Market Reports

Coffee Market Report November 09 2017

The Customs Authorities in Vietnam have reported that the countries coffee exports for the month of October were marginally below even their relatively conservative forecast, at a total of 1.317 million bags.   This is however with the combination of most of the past crop stocks having been liquidated and the delay in the new crop harvest that has caused short sold exporters to carry additional stocks, is not a surprise.  

However, with Typhoon Damrey reported to have not been damaging for the coffee farms and with drier weather now coming into play, the new crop harvest in the main Central Highlands robusta coffee districts of Vietnam is starting.   Thus, one might expect to see exports starting to pick up in volume by late this month and most certainly, so long as there are no further weather issues to the fore, to start to significantly increase in volume during December. 

Meanwhile the report on Tuesday from the International Coffee Organisation ICO that had increased their assessment of the global coffee production for the just completed October 2016 to September 2017 coffee year to 157.44 million bags and its indication for surplus rather than deficit supply, continued to overshadow sentiment yesterday.  This negative news coming to the fore, in addition to the widely accepted prospects for large new crops from Colombia, Central America and Vietnam due to impact by the end of the year. 

However, with the speculative and managed money fund sectors of the market still holding extensive short sold positions within the New York market, it is difficult to imagine too much more downside potential for this market.  Albeit that these sectors of the market can be unpredictable and so long as the Brazil weather reports remain favourable for the next 2018 crop, it remains difficult to predict what direction the volatile New York market might take in the coming weeks. 

The March 2018 to March 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 48.01 usc/Lb., while this equates to 37.15% 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 5,148 bags yesterday; to register these stocks at 1,910,404 bags.  There was meanwhile a larger in number 8,878 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,442 bags. 

The producer bloc of Mexico and Central America presently contribute 60.88% of these stocks and followed by Peru, who contribute 12.17% of these stocks, with Colombia close behind with an 11.81% contribution to the stocks.   This dominance by the traditional Central and South American producers in terms of the stocks, is joined by a 3.57% contribution on the part Brazil, to see the Latin American countries making up 88.43% of the New York certified stocks.    Followed by the African countries, Burundi, Rwanda, Tanzania and Uganda who jointly contribute 9.33% of the stocks, India with a 1.83% contribution and Papua New Guinea, with a 0.41% contribution. 

The European ware houses of this exchange presently carry 73.85% of the stocks held against this exchange, but with a more modest 50.52% of the coffees pending grading for the exchange.   

The commodity markets were mixed in trade yesterday, to see the overall macro commodity index taking something of a steady sideways track for the day.  The Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, London robusta Coffee and Wheat markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.36% higher, to see this Index registered at 423.67.  The day starts with the U.S. Dollar near to steady and trading at 1.312 to Sterling and at 1.160 to the Euro, while North Sea Oil is steady and is selling at US$ 63.90 per barrel. 

The London market started the day yesterday on a steady note, while the New York market started the day with a degree of buoyancy, to see the London market trading around par and the New York market taking a positive stance, into the early afternoon trade.   As the afternoon progressed the London market started to come under pressure and slipped back into negative territory while the New York market settled back to par, but while the London market continued to end the day on a soft note, the New York market recovered back into positive territory. 

The London market ended the day on a negative note and with 56% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 83.3% of the earlier gains of the day intact.  This mixed close provides little in the way of direction and one might expect to see another cautious steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1858 – 13                                             DEC   125.75 + 1.05

JAN    1810 – 14                                            MAR   129.20 + 1.00

MAR   1790 – 14                                            MAY   131.50 + 1.00

MAY   1795 – 18                                            JUL    133.80 + 1.00 

JUL    1819 – 19                                            SEP    136.10 + 1.05

SEP    1822 – 21                                            DEC   139.45 + 1.05

NOV   1824 – 21                                            MAR   142.60 + 1.00

JAN    1828 – 21                                            MAY   144.60 + 1.05

MAR   1827 – 21                                            JUL    146.40 + 0.85

MAY   1832 – 21                                            SEP    148.25 + 0.80


Coffee Market Report November 08 2017

The International Coffee Organisation ICO have reported that they have increased their assessment of the global coffee production for the just completed October 2016 to September 2017 coffee year by 3.54 million bags or 2.3%, to now assess coffee production for the coffee year at 157.4 million bags.  This increase they appropriate mostly to their increasing Mexican and Central American production by 2.3 million bags, while they have now pegged production for the 2016/2017 coffee year to have been made up from 101.55million bags of arabica coffees and 55.89 million bags of robusta coffees.   Or a 64.5 to 35.5 ratio, for arabica and robusta coffees. 

The interesting fact in terms of this latest ICO report and with their having assessed global coffee consumption to presently be approximately 155.1 million bags, is that they now see this just completed coffee year to have been a modest surplus supply coffee year.   Their figures indicating the surplus as having been approximately 2.34 million bags, which shall assist to counter the relatively modest tightening of coffee supply that would have come with the smaller Brazil crop this year.  

The European Coffee Federation ECF have reported that the port warehouse stocks held within warehouses in the ports of Antwerp, Hamburg, Genoa, Le Havre and Trieste fell by 384,583 bags or 3.3% during the month of September, to register these stocks at the end of the month at 11,269,567 bags.   These stocks do not however include the unreported stocks from the warehouses in the port of Bremen, who no longer contribute to the end month stock figures.   Nor does this report consider the industry on site inventory stocks, the transit bulk container stocks and stocks being held within non-reporting private warehouses throughout Western and Eastern Europe. 

This said and with the combination of West and East Europe consuming approximately 1.05 million bags of coffee a week, one might guess that the additional stocks that were not included in the report, might contribute to as much as 2.5 million bags to the reported stocks.   Thus, indicating that as at the end of July, the European coffee stocks might have been close to the equivalent of close to a very safe, 13 weeks of Western and Eastern European roasting demand. 

