Coffee Market Report May 03 2018
The Trade Ministry in Brazil have yesterday corrected their figures for the countries coffee exports for the month of April of the previous day, to now report that the countries coffee exports for the month were in fact 20,136 bags or 1.04% higher than the same month last year, at a total of 1,949,025 bags. This is nevertheless still a relatively modest volume of coffee exports for the month and with the countries coffee exports expected to remain relatively modest for the coming couple of months and until the larger new crop starts to kick in, which should see monthly export volumes becoming more substantial from August onwards.
The Indonesian government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of April were 124,747 bags or 65.11% lower than the same month last year, at a total of 66,850 bags. This number and following a similarly modest export performance for the previous months has contributed to the cumulative coffee exports for the first seven months of the present October 2017 to September 2018 coffee year to be 1,735,206 bags or 68.18% lower than the same period in the previous coffee year, at a total of 809,903 bags.
There is however a new Sumatra robusta coffee crop harvest now starting to only really start coming to the fore in volume by the end of the month and a crop that shall assist to buoy export volumes for the rest of the year, but with presently many conflicting forecasts in terms of the potential size of the new Sumatra robusta coffee crop, which shall firstly need to satisfy the vibrant domestic roasting industry demand, prior to coming the consumer markets in any significant volumes. With Indonesian robusta coffees therefore, unlikely to become price competitive within the consumer markets until well into the third quarter of this year.
The National Coffee Institute in Costa Rica has reported that the countries coffee exports for the month of April were approximately 29,500 bags or 20.3% higher than the same month last year, to see these exports registered at 175,212 bags. These exports they say, have contributed to the countries cumulative exports for the first seven months of the present October 2017 to September 2018 coffee year to be approximately 45,500 bags or close to 8% higher than the same period in the previous coffee year, at a total of 631,935 bags.
The July 2018 to July 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.79 usc/Lb., while this equates to 33.77% 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 3,705 bags yesterday; to register these stocks at 1,995,817 bags. There were meanwhile a similar in number 3,742 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,614 bags.
The commodity markets had a mixed day yesterday, with the overall macro commodity index taking something of a sideways track for the day. The U.S. Oil, Sugar, Cotton, Copper, Orange Juice, Wheat and Silver markets ended the day on a positive track, while the Brent Oil, Natural Gas, Cocoa, Coffee, Corn, Soybean and Gold markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.03% lower; to see this index registered at 434.14. The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.359 to Sterling, at 1.199 to the Euro and with the dollar buying 3.551 Brazilian Real, while North Sea Oil is steady and is selling at US$ 73.75 per barrel.
The London market started the day yesterday in negative territory, while the New York market started the day trading with modest buoyancy and with the markets retaining this stance, into the early afternoon trade. As the afternoon progressed the London market reduced its losses and the New York market moved up into positive territory and retained some muscle for a couple of hours of trade, before starting to come under pressure and slipping back to enter negative territory. This with nothing in the way of fundamentally supportive news in play, set the markets on track for a softer end to the day, albeit that the London market had managed to bounce back significantly from its earlier in the day’s lows.
The London market ended the day on a negative note but having recovered 55.6% of its earlier losses of the day by the close, while the New York market ended the day on a negative note and with 87.5% of the earlier losses of the day intact. This close and with the New York market having faltered later in the day does little to inspire, with the relatively firm U.S. dollar and relative to a soft Brazil Real tending to add to concerns for the potential for increased producer price fixation selling volumes, which is likely to set the markets for only a near to steady start for early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 1807 + 28 MAY 121.60 – 1.00
JUL 1807 – 8 JUL 123.75 – 1.05
SEP 1789 – 8 SEP 126.05 – 0.95
NOV 1788 – 7 DEC 129.50 – 0.95
JAN 1789 – 6 MAR 132.95 – 0.95
MAR 1796 – 7 MAY 135.25 – 0.90
MAY 1798 – 10 JUL 137.30 – 1.00
JUL 1810 – 11 SEP 139.15 – 1.05
SEP 1822 – 11 DEC 141.80 – 1.10
NOV 1837 – 11 MAR 144.45 – 1.10