than a steady start for early trade today against the prices set on Friday, as follows: 

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

JUL    2022 + 19                                            JUL     126.55 + 0.20 

SEP    2021 + 21                                            SEP    128.85 + 0.20

NOV   2011 + 16                                            DEC    131.35 + 0.20

JAN    1991 + 12                                            MAR   135.90 + 0.20

MAR   1976 + 10                                            MAY   138.25 + 0.25

MAY   1975 + 9                                              JUL    140.50 + 0.25

JUL    1988 + 10                                            SEP    142.55 + 0.25

SEP    2000 + 10                                            DEC   145.00 + 0.25

NOV   2007 + 10                                            MAR   147.40 + 0.25

JAN    2014 + 10                                            MAY   148.45 + 0.25    


Coffee Market Report June 09 2017

The respected Brazilian analysts Safras & Mercado have reported that they estimate that so far 45% of the new conilon robusta coffee crop has been harvested and 19% of the new arabica coffee crop, out of their forecast for 11.5 million bags of conilon coffees and 39.6 million bags of arabica coffees, due from what they foresee to be a 51.1 million bags new crop. 

This new crop forecast on the part of Safras & Mercado is however being disputed by many internal market players within Brazil, who assess that the forecast might be approximately 10% larger than reality.   However there are many others and including international market players with a strong Brazilian footprint, who see this forecast to be close to reality and for the present and evident by the relatively bearish sentiment within the New York arabica coffee market, it would seem that the belief remains more in line with the higher numbers being forecasted. 

Meanwhile Brazil weather conditions and following some unseasonal rains over the main arabica coffee districts within Brazil, the weather conditions have returned to more normal for the year dry conditions for most of the coffee districts.  Albeit that many districts have been reporting relatively warm conditions for the start of the month, but there is a cold front now moving in from the south and bringing with it seasonal colder winter weather conditions.   But with most forecasts indicating that these conditions do not bring with them and frost risk. 

The U.S. government National Weather Service’s Climate Prediction Centre have reported that so far there are no active El Niño or La Niña patterns developing within the Pacific Ocean and this is likely to continue for the next three to four months, but that they do still foresee a 35% to 50% chance for an El Niño to start to come into the play by the end of the year.   This news assisting to restrain speculative aggression towards the coffee markets, which for the present encounter a complete lack of fundamental threat for longer term global coffee production into the coming year. 

In terms of the physical coffee market it remains lacklustre in nature, ahead of the slower summer roasting season for the main stream northern hemisphere markets.  While with declining internal market stocks contributing to internal market price resistance within Vietnam, the soft nature of the reference prices of the New York market contributing towards a lack of selling aggression for new crop arabica coffees within Brazil and internal market price resistance towards short sold exporters in Indonesia, tending to slow sales for the present.   

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 37.93 usc/Lb., while this equates to 29.48% 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 7,576 bags yesterday; to register these stocks at 1,505,491 bags.  There was meanwhile a smaller in number 5,672 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,079 bags. 

It was a mixed but mostly more positive day for the commodity markets yesterday, with the overall macro commodity index taking a positive track for the day.    The Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn and Soybean markets having a day of buoyancy, while the Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.52% higher, to see this Index registered at 404.64.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.272 to Sterling and at 1.120 to the Euro, while North Sea Oil is steady in early trade and selling at $ 46.15 per barrel. 

The coffee markets opened the day yesterday with the London market taking remaining hesitantly close to par, while the New York market started the day with modest buoyancy and with the markets retaining this stance, into the early afternoon trade.   Both markets soon started to falter and to drift back into modest negative territory but this reversal of the fortunes for the markets were short lived, with the London market returning to par and the New York market once again back into positive territory.   With the London market finally joining the New York market in positive territory for late trade, which saw the markets and in line with the overall macro commodity index, ending the day on the positive side of par. 

The London market ended the day on a positive note and with 81.8% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 63.2% of the earlier gains of the day intact.  This modestly positive nature of this close does however do little to inspire confidence and one might suspect that the markets might only be due for a hesitantly steady start for early trade today, against the prices set yesterday, as follows: 

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

JUL    1983 + 11                                            JUL     126.35 + 0.60 

SEP    2000 + 9                                              SEP    128.65 + 0.60

NOV   1995 + 6                                              DEC    131.15 + 0.55

JAN    1979 + 5                                              MAR   135.70 + 0.65

MAR   1966 + 6                                              MAY   138.00 + 0.65

MAY   1966 + 8                                              JUL    140.25 + 0.70

JUL    1978 + 9                                              SEP    142.30 + 0.70

SEP    1990 + 8                                              DEC   144.75 + 0.65

NOV   1997 + 8                                              MAR   147.15 + 0.55

JAN    2004 + 8                                              MAY   148.20 + 0.55    


Coffee Market Report June 08 2017

The Vietnam Customs Authorities have reported that the countries coffee exports fort the month of May were marginally higher than their earlier estimate, at a total of 2.03 million bags.   This figure would indicate that the countries coffee exports for the first five months of this year, would total approximately 11.83 million bags.   

One might speculate that with the internal market stocks having declined to relatively low levels and with the greater part of exporter stocks already related to forward contract commitments and following the smaller crop that was harvested over October 2016 to January 2017, that export volumes for this month and through to October this year, shall continue to be relatively modest.  To result in Vietnam coffee export volumes for the next seven months to mostly be between 1.5 million and 1.8 million bags per month.   