However, with slow start to Brazil exports of new crop coffees this year and declining volumes of Vietnam exports over the past couple of months, it is possible that that these overall reported and unreported stocks might well by now, be as much as half a million bags lower.   But nevertheless, still at a relatively safe level, ahead of the delivery of the new Colombian, Central American and Vietnam crops.    

The March 2018 to March 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 46.37 usc/Lb., while this equates to 36.17% 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 19,703 bags yesterday; to register these stocks at 1,905,256 bags.  There was meanwhile a smaller in number 3,902 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 41,320 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 10,167 bags or 0.47% over the week of trade leading up to Monday 6th. November, to see these stocks registered at 2,142,167 bags, on the day. 

The commodity markets and with the U.S. dollar showing a degree of renewed muscle for the day were mixed in trade but with many markets tending softer, to see the overall macro commodity index taking a softer track for the day.   The Natural Gas, Sugar, Cocoa and Soybean markets had a day of buoyancy, while the Oil, Coffee, Cotton, Copper, Orange Juice, Wheat, 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 0.42% lower, to see this Index registered at 422.18.  The day starts with the U.S. Dollar tending softer and trading at 1.317 to Sterling and at 1.160 to the Euro, while North Sea Oil is steady and is selling at US$ 64.10 per barrel. 

The London and New York markets started the day yesterday on a near to steady note and trading modestly south of par, but with the London market soon slipping lower, to see the markets taking this mixed stance into the early afternoon trade.   As the afternoon progressed the London market started to lose some more weight and with the New York market following suit and with sell stops coming into play to accentuate the losses for both markets, prior to a bounce back from the lows in the London market on the back of some industry buying activity and followed by seemingly a combination of some industry buying and speculative profit taking recovery within the New York market.   

The London market ended the day on a negative note and with 56.4% of the earlier losses of the day intact, while the New York market ended the day on a negative note, but having recovered 65.3% of the earlier losses of the day by the close.   The ability of both markets to bounce back from the lows might assist to bring to the fore a degree of caution and one might expect to see a hesitant steady start due for early trade today, against the prices set yesterday, as follows: 

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

NOV   1871 – 32                                             DEC   124.70 – 0.85

JAN    1824 – 31                                            MAR   128.20 – 0.85

MAR   1804 – 28                                            MAY   130.50 – 0.85

MAY   1813 – 25                                            JUL    132.80 – 0.85 

JUL    1838 – 23                                            SEP    135.05 – 0.90

SEP    1843 – 24                                            DEC   138.40 – 0.85

NOV   1845 – 25                                            MAR   141.60 – 0.85

JAN    1849 – 22                                            MAY   143.55 – 0.85

MAR   1848 – 22                                            JUL    145.55 – 0.80

MAY   1853 – 22                                            SEP    147.45 – 0.80


Coffee Market Report November 07 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 decrease their net short sold position within the market by 0.91% over the week of trade leading up to Tuesday 31st. October; to register a new net short sold position of 45,570 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.69%, to register a net long position of 33,724 Lots on the day. 

Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 1.06%, to register a net short sold position of 46,469 Lots.  This net short sold position which is the equivalent of 13,173,756 bags has most likely been little changed top perhaps modestly decreased again, following a period of mixed but overall steady trade that has since followed and likewise, that of the Managed Money fund sector of the market. 

The reports of damage to infrastructure and agriculture because of Typhoon Damrey in central Vietnam have had no impact upon sentiment within the London robusta coffee market, as there have been many reports from within the country and from the main central highlands coffee districts of the country, that have indicated minimal damage for the coffee farms.   Rather the reports have indicated a sunny weather and its assistance for farmers, to start with their new crop harvest and the prospects for good volumes of new crop robusta coffees to start flowing into the mills and warehouses in Ho Chi Minh City by the end of the month.  

In the meantime, and with the new main Colombian crop presently being harvested and along with the new crops from the lower grown districts in Central America and ahead of the pending surge in new crop coffees due from this region early in the new year, there is presently little in the way of supportive fundamental news for the speculatively oversold New York arabica coffee market.   But it is perhaps the fact that the speculative and fund sectors of the New York market are holding such extensive net short positions within the market, that can contribute to a degree of short term buoyancy, albeit that there is the potential for increasing volumes of price fixation hedge selling due form the Central American producers in the coming months. 

This one would think, shall leave the short to medium terms fortunes for the prevailing soft and lacklustre in trade New York market, very much in the hands of the Brazilian weather reports and their influence upon the prospects for the next 2018 new Brazil crop.  Noting that so far, the prospects for this next Brazil crop still look fair to good and do little to support sentiment within the New York market. 

The March 2018 to March 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 45.95 usc/Lb., while this equates to 35.61% 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 1,391 bags yesterday; to register these stocks at 1,924,959 bags.  There was meanwhile a larger in number 7,330 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,418 bags. 

The commodity markets were mostly buoyant for during trade yesterday, to see the overall macro commodity index taking a positive track for the day.   The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the London robusta Coffee ended off on a steady note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.39% higher, to see this Index registered at 423.96.  The day starts with the U.S. Dollar steady and trading at 1.317 to Sterling and at 1.161 to the Euro, while North Sea Oil is showing a degree of early buoyancy and is selling at US$ 64.80 per barrel. 

The London market started the day yesterday on a steady note and trading modestly north of par, while the New York market started the day on a softer note and with the markets maintaining this mixed stance into the early afternoon trade.   As the afternoon progressed the London market drifted back to trade around par and joined by a recovery on the part of the New York market, to likewise trade on a mostly sideways track and either side of par.   The London market continued towards a relatively unexciting close and close to par, while the New York market and perhaps with some assistance from the positive sentiment that came with the positive nature of the overall macro commodity index, registered a fair recovery and a positive end to trade for the day. 

