Coffee Market Report December 05 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

                                                                        DEC    101.90 – 1.60

JAN    1556 – 10                                             MAR   106.90 – 0.90

MAR   1581 – 9                                               MAY   109.80 – 0.90

MAY   1595 – 10                                              JUL    112.45 – 0.90

JUL    1611 – 8                                                SEP    115.10 – 0.90

SEP    1625 – 8                                                DEC   118.80 – 0.90

NOV   1640 – 6                                                MAR   122.40 – 0.85

JAN    1654 – 4                                                MAY   124.85 – 0.80

MAR   1666 – 3                                                JUL    127.20 – 0.80

MAY   1684 – 3                                                SEP    129.35 – 0.80

JUL    1696 – 3                                                DEC    132.25 – 0.80