The well-respected U.S Department of Agriculture Foreign Agriculture service USDA have upgraded their earlier assessment of the last Honduras coffee crop by a significant 14.3%, to now assess this crop to have been 6,287,000 bags.   Assessing that this crop shall assist to fuel exports of 6,133,000 bags during the present October 2016 to September 2017 coffee year and against this, one might note that the countries National Coffee Institute had already reported exports of 5.02 million bags for the first eight months of this present coffee year.   The USDA report thus indicating, potential exports of 1.1 million bags over the four months from June to September this year. 

Further to this the USDA have forecasted that the new Honduras coffee crop that shall be harvested between October 2017 to February 2017 and with this new crop now starting to develop upon the trees, shall be 3.66% lager than the past 2016/2017 crop, at a total of 6,517,000 bags.   This crop to ensure that Honduras shall maintain its dominance within the regional Mexico and Central American producer bloc, while remaining the second only to Colombia in terms of consumer market supply of fine washed arabica coffees.  

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 37.74 USc/Lb., while this equates to 29.47% 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 2,627 bags yesterday; to register these stocks at 1,497,915 bags.  There was meanwhile a lager in number 8,497 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,751 bags. 

It was a mixed day on the commodity markets yesterday but with the Oil markets under pressure, the overall macro commodity index took a soft track for the day.  The Sugar, New York arabica Coffee, Cotton, Copper, Wheat, Corn and Soybean markets nevertheless had a day of buoyancy and the Natural Gas market was steady, while the Oil, Cocoa, London robusta Coffee, Orange Juice, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.35% lower, to see this Index registered at 402.53.  The day starts with the U.S. Dollar near to steady and trading at 1.294 to Sterling and at 1.124 to the Euro, while North Sea Oil is tending softer in early trade and selling at $ 47.20 per barrel. 

The coffee markets opened the day yesterday with the London market taking a modestly softer track, while the New York market showed some early buoyancy and with the market retaining this stance into the early afternoon trade.  As the afternoon progressed the London market recovered and moved back to join the New York market in positive territory, but this was short lived and the London market fell back into negative territory, while the New York market lost some weight and moved back towards par. 

The London market ended the day on a soft note and with 81.2% of the earlier losses of the day intact, while the New York market ended the day on steady note and with only 13.6% of the earlier gains of the day intact.  This close has done little to inspire and the day has started with the London market taking an erratic steady stance, while the New York market is once again showing some degree of hesitant buoyancy and providing little indication for where the markets might go later in the day, against the prices set yesterday, as follows:   

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

JUL    1972 – 13                                            JUL     125.75 + 0.20 

SEP    1991 – 13                                            SEP    128.05 + 0.15

NOV   1989 – 14                                            DEC    131.60 + 0.15

JAN    1974 – 14                                            MAR   135.05 + 0.15

MAR   1960 – 13                                            MAY   137.35 + 0.20

MAY   1958 – 12                                            JUL    139.55 + 0.25

JUL    1969 – 12                                            SEP    141.60 + 0.30

SEP    1982 – 12                                            DEC   144.10 + 0.30

NOV   1989 – 12                                            MAR   146.60 + 0.35

JAN    1996 – 12                                            MAY   147.65 + 0.35    


Coffee Market Report June 07 2017

The Colombian Coffee Federation have reported that the countries coffee production for the month of May was 262,000 bags or 22.52% lower than the same month last year, at a total of 901,000 bags.   This dip in production follows many months of improved production volumes and contributes to the countries cumulative coffee production for the first eight months of the present October 2016 to September 2017 coffee year to being 181,000 bags or 1.89% higher than the same period in the previous coffee year, at a total of 9,734,000 bags.

In terms of coffee exports from Colombia the Coffee Federation have reported that the countries coffee exports for the month of May were 80,000 bags or 8.69% lower than the same month last year, at a total of 840,000 bags.   This contributes to the countries cumulative exports for the first eight months of the present October 2016 to September 2017 coffee year to being 555,000 bags or 1.06% higher than the same period in the previous coffee year, at a total of 9,209,000 bags.

The disruptions to shipments out of Buenaventura which is one of the main ports in Colombia continues, due to the successive twenty-one days of civil strike action in this port city.  The authorities have though reported that the strike action has ended on Tuesday and there is now a degree of catch up required for the backlog of shipments already in the port, to clear the way for regular shipments to proceed in a more scheduled manner. There is limited cause for much concern within consumer markets meanwhile, where coffee stocks are overall relatively comfortable and the northern hemisphere coffee consumer countries move into their traditionally slower roasting and consumption summer months.

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.99 USc/Lb., while this equates to 28.92% 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 5,911 bags yesterday; to register these stocks at 1,495,288 bags.  There was a total 1,324 bags reduction reported to  the number of bags pending grading for this exchange; to register these pending grading stocks at 41,248 bags.

It was a mixed day on the commodity markets yesterday, with the latest round of diplomatic fissures reverberating through in the Middle East initially sent a tremor through the oil markets early on in the session.  It was another weak day for the U.S. Dollar, while the Sterling slightly lower ahead of the countries general election on Thursday.  The oil markets posted a recovery during the session to finish on a positive note, as was it a firmer day for Corn, Sugar, Soybean, Wheat, Gold, Silver, Platinum and Palladium.  Cotton was mostly flat and a softer day for Cocoa, Coffee, Copper and Orange Juice. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.17% higher, to see this Index registered at 403.95.  The day starts with the U.S. Dollar steady and trading at 1.29 to Sterling and at 1.126 to the Euro, while North Sea Oil is steady in early trade and selling at $ 48.99 per barrel.