The London market ended the day on a steady note and just about on par for the day, while the New York market ended the day on a positive note and with 67.4% of the earlier gains of the day intact.   This close provides little in the way of direction, but there might in terms of the ability of the New York market to end the day with some buoyancy be some degree of cautious support forthcoming, to inspire a steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1903 – 1                                               DEC   125.55 + 1.60

JAN    1855 – 1                                              MAR   129.05 + 1.55

MAR   1832 – 2                                              MAY   131.35 + 1.55

MAY   1838 – 4                                              JUL    133.65 + 1.55 

JUL    1861 – 4                                              SEP    135.95 + 1.60

SEP    1867 – 4                                              DEC   139.25 + 1.55

NOV   1870 – 4                                              MAR   142.45 + 1.50

JAN    1871 – 4                                              MAY   144.40 + 1.45

MAR   1870 – 4                                              JUL    146.35 + 1.45

MAY   1875 – 4                                              SEP    148.25 + 1.45


Coffee Market Report November 06 2017

The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-Commercial Speculative sector of this market decrease their net short sold position within the market by 1.06% during the week of trade leading up to Tuesday 31st. October; to register a net short sold position of 46,469 Lots on the day. This net short-sold position which is the equivalent of 13,173,756 bags has most likely been little changed to perhaps marginally increased again, following the period of mixed but overall more negative trade, which 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 short sold position within this market by 23.15% during the week of trade leading up to Tuesday 31st. October; to register a net short sold position of 6,735 Lots.  This net short sold position which is the equivalent of 1,122,500 bags has most likely been little changed following the period of mixed but mostly sideways trade, which has since followed. 

The Colombian Coffee Federation have reported that the country’s coffee production for the month of October was 322,000 bags or 23.08% lower than the same month last year, at a total of 1,073,000 bags.    In terms of coffee exports from Colombia the Coffee Federation have reported that the country’s coffee exports for the month were 94,000 bags or 7.53% lower than the same month last year, at a total of 1,155,000 bags.  

This has been a relatively slow start for the new coffee year for Colombia, but so far there have been no indications that it is due to any problems with the new main crop harvest that is presently in progress, as there might well be some stability in terms of production keeping in line with forecasts, over the coming two to three months.  But perhaps the lower numbers for the month of October, might assist to slow the bearish pressure that has recently prevailed for the already well sold short New York market.  

There have been many reports over the impact of Typhoon Damrey which hit central Vietnam early in the weekend, but with most of the mortality and damage reports being related to the coastal areas, rather than the coffee growing districts within the central highlands.  There have though been reports of ripe cherry drop on many farms and some modest damage to coffee trees, but with many reports noting that the cherries dropped shall still be harvested and dried and with sunshine now returning to the central highlands, that the new crop harvest shall likely start to pick up in volume during the week.  

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 39.76 usc/Lb., while this equates to 32.08% 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 10,860 bags on Friday; to register these stocks at 1,926,350 bags.  There was meanwhile a larger in number 13,217 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,088 bags. 

The commodity markets were mixed in trade on Friday but with the buoyancy within the influential energy markets that were reacting towards the corruption reports and leadership changes within Saudi Arabia, assisting to buoy the overall macro commodity index for the day.   The Oil, Natural Gas, Sugar and Orange Juice markets had a day of buoyancy and the Cocoa and Wheat markets were steady for the day, while the Coffee, Cotton, Copper, 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 0.05% higher, to see this Index registered at 418.16.  The day starts with the U.S. Dollar steady and trading at 1.307 to Sterling and at 1.161 to the Euro, while North Sea Oil is showing a degree of early buoyancy and is selling at US$ 62.45 per barrel. 

The London market started the day on Friday trading close to but mostly to the positive side of par, while the New York market started the day showing buoyancy and posting some early gains, but to see the New York market soon come off the boil and to see the London market slip south of par and the New York market struggling to remain on par for the early afternoon trade.   As the afternoon progressed the New York market started to come under pressure and to attract sell stops to accentuate the losses, with the London market following suit before bouncing off the lows.  To see both markets taking a soft track towards a soft close, for late in the day trade. 

The London market ended the day on a negative note and with 50% of the earlier losses 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 think that there might nevertheless be some degree of caution in terms of the uncertainty of the delays in the start of the new Vietnam harvest and some concerns over the potential for a degree of exhaustion on the part of the short-sold speculators and funds within the New York market, which might result in a hesitantly steady start for early trade today, against the prices set on Friday, as follows: 

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

NOV   1904 – 12                                             DEC   123.95 – 2.45

JAN    1856 – 14                                            MAR   127.50 – 2.35

MAR   1834 – 16                                            MAY   129.80 – 2.35

MAY   1842 – 17                                            JUL    132.10 – 2.35 

JUL    1865 – 18                                            SEP    134.35 – 2.35

SEP    1871 – 19                                            DEC   137.70 – 2.30

NOV   1874 – 25                                            MAR   140.95 – 2.30

JAN    1875 – 27                                            MAY   142.95 – 2.35

MAR   1874 – 27                                            JUL    144.90 – 2.30

MAY   1879 – 27                                            SEP    146.80 – 2.30


Coffee Market Report November 03 2017

The latest reports from Brazil indicate that most of the main coffee districts in the country experienced near normal rains for the month of October, with only the Zona da Mata, Bahia and Espirito Santo districts having below average rains for the month.   There are however rains now falling over Espirito Santo and Bahia, while more rains are forecast to move up from the southern coffee districts during the weekend and to impact over most of South East Brazil next week.  

In terms of commercial activity within Brazil and following yesterday’s Dia de Finados or All Souls Day public holiday, most of the commercial houses shall remain closed for business today and for a long weekend for the majority within the country.    Therefore, once again, there shall be little in the way of price fixation selling activity due from Brazil within the New York market today, which might assist to buoy the market ahead of the weekend.  

