Coffee Market Report July 13 2017

The State authorities in Vietnam have reported that the country’s exports for the month of June were marginally higher than their earlier estimate, at a total of 2,033,333 bags.  This figure would indicate that Vietnam has exported predominantly robusta coffees, to total approximately 13.86 million bags in the first six months of this calendar year.  Thus, with the smaller coffee crop harvested over October 2016 to January 2017, the tighter internal market stocks are steadily declining to relatively low levels and with export stocks already related to forward contract commitments, indications are for export volumes for the next few months heading toward the next October 2017 to January 2018 harvest to come, that coffee export volumes from Vietnam are due to remain within the region of between 1.5 million to 1.8 million bags per month.

The weather in Brazil is seasonally cool but having since passed the speculatively emotive but generally now considered to be a non-event, full moon frost risk on 9th July, the new crop harvest continues uninterrupted. Thus, the conilon robusta areas that start harvest earlier in the year likely to be close to harvest completion and the new arabica coffee crop to have reached an estimate of over 40% harvested in conducive weather.

The first World Coffee Producers Forum is being hosted in Medellin, Colombia this week, taking place from 10th July to 12th July.  The Forum has reported 1200 delegates to be in attendance representing all facets of the coffee chain from tree to cup and representation from forty countries, including several international dignitaries and heads of State, together with an opening panel discussion held with former president of U.S.A., Bill Clinton and current president of Colombia, Juan Manuel Santos. The forum that is being held over these three days, is anticipated to address a wide range of topics specific to the future prospects of coffee and coffee growing, from the perspective of coffee growers worldwide as well as the inclusive issues and challenges that the coffee industry in entirety must participate in for the future economic sustainability of coffee worldwide.
 
The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 32.91 usc/Lb., while this equates to 25.93% 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 5,043 bags yesterday; to register these stocks at 1,540,499 bags.  There were 8,169 bags drawn down from the number of bags pending grading for this exchange; to register these pending grading stocks at 26,879 bags.

The commodity markets were mixed but many encountered a stronger day as the U.S. Dollar lost ground against a basket of other major currencies as the day progressed, ahead of the U.S. Federal Reserve Bank Chair statement to be delivered later this week.  It was a firm day in the Oil markets, Copper, Orange Juice, Soybean, and Wheat markets, similarly a positive day for  Gold, Silver, Platinum and Palladium.  It was a lower day for Softs however, with Cocoa, Coffee and Sugar all down on the day. The Reuters Equal Weight Continuous Commodity Index registered an improved 0.1886% result on the day and registered at 401.58.  The day starts with the U.S. Dollar steady and trading at 1.2851 to Sterling and at 1.148 to the Euro, while North Sea Oil is steady and is selling at US$ 47.85 per barrel.

The coffee markets started the day yesterday on a mixed note and with New York market showing some early buoyancy, while London market had a softer start for the day.   The London market posted a recovery back to positive territory by midsession however, while the New York arabica market reversed earlier gains to settle within negative territory by midsession and chart steadily lower into the afternoon.  The London market which had spent much of the afternoon in positive territory, succumbed to negative sentiment prevalent in New York, sellers returning to the floor late in the session and push this market into lower territory at the end of the day, to the close. As the day moved into afternoon the softer trend brought limited buyer participation back to the fore, to lift New York and set the price in this market, after a modest to fair volume day in this market, in negative territory but off of the days’ lows, to set the close in both markets yesterday, as follows:

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

JUL    2107 – 28                                      JUL   124.45 – 1.80  
SEP    2072 – 28                                      SEP   126.90 – 1.70
NOV   2057 – 29                                      DEC   130.45 – 1.70
JAN    2039 – 28                                      MAR   133.85 – 1.70
MAR   2025 – 30                                      MAY   136.15 – 1.70
MAY   2029 – 32                                      JUL    138.40 – 1.65
JUL    2046 – 46                                      SEP    140.45 – 1.65
SEP    2056 – 35                                     DEC    143.35 – 1.70
NOV   2063 – 35                                      MAR    146.10 – 1.70
JAN    2070 – 35                                      MAY    147.70 – 1.70