The coffee markets opened the day yesterday on a positive note, with both markets above par in early trade.  New York maintained a buoyant stance in the morning session while London slipped back through to negative territory as the morning progressed.  There was a later attempt to push London into the positive which faltered and set the tone in London for a mostly steady session although in a narrow range and in negative territory for the day.  With speculative and investor fund activity dictating direction within the markets and limited fundamental news, the first notice day in the prompt month is approaching and the New York arabica market registered another hefty volume day. The mid-morning session in New York took on a mildly softer track and levels held within a tight band on either side of steady toward the afternoon.  A fresh round of selling activity came to the fore as the afternoon progressed and with limited buyer support as the session drew to a close, a lower result on the day.  Thus, a softer outcome in both markets for the day having mostly lost the positive ground attained on the previous session.  New York set the close on the day at the low and London finished slightly above the low of the day in this market, to set the close yesterday, as follows:

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

JUL    1985 – 11                                            JUL     125.55 – 2.90 
SEP    2004 – 11                                            SEP    127.90 – 2.90
NOV   2003 – 10                                            DEC    131.45 – 2.90
JAN    1988 – 9                                              MAR   134.90 – 2.90
MAR   1973 – 9                                              MAY   137.15 – 2.85
MAY   1970 – 9                                              JUL    139.30 – 2.90
JUL    1981 – 9                                              SEP    141.30 – 2.90
SEP    1994 – 9                                              DEC   143.80 – 2.90
NOV    2001 – 9                                              MAR   146.25 – 2.90
JAN     2008 – 9                                              MAY   147.30 – 2.90   


Coffee Market Report June 06 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 16.06% over the week of trade leading up to Tuesday 30th May, to register a new net short-sold position of 18,378 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.24%, to register a net long position of 34,352 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 17.92%, to register a net short sold position of 18,852 Lots.  This net short sold position which is the equivalent of 5,344,458 bags and following the period of mixed trade that has since followed, has most been marginally reduced and likewise, that of the Managed Money fund sector of the market.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net long position within this market by 7.56% during the week of trade leading up to Tuesday 30th May; to register a net long position of 20,324 Lots.  This net long position which is the equivalent of 3,387,333 bags has most likely been trimmed, following the period of mixed but overall softer trade that has since followed.

The September to September contracts arbitrage between the London and New York markets widened yesterday, to register this at 39.40 usc/Lb., while this equates to 30.12% 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 4,239 bags yesterday; to register these stocks at 1,489,377 bags.  There was a total 8,983 bags reduction reported to  the number of bags pending grading for this exchange; to register these pending grading stocks at 39,924 bags.

It was a mixed day on the commodity markets yesterday, a number of countries observed Whit Monday, with these markets either closed for national holiday or relatively inactive in trade terms. The directional questions post the latest round of U.S. economic data and prospective developments surrounding the upcoming British elections all contributing toward a measure of uncertainty.  It was a steadier day for the U.S. Dollar, while Oil markets registered a lower day.  It was similarly a softer day for Cocoa, Cotton, Copper, Orange Juice, Corn and Wheat, while a more positive day for Sugar, Coffee, Soybean, Gold, Silver and Palladium, with Platinum steady on the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.075% lower, to see this Index registered at 403.27.  The day starts with the U.S. Dollar steady and trading at 1.291 to Sterling and at 1.126 to the Euro, while North Sea Oil is steady in early trade and selling at $ 48.71 per barrel.

The coffee markets opened the day yesterday on a positive note in New York and a steady to unchanged note in London.  The first attempts to the positive in London were pushed back to below par, where this market stayed in a narrow and mildly negative position for much of the morning.  In contract, New York set the tone for a mildly positive morning session which gained in support as the America’s opened for their business day and in a degree of buoyancy supported by speculative rolling out of the prompt month, the earlier narrowly positive stance gapped higher and into a new trading range as the afternoon set.  This positive mood in New York assisted to provide an additional boost in London and this market followed with another push to the positive triggering buying support to see this market track upwards toward the latter half of the day.  Once the ceiling appeared to be reached for the session both markets steadied out toward the end of the day with a degree of consolidation in New York.  It was another good volume day in New York and a decent volume day in London and both markets set a positive close near to the days’ highs in both markets, as follows:

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

JUL     1996 + 15                                            JUL     128.45 + 2.90
SEP     2015 + 13                                           SEP     130.80 + 2.90
NOV    2013 + 12                                            DEC    134.30 + 2.85
JAN     1997 + 12                                            MAR   137.80 + 2.90
MAR    1982 + 11                                            MAY   140.00 + 2.85
MAY    1979 + 11                                            JUL    142.10 + 2.85
JUL     1990 + 11                                            SEP    144.20 + 2.80
SEP     2003 + 11                                            DEC   146.70 + 2.80
NOV    2010 + 11                                            MAR   149.15 + 2.75
JAN     2017 + 11                                            MAY   150.20 + 2.75   


Coffee Market Report June 05 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 17.92% during the week of trade leading up to Tuesday 30th May; to register a net short sold position of 18,852 Lots on the day. This net short-sold position which is the equivalent of 5,344,458 bags has most likely been little changed to perhaps marginally trimmed, following the mixed overall softer trade that has since followed. 