Meanwhile there are rains forecast for the main central highlands in Vietnam for the next few days, which shall continue to delay the start of the new crop harvest in any volume.   However so far the delayed start to end of the rain season is not seen to be damaging to the prospects of what is foreseen to be a larger new robusta coffee crop, but only a delay factor to this crop having an impact upon consumer market supply. 

The physical coffee trade remains lacklustre for the present, but perhaps with the markets having bounced back from the lows yesterday, there might be some industry players who shall think that the downside is limited and it is time to start to step in to buy.    Making one think that there might be more activity within this sector of the market within the coming weeks, as the industries take in some additional new crop Colombia, Central American and Vietnam cover.  

The consumer industries are however likely in terms of the good to perhaps still excessive consumer arabica coffee stocks, still likely to remain relatively complacent and while possibly due to become more active buyers, not really expected to bring much excitement to the terminal markets.   Leaving direction very much in the hands of the speculative and fund sectors of the volatile New York market, which is presently trading at what would be seen to be loss making price levels for many producer countries. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 41.58 usc/Lb., while this equates to 32.9% 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 4,613 bags yesterday; to register these stocks at 1,915,490 bags.  There was meanwhile a larger in number 5,820 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,305 bags. 

The commodity markets were mixed in trade yesterday, but to see the overall macro commodity index showing a degree of buoyancy for the day.   The Oil, Natural Gas, Coffee, Cotton, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy and the Gold market was steady for the day, while the Sugar, Cocoa, Copper and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.13% higher, to see this Index registered at 417.93.  The day starts with the U.S. Dollar steady and trading at 1.307 to Sterling and at 1.166 to the Euro, while North Sea Oil is near to steady and is selling at US$ 61.15 per barrel. 

The London market started the day yesterday on a modestly firmer note, while the New York market started the day close to par and with the both markets maintaining this stance, into the early afternoon trade.  As the afternoon progressed the London market started to attract more support and with the New York market likewise moving back into positive territory and with the New York market soon triggering stop loss buy orders and accentuating its gains and to see both markets moving higher.  The markets did however soon reach a ceiling and settling back to what was nevertheless, a positive close for the day.   

The London market ended the day on a positive note and with 82.1% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 74.2% of the earlier gains of the day intact.   This close might well inspire a degree of confidence and with the combination of the delayed start to the new Vietnam robusta coffee crop, the potential lack of Brazil selling activity and the very active positive correction for the New York market yesterday, there is the potential for a positive to buoyant start for early trade today against the prices set yesterday, as follows: 

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

NOV   1916 + 29                                             DEC   126.40 + 3.45

JAN    1870 + 32                                            MAR   129.85 + 3.40

MAR   1850 + 36                                            MAY   132.15 + 3.30

MAY   1859 + 38                                            JUL    134.45 + 3.30 

JUL    1883 + 36                                            SEP    136.70 + 3.25

SEP    1890 + 35                                            DEC   140.00 + 3.15

NOV   1899 + 35                                            MAR   143.25 + 3.10

JAN    1902 + 29                                            MAY   145.30 + 3.15

MAR   1901 + 29                                            JUL    147.20 + 3.10

MAY   1906 + 29                                            SEP    149.10 + 3.10


Coffee Market Report November 02 2017

The Trade Ministry in Brazil have reported that the country’s coffee exports for the month of October were 330,529 bags or 11.11% lower than the same month last year, at a total of 2,644,261 bags.   This dip in exports perhaps not so much a reflection upon the more modest nature of this year’s new arabica coffee crop, but more related to the relatively lacklustre nature of coffee trade within the country, because of the prevailing soft nature of the reference prices of the New York market. 

The Coffee Institute in Honduras have reported that the country’s coffee exports for the month of October were 2,831 bags or 4.34% lower than the same month last year, at a total of 62,328 bags. 

The Coffee Institute in Costa Rica have reported that the country’s coffee exports for the month of October were 18,242 bags or 56.02% lower than the same month last year, at a total of 14.321 bags. 

The dip in exports for both Honduras and Costa Rica are really no reflection on the prospects for the new crop, a presently the weather conditions over Central America are good for the development of the new crop and forecasts remain for an overall larger new crop for this important fine washed arabica producer bloc.   However, with the prevailing soft nature of the New York market, one might expect to see some degree of internal market price resistance coming into play, to slow the export volumes out of the region. 

The Karnataka Planters Association that represents a region that accounts for approximately 72% of India’s coffee production have disputed the Coffee Board of India new crop forecast for coffee supply for this new October 2017 to September 2018 coffee year to be 12.31% higher than the previous coffee year, at approximately 5.84 million bags.  Stating that in their view and they foresee that the new crop shall rather be little more than 5.2 million bags, due to the negative effects of pests and disease upon the coffee farms.  But many might see this report on the part of the Karnataka Planters Association to be somewhat market manipulative in nature, rather than an indicator of problems for the Indian coffee farming industry, as the report has had no positive influence upon international coffee market sentiment. 

The Ethiopian Coffee and Tea Development and Market Authority in Ethiopia have reported that the country’s coffee exports for the first three months of the country’s financial year that started on the 9th. July this year, were 12,083 bags or 1.28% lower than they had forecast, at a total of 930,417 bags.   This proving to be a slow start towards the 4.5 million bags of coffee exports, that the forecast for the 2017 to 2018 financial year. 

Today is the Dia de Finados or All Souls Day public holiday in Brazil, with many commercial houses due to take advantage of this holiday, to take a bridge day on Friday and to extend it into a long weekend.    Thus, the Brazilian exporters are due to have little impact upon the fortunes of the New York coffee exchange for the rest of the week, which might assist to settle the market and perhaps even influence some degree of stability and modest recovery for the market. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 39.58 usc/Lb., while this equates to 32.19% 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 863 bags yesterday; to register these stocks at 1,910,877 bags.  There was meanwhile a larger in number 2,700 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 49,125 bags. 

