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