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 37.09 usc/Lb., while this equates to 28.99% 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 8,421 bags on Friday; to register these stocks at 1,485,138 bags.  There was meanwhile 5,617 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,907 bags.

 The commodity markets were mixed on Friday, most turning softer as the latest round of economic indicators in job data released in leading consumer country U.S.A., appeared to be negatively received by the markets.  The U.S. Dollar lost ground against a basket of other currencies while the safe haven Gold markets, registered improvements on the day.  It was a softer day for Oil, Sugar, Coffee, Cocoa, Cotton, Copper, while in weather related buoyancy, a positive close on the day for Wheat, Corn, Soybean markets and a positive day for Gold, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% lower, to see this Index registered at 403.57.  The day starts with the U.S. Dollar steady and trading at 1.286 to Sterling and at 1.126 to the Euro, while North Sea Oil is firm in early trade and selling at $ 49.25 per barrel.

 The London market started the day on a softer note, while the New York market had a steady to positive start for the day’s trade.  The morning session set a mildly negative track in both markets although London found a degree of underlying buyer support and this market moved back into positive territory by midsession to gradually build on and then maintain the gains for much of the afternoon.  The New York market registered another heavy volume day in the front months and this market which had started with a degree of buoyancy, slipped through par by mid session and into negative territory.  The softer track in New York initially brought underlying buyer support back to the floor, however this was short lived and the afternoon session in this market turned, to once more break through par with speculative sellers weighing in, the latter day in New York saw the trend move incrementally lower.  A generally softer sentiment across the commodities board on Friday would seem to have weighed in and the session ended the week London hardly changed on the day, after a generally positive session and a close in New York at the low posted on the day, against the prices set on Friday, as follows:

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

JUL     1981 Unch                                         JUL     125.55 – 2.15
SEP     2002 +  1                                           SEP     137.90 – 2.15
NOV    2001 Unch                                         DEC    131.45 – 2.10
JAN     1985 – 4                                             MAR   134.90 – 2.10
MAR    1971 – 4                                             MAY   137.15 – 2.05
MAY    1968 – 4                                             JUL    139.35 – 2.00
JUL     1979 – 6                                             SEP    141.40 – 2.00
SEP     1992 – 8                                             DEC   143.90 – 1.95
NOV    1999 – 8                                             MAR   146.40 – 1.85
JAN     2006 – 8                                             MAY   147.45 – 1.85    


Coffee Market Report June 02 2017

The National Coffee Institute in Honduras have reported that the countries coffee exports for the month of May were 369,670 bags or 51.2% higher than the same month last year, at a total of 1,091,681 bags.   This improved performance they report, has contributed to the countries cumulative exports for the first eight months of the present October 2016 to September 2017 coffee year to be 34% higher than the same period in the previous coffee year, at a total of 5.02 million bags. 

The National Coffee Institute in Costa Rica have reported that the countries coffee exports for the month of May were 9,720 bags or 5.64% higher than the same month last year, at a total of 182,180 bags.   The report notes that this has contributed to the countries cumulative coffee exports for the first eight months of the present October 2016 to September 2017 coffee year to be 15% lower than the same period in the previous coffee year, at a total of 707,556 bags.   Albeit that when calculating the month by month reports since October last year, the cumulative exports are a higher 778,890 bags. 

The Trade Ministry in Brazil have reported that the countries coffee exports for the month of May were 128,180 bags or 5.91 higher than the same month last year, at a total of 2,296,023 bags.  This relatively good number is registered ahead of what is foreseen to be a more modest new arabica coffee crop that is due to start in the coming weeks, but the seemingly free flow of exports ahead of this smaller arabica crop, might suggest that the dip in production will after all, not be a significant as some had earlier suggested. 

The respected Brazilian analyst Safras & Mercado have reported that so far approximately 35% of the new conilon robusta coffee crop has already been harvested and along with 14% of the new arabica coffee crop having been harvested.   While reports indicate that at the start of the dry winter harvest season in Brazil, most of the main coffee districts in the country and with the exception of the south of Espirito Santo and Zona da Mata districts, have reported above average rains for the month of May.  These rains assisting to maintain fair ground water retention levels and to assist, to counter some of the stress upon the trees that comes with coffee harvest. 

The Indonesia government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of May were 202,686 bags or 262,251% higher than the same month in the previous year, at a total of 279,973 bags.   This contributes to the cumulative Sumatran robusta coffee exports for the first eight months of the present October 2016 to September 2017 coffee year to being 404,795 bags or 21.22% higher than the same period in the previous coffee year, at a total of 2,312,566 bags. 

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

With robusta coffee stocks from the last Vietnam crop declining post the smaller new crop that came in over October 2016 to January 2017, reports from the traders in the country are estimating that exports for the month of June shall be between 1.5 million and 2 million bags.  Meanwhile with the reference prices of the London market haven softened in recent weeks, there is evidence of rising internal market price resistance on the part of the farmers and internal traders, for the modest quantities of unsold stocks at hand.  