The commodity markets were mixed in trade yesterday, to see the overall macro commodity index showing a degree of buoyancy for the day.   The Cocoa, Copper, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, Coffee, Cotton 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 0.5% higher, to see this Index registered at 417.39.  The day starts with the U.S. Dollar tending softer and trading at 1.328 to Sterling and at 1.165 to the Euro, while North Sea Oil is steady and is selling at US$ 60.70 per barrel. 

The London market started the day yesterday on a modestly softer note, while the New York market started the day close to par and with the both markets maintaining this stance, into the early afternoon trade.  As the afternoon progressed the London market remained south of par and the New York market briefly recovered and moved back into positive territory, to soon come under pressure and to slip back into negative territory and with stop loss selling accentuating the losses and with the London market likewise slipping into lower territory.   Both markets did however bounce back from the lows and particularly so the New York market, but to nevertheless see the markets end the day on a soft note. 

The London market ended the day on a very negative note and with 83.3% of the earlier losses of the day intact, while the New York market ended the day on a negative note and with 55.1% of the earlier losses of the day intact.   This close does little to inspire confidence, but one might think that the combination of the partial recovery for the New York market from what were significant losses yesterday and the lack of Brazil price fixation selling pressure, shall assist to buoy the fortunes of the New York market and perhaps too the London market in sympathy for early trade today, against the prices set yesterday, as follows: 

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

NOV   1887 – 15                                             DEC   122.95 – 2.15

JAN    1838 – 40                                            MAR   126.45 – 2.15

MAR   1814 – 46                                            MAY   128.85 – 2.10

MAY   1821 – 46                                            JUL    131.15 – 2.20 

JUL    1847 – 45                                            SEP    133.45 – 2.15

SEP    1855 – 44                                            DEC   136.85 – 2.15

NOV   1864 – 44                                            MAR   140.15 – 2.10

JAN    1873 – 44                                            MAY   142.15 – 2.10

MAR   1872 – 44                                            JUL    144.10 – 2.10

MAY   1877 – 44                                            SEP    146.00 – 2.10


Coffee Market Report November 01 2017

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 October were 445,589 bags or 71% lower than the same month last year, at a total of 182,023 bags. 

This relatively modest performance which follows a 28.38% lower performance during the previous month of September, reflects the drying up of offers from within the internal market post the end of this year’s harvest, which one would appropriate to not only diminishing stocks, but also to internal market price resistance towards exporters, whose price offers are dictated by the reference prices of the softer London market.  Considering that the Indonesian exporters in terms of price, must compete with a growing domestic market and with new crop stocks only due from April 2018 onwards, many would be looking to the domestic market roasters to add value to unsold 2017 crop stocks. 

The drying up of Indonesian robusta coffee supply is however not foreseen to be an issue on the part of the consumer market industries, as with the prospects for a new and larger Vietnam robusta coffee crop foreseen to start coming into play over the next three to four weeks, focus is now upon a good and steady supply of Vietnam robusta coffees for the rest of the year and the first half of next year. 

The International Coffee Organisation ICO have reported that the global coffee exports for the month of September were 14.8% lower than the same month last year, at a total of 8.34 million bags.   This dip in exports they however comment, does not detract from the fact that global coffee exports for the October 2016 to September 2017 coffee year were 4.8% higher than the previous coffee year, at a total of 122.45 million bags. 

The high volume of global coffee exports over the just completed coffee year and completely related to the arabica coffees which rose 7.9% in volume as against a 0.2% dip in robusta coffee exports for the coffee year, they further comment, contributing to the rising levels of consumer market stocks over the year.   This being a factor that has proved to be negative for sentiment over the recent months, for the New York arabica coffee market. 

Tomorrow shall be a public holiday for Brazil as the country celebrates Dia de Finados or All Souls Day, with many commercial houses due to take advantage of this holiday, to take a bridge day on Friday and to extend it into a long weekend.    Thus, one might expect to see some degree of selling activity out of Brazil in trade today, ahead of the break but perhaps muted, as despite the weaker Brazil Real that is presently trading at 3.27 to the dollar, by the prevailing soft reference prices of the New York market. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 39.92 usc/Lb., while this equates to 31.91% 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 316 bags yesterday; to register these stocks at 1,911,740 bags.  There was meanwhile a larger in number 5,664 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 46,425 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 14,167 bags or 0.65% over the week of trade leading up to Monday 30th. October, to see these stocks registered at 2,152,333 bags, on the day. 

The commodity markets were mixed in trade yesterday but with many markets falling south of par, to see the overall macro commodity index taking a mostly softer to sideways track for the day.   The Oil, Sugar and Soybean markets had a day of buoyancy, while the Natural Gas, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, 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 0.22% lower, to see this Index registered at 415.31.  The day starts with the U.S. Dollar steady and trading at 1.327 to Sterling and at 1.163 to the Euro, while North Sea Oil is near to steady and is selling at US$ 61.95 per barrel. 

The London and New York markets started the day yesterday on a modestly negative note and maintaining this softer stance, into the early afternoon trade.  As the afternoon progressed the London market came under increased pressure and extending its losses and holding onto most of these through to the close, while the New York market having likewise added to its losses, did manage to bounce back from the lows of the day. 

The London market ended the day on a very negative note and with 86.5% of the earlier losses of the day intact, while the New York market ended the day on a negative note and with 45.7% of the earlier losses of the day intact.   This follow through soft close does little to inspire confidence and one would expect to see little better

than 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. 

NOV   1902 – 43                                             DEC   125.10 – 0.80

JAN    1878 – 32                                            MAR   128.60 – 0.85

MAR   1860 – 30                                            MAY   130.95 – 0.90

MAY   1867 – 30                                            JUL    133.35 – 0.85 

JUL    1892 – 27                                            SEP    135.60 – 0.90

SEP    1899 – 28                                            DEC   139.00 – 0.85

NOV   1908 – 26                                            MAR   142.25 – 0.95

JAN    1917 – 20                                            MAY   144.25 – 1.00

MAR   1916 – 20                                            JUL    146.20 – 1.05

MAY   1921 – 20                                            SEP    148.10 – 1.10


Coffee Market Report October 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 13.52% over the week of trade leading up to Tuesday 24th. October; to register a new net short sold position of 45,989 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1.03%, to register a net long position of 33,957 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 10.98%, to register a net short sold position of 46,967 Lots.  This net short sold position which is the equivalent of 13,314,936 bags has most likely been modestly decreased, following a period of sideways trade but tending towards the positive which has since followed and likewise, that of the Managed Money fund sector of the market. 

The Uganda Coffee Development Authority UCDA have reported that the country’s coffee exports for the month of September were 132,883 bags or 63.59% higher than the same month last year, at a total of 341,839 bags.   This higher figure contributes to the countries coffee exports for the just completed October 2016 to September 2017 coffee year, to be 1,290,257 bags or 38.92% higher than the previous coffee year, at a total of 4,605,824 bags. 

This impressive figure from Uganda in terms of coffee exports, presently seals the countries position as Africa’s leading coffee supplier to the global consumer markets.  While with evidence of the young coffee that has been planted over the past few years and despite the potential for some climatic issues to dent export volumes for the present October 2017 to September 2018 coffee year, one would think that Uganda shall become an even more significant contributor in terms of not only African but also global coffee supply, in the coming years. 

This potential steady increase in Ugandan coffee production is being well supported by state sponsored programs to support more farming districts and farmers to enter the coffee industry, which is further supported by a host of private support and extension service programs to assist existing and new farmers to improve their farm husbandry and coffee yields. 

Germany and with many physical coffee market players based there, shall be off the field of play today, as the country celebrates 500 years since Martin Luther inspired the reformation for European religion.   However, this is unlikely to have any impact upon the market today, as the present lacklustre nature of the physical coffee market is having little influence upon direction.  

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 39.26 usc/Lb., while this equates to 31.18% 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 3,996 bags yesterday; to register these stocks at 1,911,424 bags.  There was meanwhile a smaller in number 31 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 52,089 bags. 

The commodity markets and with a marginally softer dollar in play were mostly showing a degree of buoyancy yesterday, to see the overall macro commodity index taking a positive track for the day.   The Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Gold and Silver markets had a day of buoyancy and the Corn market was steady, while the Coffee, Wheat and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.44% higher, to see this Index registered at 416.22.  The day starts with the U.S. Dollar steady and trading at 1.321 to Sterling and at 1.163 to the Euro, while North Sea Oil is steady and is selling at US$ 60.95 per barrel. 

The London and New York markets started the day yesterday on a modestly positive note, but with the London market soon slipping back to the south of par, while the New York market retained its modest buoyancy into the early afternoon trade.   As the afternoon progressed and with trade reasonably active within the London market but remaining thin within the New York market, the latter New York market slipped back into negative territory and the London market started to extend its losses.   This set the course for the day and while the New York market did bounce back partially from the lows of the day, the London market continued towards a soft close.  

The London market ended the day on a very negative note and with 94.4% of the earlier losses of the day intact, while the New York market ended the day on a negative note and with 45.2% of the earlier losses of the day intact.   This dismal close was accompanied by a weakening of the Brazil Real and its potential to inspire Brazilian internal market selling and with the Brazil Real at close to 3.29 to the dollar, it is unlikely to inspire much better than 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. 

NOV   1945 – 40                                             DEC   125.90 – 0.70

JAN    1910 – 34                                            MAR   129.45 – 0.70

MAR   1890 – 29                                            MAY   131.85 – 0.70

MAY   1897 – 28                                            JUL    134.20 – 0.70 

JUL    1919 – 28                                            SEP    136.50 – 0.65

SEP    1927 – 27                                            DEC   139.85 – 0.65

NOV   1934 – 27                                            MAR   143.20 – 0.60

JAN    1937 – 27                                            MAY   145.25 – 0.60

MAR   1936 – 27                                            JUL    147.25 – 0.55

MAY   1941 – 27                                            SEP    149.20 – 0.50


Coffee Market Report October 30 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 10.99% during the week of trade leading up to Tuesday 24th. October; to register a net short sold position of 46,967 Lots on the day. This net short-sold position which is the equivalent of 13,314,936 bags has most likely been marginally decreased again, following the period of mixed but overall more positive trade, which 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 short sold position within this market by 119.02% during the week of trade leading up to Tuesday 24th. October; to register a net short sold position of 5,469 Lots.  This net short sold position which is the equivalent of 911,500 bags has most likely been little changed following the period of mixed but mostly sideways trade, which has since followed. 

The extensive net short position within the New York market had been anticipated and is not much of a shock to the market, but by the very nature of size of this position and with some degree of exhaustion on the part of the speculative sector of the market, there was some short covering buying experienced ahead of the weekend.   This activity and with the Brazil Real starting to steady on Friday, having assisted to buoy the New York market for trade on Friday. 

The General Statistical Office in Vietnam with the month of October ending, forecast that the country’s coffee exports for the month shall be a relatively modest, 1.34 million bags.   Such an export performance they say, shall contribute to the countries cumulative coffee exports for the first ten months of this year to be 22% lower than the same period last year, at a total of 19.7 million bags. 

One might speculate that with the rain delays to the start of the new Vietnam crop this year and with this new crop harvest now foreseen to only start to pick up in volume in two to three weeks’ time, that the coffee exports of mostly robusta coffees shall only start to surge again in December this year.   However, with good steady demand for robusta coffees from the consumer markets at present, one might expect something of an improved performance for the coming month. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened on Friday, to register this at 38.42 usc/Lb., while this equates to 30.35% 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 4,489 bags on Friday; to register these stocks at 1,907,428 bags.  There was meanwhile a smaller in number 260 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 52,120 bags. 