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 39.29 usc/Lb., while this equates to 30.21% 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 1,939 bags yesterday; to register these stocks at 1,476,717 bags.  There was meanwhile a larger in number 3,568 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,524 bags. 

The commodity markets were mixed in trade yesterday but mostly on the back foot, with the overall macro commodity index taking a softer track for the day.  The Oil, Cotton and Copper markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.58% lower, to see this Index registered at 404.20.  The day starts with the U.S. Dollar steady and trading at 1.287 to Sterling and at 1.122 to the Euro, while North Sea Oil is near to steady and is selling at $ 49.25 per barrel. 

The London market started the day yesterday on a softer note, while the New York market had a steady start for the day’s trade and with value to the positive side of par.   The London market soon recovered and with both markets holding close to par, into the early afternoon trade.  However, as the afternoon progressed and following a brief step up into positive territory for both markets, they came under pressure and to take an erratic sideways track close to par, before coming under further pressure and retreating into negative territory for late in the day trade. 

The London market ended the day on a negative note and with 84.6% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 86.8% of the earlier losses of the day intact.   This close does not inspire confidence but one might think that being at the low end of the recent trading range, that there might be some inspiration for caution and that the markets might be due for a steady start for early trade today, against the prices set yesterday, as follows: 

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

JUL     1981 – 14                                          JUL     127.70 – 1.65

SEP     2001 – 11                                          SEP    130.05 – 1.65

NOV    2001 – 6                                            DEC    133.55 – 1.70

JAN     1989 – 7                                            MAR   137.00 – 1.65

MAR    1975 – 8                                            MAY   139.20 – 1.65

MAY    1972 – 8                                            JUL    141.35 – 1.70

JUL     1985 – 8                                            SEP    143.40 – 1.65

SEP     2000 – 7                                            DEC   145.85 – 1.60

NOV    2007 – 7                                            MAR   148.25 – 1.60

JAN     2014 unch                                        MAY   149.30 – 1.60   


Coffee Market Report June 01 2017

The well-respected United States Department of Agriculture USDA report on the Mexican coffee industry has been issued, with firstly a rather dramatic 59.09% increase in their assessment of the recently completed new crop, which they now report to have been 3.5 million bags.     They further more forecast an 8.57% increase in production for the forthcoming new crop, which shall start coming to the market at the end of this year, which they foresee to be approximately 3.8 million bags.  This crop related to a 94.7 to 5.3 ratio of arabica to robusta coffees. 

Mexico is however a complex market and with a domestic consumption that the USDA assess to be approximately 3.89 million bags, but with this demand and supplemented by imports of approximately 1.55 million bags of mostly bean coffees but with soluble coffees and roast and ground coffees, accounting for approximately 17% of the imports.   This said, the USDA are forecasting that Mexico shall see an 18.2% increase in green coffee exports for the next October 2017 to September 2018 coffee year at a total of 1.95 million bags and accompanied by exports of Soluble coffees that shall be the equivalent of 924,000 bags and roast and ground coffee exports, which shall be the equivalent of 230,000 bags of coffee.  

The International Coffee Organisation have reported that the global coffee exports for the month of April were 5.3% lower than the same month last year, at a total of 9.54 million bags.   This dip in exports does however follow some aggressive export numbers in previous months and the report notes that the cumulative global coffee exports for the first seven months of the present October 2016 to September 2017 coffee year are still 3.1% higher than the same period in the previous coffee year, at a total of 69.51 million bags. 

These relatively high volumes of exports having contributed to the relatively high consumer market arabica coffee stock levels, which are proving to be negative for market sentiment within the New York market at present.  In this respect, the export volumes from Central America are expected to slow over the coming months, but to be supplemented by good volumes of arabica coffees anticipated to come from larger new Peru crop and from Colombia, now that the latter is starting to see the delayed Mitaca crop harvest starting to pick up in volume.  Thus, providing for little concern over the prospects for fine washed arabica coffee supply, for the foreseeable future. 

Somewhat reflecting the bearish sentiment that prevails within the arabica coffee market, is the report that the Citigroup Global markets report yesterday, has lowered its New York market price forecast by 3.95% to now foresee the average price of this year to be 146 usc/Lb.   The report noting that for the longer term they have also lowered their forecast for the coming year by 4.7%, as they now forecast an average price of 162 usc/Lb. for 2018. 

The Ivory Coast west Africa’s largest robusta coffee producer have reported that the countries coffee exports for the first four months of this year are 151,417 bags or 42.32% lower than the same period last year, at a total of 206,300 bags.   This being a relatively modest number, in terms of the forecasts for exports of well in excess of 1 million bags for this year. 

The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.44 usc/Lb., while this equates to 30.71% price discount for the London robusta coffee market.  This arbitrage may nevertheless become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,602 bags yesterday; to register these stocks at 1,474,778 bags.  There was meanwhile a larger in number 2,994 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,956 bags. 

The commodity markets were mixed in trade yesterday and against a marginally softer U.S. dollar, but with the overall macro commodity index nevertheless taking a softer track for the day.   The Cocoa, Copper, Grains and Gold markets had a day of buoyancy and the Silver market was near to steady, while the Oil, Sugar, Coffee and Orange Juice markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.30% lower, to see this Index registered at 406.55.  The day starts with the U.S. Dollar steady and trading at 1.285 to Sterling and at 1.123 to the Euro, while North Sea Oil is near to steady and is selling at $ 50.00 per barrel. 

The London and New York markets started the day yesterday with early buoyancy and with both markets taking a modest positive track into the early afternoon trade, but with the New York market starting soon starting to falter and to slip back to par.  As the afternoon progressed the New York market started to extend its losses and followed by the London market, which shed its gains and slipped back to join the New York market in negative territory.   Both market tended to stabilise in late trade and particularly so the London market, with the markets taking a sideways track through to the close.   The London market ended the day on a soft note but having recovered 52% of the earlier losses of the day, while the New York market ended the day on a very soft note and with 73% of the earlier losses of the day intact.    This softer close does little to inspire confidence and one might think that there shall be little better than a near to steady start for the London market and perhaps a more 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. 

JUL     1995 – 15                                          JUL     129.35 – 2.75

SEP     2012 – 12                                          SEP    131.70 – 2.70

NOV    2007 – 11                                          DEC    135.25 – 2.70

JAN     1996 – 12                                          MAR   138.65 – 2.70

MAR    1983 – 17                                          MAY   140.85 – 2.75

MAY    1980 – 19                                          JUL    143.05 – 2.75

JUL     1993 – 21                                          SEP    145.05 – 2.75

SEP     2007 – 21                                          DEC   147.45 – 2.75

NOV    2014 – 21                                          MAR   149.85 – 2.75

JAN     2014 – 21                                         MAY    150.90 – 2.75   


Coffee Market Report May 31 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 21.38% over the week of trade leading up to Tuesday 23rd. May; to register a new net short-sold position of 15,834 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.48%, to register a net long position of 33,928 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 21.4%, to register a net short sold position of 15,986 Lots.  This net short sold position which is the equivalent of 4,531,960 bags and following the period of mixed but overall more positive trade that has since followed, has most likely been marginally reduced and likewise, that of the Managed Money fund sector of the market. 

The Uganda Coffee Development Authority UCDA has reported that the countries coffee exports for the month of April were 561 bags or 0.17% lower than the same month last year, at a total of 326,232 bags.  This steady performance and following a much-improved performance in the previous months, has contributed to the countries cumulative coffee exports for the first seven months of the present October 2016 to September 2017 coffee year to being 583,665 bags or 29.24% higher than the same period in the previous coffee year, at a total of 2,579,472 bags.  

In terms of value the UCDA has reported that the coffee exports for the month of April were US$ 8,241,962.00 or 26.48% higher than the same month last year, at a total of US$ 39,362,589.00.  This having contributed to the cumulative value for the first seven months of the present October 2016 to September 2017 coffee year to be US$ 120,483,291.00 or 65.53% higher than the same period in the previous coffee year, at a total of US$ 313,148,422.00. 

These figures would start to indicate that the country is on its way to well exceed the volume of coffee exports of 3,315,567 bags that were registered for the previous October 2015 to September 2016 coffee year, during the present coffee year.    While the added value for the coffees being exported out of Uganda for the coffee year so far, does much to inspire further investment on the part of the Ugandan farmers into their coffee crops. 

There has been a report that the traditionally conservative Vietnam Coffee and Cocoa Association have referred to the many farms with relatively low yielding aged trees, to be reason to forecast that the forthcoming end of the year new coffee crop shall be a relatively modest 23.3 million bags.   This is however a figure that is not even close to the many private trade and industry forecasts and including the well-respected USDA report, which indicate a new crop that shall be approximately 10% higher than the last crop, at something close to 28.6 million bags. 

Thus, one might expect that this latest Vietnam Coffee and Cocoa Association report shall have little influence upon market sentiment, which is somewhat reflected by the inverted nature of the London market at present.   This market offering discounted prices for the delivery the year end delivery month and thereon, the first three delivery months of the coming year.    

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.93 usc/Lb., while this equates to 30.98% price discount for the London robusta coffee market.  This arbitrage may nevertheless become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,401 bags yesterday; to register these stocks at 1,472,176 bags.  There was meanwhile a smaller in number 771 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,962 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 7,167 bags or 0.25% in the week of trade leading up to Monday 29th. May, to register these stocks at 2,808,500 bags, on the day. 

The commodity markets returned from a long weekend yesterday but with the Chinese market still closed for the Dragon Boat holiday with many markets on a back foot for the day and with the overall macro commodity index, taking a softer track for the day.  The Cocoa, Coffee and Silver markets had a day of buoyancy, while the Oil, Sugar, Copper, Corn, Wheat and Gold markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.41% lower, to see this Index registered at 407.76.  The day starts with the U.S. Dollar steady and trading at 1.278 to Sterling and at 1.117 to the Euro, while North Sea Oil is near to steady and is selling at $ 50.90 per barrel. 