The commodity markets were mixed in trade on Friday but with the assistance of the positive nature of the influential Oil markets, the overall macro commodity index took a modest positive track for the day.   The Oil, Sugar, New York arabica Coffee, Orange Juice, Soybean and Gold markets had a day of buoyancy, while the Natural Gas, Cocoa, London robusta Coffee, Cotton, Copper, Wheat, Corn and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.02% higher, to see this Index registered at 414.40.  The day starts with the U.S. Dollar near to steady and trading at 1.315 to Sterling and at 1.162 to the Euro, while North Sea Oil is steady and is selling at US$ 60.40 per barrel. 

The London market started the day on Friday on a softer note, while the New York market started the day trading around par and with both markets maintaining this stance, into the early afternoon trade.  As the afternoon progressed and with the Americans coming onto the field of play, the New York market started to attract support and to step up into positive territory, while the London market bounced off the lows and moved back to trade close to par.    The New York market following the reasonably swift move to the North settled into a positive sideways track for the balance of the day’s trade, while the London market took a hesitant sideways track mostly marginally south of par, through to the close.

The London market ended the day on a negative note and with 26.3% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 69.5% of the earlier gains of the day intact.   This mixed close but with a reasonable recovery from the lows within the London market and while the New York market had held on too much of its gains that is accompanied by the combination of the evidence of the extensive speculative short position within the New York market and a slightly firmer Brazil Real, might prove to be slightly supportive for sentiment.   Thus the chance for a steady start being due for the markets for early trade today against the prices set on Friday, as follows: 

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

NOV   1985 – 10                                             DEC   126.60 + 2.05

JAN    1944 – 5                                              MAR   130.15 + 2.00

MAR   1919 – 6                                              MAY   132.55 + 2.00

MAY   1925 – 7                                              JUL    134.90 + 1.95 

JUL    1947 – 8                                              SEP    137.15 + 1.90

SEP    1954 – 7                                              DEC   140.50 + 1.85

NOV   1961 – 6                                              MAR   143.80 + 1.80

JAN    1964 – 6                                              MAY   145.85 + 1.80

MAR   1963 – 6                                              JUL    147.80 + 1.75

MAY   1968 – 6                                              SEP    149.70 + 1.75


Coffee Market Report October 27 2017

The weather forecasts from Brazil continue to dampen market spirits, with most pointing towards the potential for rains to continue over the main coffee districts of the country through to the second week of November.  These rains due to assist to set the flowerings for the forthcoming 2018 crop, which many have forecast to be a potentially large surplus supply crop. 

Meanwhile with the Brazil Real having weakened against the U.S. dollar and now trading at 3.29 to the dollar, there has been more active internal market selling of new crop coffee stocks, which being accompanied by exporter price fixation hedge selling into the New York market, has contributed towards the prevailing soft nature of this market. 

Looming over the New York market in the meantime, is the start of the new crop harvest in Mexico and Central America, which is already starting within the lower grown districts of this producer bloc.    With the prospects that by December and with the harvest picking up in volume, that there shall be increasing volumes of sales and price fixation hedge selling coming to the market.  

Thus, for the present and so long as there are not hiccups in terms of Brazil weather for the main coffee districts, the coffee markets a looking to remain within the present relatively low trading range for the New York market and in terms of the London market, to decline and broaden the arbitrage between the markets, once the new crop harvest starts to pick up in volume.   So far and in terms of the latter factor, the indications are that by the end of next month, there shall be significant volumes of new crop robusta coffees flowing into Ho Chi Minh City. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 36.14 usc/Lb., while this equates to 29.02% 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 4,610 bags yesterday; to register these stocks at 1,902,939 bags.  There was meanwhile a smaller in number 672 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 52,380 bags. 

The commodity markets were mixed in trade yesterday but with most markets relatively flat, to see the overall macro commodity index taking something of a sideways track for the day.   The Oil, Cocoa, New York arabica Coffee, Orange Juice and Corn markets had a day of buoyancy, while the Natural Gas, Sugar, London robusta Coffee, Cotton, Copper, Wheat, 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 0.03% higher, to see this Index registered at 414.32.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.313 to Sterling and at 1.164 to the Euro, while North Sea Oil is steady and is selling at US$ 59.40 per barrel. 

The London and New York markets started the day yesterday with a degree of buoyancy, but while the New York market maintained this positive stance into the early afternoon trade, the London market slipped back to trade hesitantly either side of par.  As the afternoon progressed both markets drifted back into negative territory and while the London market continued to post a mostly negative stance, the New York market bounced back to end the day on the positive side of par. 

The London market ended the day on a negative note and with 63.2% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 56.2% of the earlier gains of the day intact.   This mixed close and with value for the New York market relatively close to par for the day, provides little in the way of direction and with the stronger U.S. dollar in play, one might expect to see little better than 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. 

NOV   1995 – 15                                             DEC   124.55 + 0.45

JAN    1949 – 12                                            MAR   128.15 + 0.35

MAR   1925 – 9                                              MAY   130.55 + 0.25

MAY   1932 – 7                                              JUL    132.95 + 0.30 

JUL    1955 – 7                                              SEP    135.25 + 0.30

SEP    1961 – 8                                              DEC   138.65 + 0.25

NOV   1967 – 8                                              MAR   142.00 + 0.30

JAN    1970 – 8                                              MAY   144.05 + 0.30

MAR   1969 – 8                                              JUL    146.05 + 0.30

MAY   1974 – 8                                              SEP    147.95 + 0.30


Coffee Market Report October 26 2017

Following the lowering of the deficit supply forecast by Rabobank, the Marex Spectron have likewise lowered their earlier forecasted deficit coffee supply for this new October 2017 to September 2018 coffee year by 50%, to now forecast a modest deficit supply of approximately 2.2 million bags.   This would be an easy to absorb by the consumer markets deficit, as they look to consumer stocks that are perhaps as much 4 million bags more than what many would consider to be a safe level. 