The London and New York markets started the day yesterday trading at close to par and maintaining a sideways track, into the early afternoon trade.   As the afternoon progressed the New York market started to show some buoyancy and followed by buoyancy for the London market, but with both markets coming off their highs of the day in late trade.   The London market ended the day on a positive note and with 55.9% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 58.1% of the earlier gains of the day intact.   This close tends to paint something of a positive technical picture for the markets, but one might expect some degree of caution and little better than a steady start for early trade today against the prices set yesterday, as follows: 

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

MAY    1989 + 28

JUL     2010 + 19                                          JUL     132.10 + 0.90

SEP     2024 + 22                                          SEP    134.40 + 0.85

NOV    2018 + 21                                          DEC    137.95 + 0.90

JAN     2008 + 21                                          MAR   141.35 + 0.90

MAR    2000 + 19                                          MAY   143.60 + 0.95

MAY    1999 + 19                                          JUL    145.80 + 1.00

JUL     2014 + 19                                          SEP    147.80 + 1.05

SEP     2028 + 19                                          DEC   150.20 + 1.00

NOV    2035 + 19                                         MAR    152.60 + 1.00    


Coffee Market Report May 30 2017

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Non-Commercial sector of this market decrease their net long position within this market by 9.12% during the week of trade leading up to Tuesday 23rd. May; to register a net long position of 18,894 Lots.  This net long position which is the equivalent of 3,149,000 bags has most likely been little changed, following the period of mixed but overall marginally positive trade that has since followed. 

With the month of May coming to a close and with the coffee export registrations for the month so far in hand, the Vietnam authorities are estimating that the countries coffee exports for the month of May shall be approximately 2 million bags.   This they say shall contribute to the countries cumulative coffee exports for the first five months of the year, to be 14% lower than the same period in the previous year, at approximately 11.8 million bags.   

Yesterday was a long weekend for the coffee markets as it was for most markets, with the U.S.A. markets closed for the Memorial Day long weekend, while the UK markets were closed for the Spring Bank Holiday.  As it was likewise a slow and lacklustre day for the global equity markets, with not only the USA and UK markets off the field of play, but also the Chinese market closed for the Tuen Ng Festival.   The latter is more commonly known globally, as the Dragon Boat Festival.    

Thus, for those who might have missed yesterday’s report, we can repeat below the arbitrage, New York certified stocks and the New York and London market figures below. 

The July to July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.73 usc/Lb., while this equates to 30.98% price discount for the London robusta coffee market.  This arbitrage may nevertheless become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,523 bags on Friday; to register these stocks at 1,469,775 bags.  There were 4,630 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,191 bags. 

The day starts with the U.S. Dollar steady and trading at 1.282 to Sterling and at 1.112 to the Euro, while North Sea Oil firm is near to steady and is selling at $ 51.11 per barrel. 

There has been no striking news coming to the fore for the coffee markets since their close on Friday, but one might think that following the positive close on Friday and with the London market having retained 85.07% of the earlier gains of the day and the New York market 65.52% of the earlier gains of the day, that there might be some degree of caution and a follow through steady start for the markets in early trade today.   Against the prices set on Friday, as follows: 

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

MAY    1961 + 57

JUL     1991 + 57                                          JUL     131.20 + 1.90

SEP     2002 + 52                                          SEP    133.55 + 1.90

NOV    1997 + 46                                          DEC    137.05 + 1.85

JAN     1987 + 41                                          MAR   140.45 + 1.85

MAR    1981 + 41                                          MAY   142.65 + 1.90

MAY    1940 + 40                                          JUL    144.80 + 1.90

JUL     1995 + 36                                          SEP    146.75 + 1.90

SEP     2009 + 36                                          DEC   149.20 + 1.95

NOV    2016 + 36                                         MAR    151.60 + 2.00    


Coffee Market Report May 29 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market increase their net short sold position within the market by 21.40% during the week of trade leading up to Tuesday 23rd May; to register a net short sold position of 15,986 Lots on the day. This net short-sold position which is the equivalent of 4,531,960 bags has most likely been little changed to perhaps marginally decreased, following the mixed but overall buoyant trade that has since followed.

The National Coffee Council of El Salvador have reported that the countries coffee exports for the month of April were 19,775 bags or 24.31% lower than the same month last year, at a total of 61,555 bags.  This performance has contributed to the countries cumulative exports for the first seven months of the present October 2016 to September 2017 coffee year to being 5.2% lower than the same period in the previous coffee year, at a total of 232,599 bags.

The July to July contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.73 usc/Lb., while this equates to 30.98% price discount for the London robusta coffee market.  This arbitrage may nevertheless become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,523 bags on Friday; to register these stocks at 1,469,775 bags.  There were 4,630 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,191 bags.

The commodity markets were mixed ahead of the G7 summit meetings on Friday, and a generally firmer day for the energy sector, while the US Dollar registered a better day against other major currencies and the G.B. Pound shed some recent gains. It was a softer day for Cotton, Copper, Sugar, Soybean, markets, a positive finish for Cocoa, Coffee, Corn, Wheat, Orange Juice, Gold, Silver, Platinum and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.41% lower, to see this Index registered at 409.45.  The day starts with the U.S. Dollar steady and trading at 1.282 to Sterling and at 1.116 to the Euro, North Sea Oil firm in early trade and is selling at $ 51.44 per barrel.
 
The day started immediately positive in both markets with London gapping higher as the session started the day, a similar start in New York met with a degree of selling activity in the early morning session, to send this market back to negative territory for a brief moment.  London continued on a positive track for much of the morning but with sellers reappearing at the top of the market to push this market lower into the afternoon.  The lows tested in both markets however, did not hold sway while external macro factors in the generally more positive mood of the commodity markets in general, provided a boost to these markets as the afternoon progressed.  London and New York continued to post gains as the day progressed toward the close, although New York succumbed to another bout of selling activity to see this market still in the black but steady out into a very narrow range over the last few hours in this market.  A strongly positive day in London saw this market hold on to much of the gains of the day almost to the close, when sellers returned to the floor to weigh in on this market and a softer turn but with much of the gains of the day still intact, ahead of the close in this market.

The coffee markets in London and New York are closed for business today as both markets celebrate respective holidays, the first trading day of the week for coffee and many other markets, will be tomorrow.  The close set on Friday was on a buoyant note after a good volume day in both markets and near to the highs of the day, as follows;

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

MAY    1961 + 57
JUL     1991 + 57                                          JUL     131.20 + 1.90
SEP     2002 + 52                                          SEP    133.55 + 1.90
NOV    1997 + 46                                          DEC    137.05 + 1.85
JAN     1987 + 41                                          MAR   140.45 + 1.85
MAR    1981 + 41                                          MAY   142.65 + 1.90
MAY    1940 + 40                                          JUL    144.80 + 1.90
JUL     1995 + 36                                          SEP    146.75 + 1.90
SEP     2009 + 36                                          DEC   149.20 + 1.95
NOV    2016 + 36                                         MAR    151.60 + 2.00    


Coffee Market Report May 25 2017

In the latest round of reports released of annual coffee crop reviews, the Unites States Department of Agriculture Foreign Agricultural Service have published their latest annual crop forecast report on the Ethiopia coffee crop for the coffee marketing year October 2017 to September 2018.  This next crop which is exclusively arabica coffee is forecast to remain steady at 6.54 million bags, of which exports are forecast to hold steady at 3.31 million bags and local coffee consumption, the highest of all coffee consumer countries in Africa, is set to remain stable at an estimated 3.24 million bags.
The Brazilian analyst Safras & Mercado who have estimated that the new Brazil crop is due to come in at 51.1 million bags and made up by 39.6 million bags of arabica coffee and 11.5 million bags of conilon robusta coffee; have reported that the harvest of both conilon robusta which is well underway, and arabica coffee areas harvest started; to have cumulatively reached 11% of total area completed at 16th May, compared with 10% a year earlier.
Within the report Safras & Mercado have made reference to the harvest advancing despite widespread rainfall that has been experienced in recent weeks. The latest short term weather forecasts indicate that the main Brazil arabica coffee districts are due for overcast but temperate weather over the coming weeks, with overnight temperatures comfortably in the double digits Celsius, thus far all indicators are for conducive weather for coffee ripening and harvest, to continue without interruption.
The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.14 usc/Lb., while this equates to 32.78% price discount for the London robusta coffee market.  This relatively low arbitrage, may start to become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,741 bags yesterday; to register these stocks at 1,458,091 bags.  There were similarly 2,085 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 57,911 bags.
It was a mixed day for commodity markets yesterday, the news of a credit downgrade assigned to China’s sovereign debt from A1 to Aa3 by an internationally renowned rating agency, rippled through the markets in early Asian trade to post a recovery during the early session.  As the day progressed the markets turned attention to the US Federal Reserve latest meetings for signs of prospective interest rate hikes to come, while the U.S. Dollar lost some ground on the day. It was a lower day in the Energy sector, Oil markets lower, as was the Sugar markets, Cocoa, Coffee, Copper, Soybean, Gold and Palladium lower on the day. Orange Juice held steady, Cotton, Corn, Silver and Platinum positive on the close. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.58% lower, to see this Index registered at 409.56.  The day starts with the U.S. Dollar steady and trading at 1.298 to Sterling and at 1.123 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 53.50 per barrel.
 
The London and New York markets started the day with a degree of buoyancy, initially taking a mildly positive track in light volume yesterday.  In almost a mirror reflection as activity picked up pace toward midsession, both markets slipped to below par and held a relatively tight range of trade for a couple of hours leading into the start of the business day in the Americas.  The New York market attracted some fresh underlying buyer support to the floor while London slipped into lower territory, with one sell feeding into another and in the absence of volume underlying buyer activity to prop up the floor in this latter market, on the day.  The upbeat midsession and buoyancy in New York gradually lost momentum into the afternoon with the additional weight of speculative chart based moves to trigger sells stops on the way.  The trading range in New York was relatively tight throughout at 2.70 usc/Lb., between high and low on the prompt month despite fair volume, with a late in the day slight recovery off of the day low.  The softer afternoon track for London robusta market met initially with underlying support to hold the afternoon session in a similar narrow range which slipped lower toward the end of the day and set a close in this market on the low of the day.  The markets finished the day on a softer note, with many market participant countries having a full or semi national holiday today, as today marks both Ascension Day and the start of Ramadhan, the markets set on the close yesterday, as follows:
LONDON ROBUSTA US$/MT                      NEW YORK ARABICA USc/Lb.
MAY    1877 – 31
JUL     1905 – 31                                          JUL     128.55 – 1.70
SEP     1924 – 31                                          SEP    130.95 – 1.70
NOV    1931 – 31                                          DEC    134.50 – 1.65
JAN     1929 – 31                                          MAR   137.95 – 1.60
MAR    1922 – 32                                          MAY   140.20 – 1.60
MAY    1922 – 29                                          JUL    142.40 – 1.55
JUL     1940 – 29                                           SEP   144.40 – 1.50
SEP     1948 – 29                                          DEC   146.65 – 1.40
NOV     1955 – 29                                          MAR  149.20 – 1.45