These modest deficit reports accompany the news of rains over the main coffee districts in Brazil and forecasts for more rains to come, which would support the forecasts for a significantly larger 2018 coffee crop from Brazil and the potential of a surplus coffee supply for the next October 2018 to September 2019 coffee year.   Thus with the reports out of Vietnam of expectations that the summer and autumn rain season shall soon finish and the new crop harvest shall start to come to the fore in volume in two to three weeks’ time, there is little in the way of supportive news coming to the coffee markets at present. 

There are however forecasts of the rising possibility for a new La Niña phenomenon to develop within the Pacific Ocean late this year or early in the new year, which would bring with it some climatic problems for many producer countries.   This factor does however remain very much a possibility rather than a certainty and it must be noted that it would need to be an intense La Niña to have a market affect upon global coffee production and that a mild La Niña would not really be something to worry about and so far, this factor is having little influence upon coffee market sentiment. 

There are continued problems being experienced within Santos port in Brazil, which is the country’s main export port and there are delays being experienced in terms of new crop coffee exports.   This problem related to the delays in completion of the dredging of the port, which is forcing vessels to cut their container capacity to sail out of port.  However, one would imagine that in terms of Brazil coffee supply to the consumer markets, that the authorities shall not sit still and that in the coming months the dredging shall be concluded and that this factor shall not be threatening to longer term global coffee supply. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.15 usc/Lb., while this equates to 28.32% 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 4,885 bags yesterday; to register these stocks at 1,898,329 bags.  There was meanwhile a smaller in number 1,855 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 53,052 bags. 

The commodity markets encountered some degree of dollar weakness that should have been supportive, but this was not the case yesterday, as many markets were on the back foot and the overall macro commodity index took a softer track for the day.  The Cocoa, Coffee, Cotton, Orange Juice and Soybean markets had a day of buoyancy and the Gold market was steady for the day, while the Oil, Natural Gas, Sugar, Copper, Wheat, Corn and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.14% lower, to see this Index registered at 414.20.  The day starts with the U.S. Dollar near to steady and trading at 1.326 to Sterling and at 1.183 to the Euro, while North Sea Oil is steady and is selling at US$ 58.50 per barrel. 

The London market started the day yesterday marginally south of par, while the New York market started the day with some early buoyancy and with the London market soon recovering to see the markets taking a positive stance into the early afternoon trade.   This seemingly and with the support of a weaker dollar assisted to inspire some degree of confidence and with modest volumes of short covering buying within the New York market coming to the fore, there were further gains for this volatile market.   There was however no real excitement or rally and both markets slipped back from the highs to continue for the rest of the day on a sideways modestly positive track.  

The London market ended the day on a positive note and with 76.2% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note but with only 42.9% of the earlier gains of the day intact.   The positive nature of this close and the possibility that the New York market still might be somewhat oversold, could assist towards a degree of caution and to inspire a steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   2010 + 17                                             DEC   124.10 + 0.90

JAN    1961 + 16                                            MAR   127.80 + 0.85

MAR   1934 + 14                                            MAY   130.30 + 0.90

MAY   1939 + 13                                            JUL    132.65 + 0.90 

JUL    1962 + 11                                            SEP    134.95 + 0.90

SEP    1969 + 10                                            DEC   138.40 + 0.90

NOV   1975 + 12                                            MAR   141.70 + 0.85

JAN    1978 + 17                                            MAY   143.75 + 0.85

MAR   1977 + 17                                            JUL    145.75 + 0.85

MAY   1982 + 17                                            SEP    147.65 + 0.85


Coffee Market Report October 25 2017

The respected commodity bank Rabobank have amended their perspective of the global coffee supply for the just completed October 2016 to September 2017 coffee year from a marginal deficit of 200,000 bags, to a 1.1 million bags surplus for this past coffee year.   While they have reduced their forecasted deficit supply for this new October 2017 to September 2018 coffee year from an earlier forecast for a 6.1 million bags deficit supply, to a more modest 4.9 million bags deficit. 

This latest report and one that considers this year’s more modest Brazil coffee crop which is allocated to contribute towards global coffee supply for the present 2017/2018 coffee year, would indicate a potential draw down of global coffee stocks for the present coffee year, of 3.8 million bags.   However, with consumer market coffee stocks considered to be perhaps as much as 4 million bags more than safe requirements, the report would indicate little reason for concern over overall coffee supply for the present coffee year. 

While with the forthcoming new Brazil 2018 coffee crop already in terms of the conilon robusta coffees due to impact upon coffee supply only seven months into this new coffee year and likewise the new arabica coffee crop due to impact upon global coffee supply ten months into the new coffee year, it would further illustrate that there is presently no reason to be concerned over longer term global coffee supply.   This factor is however only if the next 2018 Brazil coffee crop turns out to be a much larger crop as has recently been forecasted, but it is early days into the Brazil spring and summer rain season and the prospects for a larger 2018 crop are still uncertain. 

Nevertheless, and while coffee market players are presently awaiting the next couple of weeks weather reports from Brazil, the sentiment is very much weighted towards those who foresee no medium-term weather problems for Brazil, which is fuelling bearish sentiment within the New York market.   While in terms of the fortunes for the London market, the general perspective is that the summer and autumn rain season shall soon end and that new crop robusta coffees are only approximately five to six weeks away from the market.  Further contributing towards the prevailing general lack of concern, over medium to longer term global coffee supply and is very much reflected, in the direction the New York and London markets took during yesterday’s trade. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 34.98 usc/Lb., while this equates to 28.39% 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 2,827 bags yesterday; to register these stocks at 1,893,444 bags.  There was meanwhile a smaller in number 561 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,907 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 76,833 bags or 3.42% over the week of trade leading up to Monday 23rd. October, to see these stocks registered at 2,166,500 bags, on the day. 

The commodity markets were mixed in trade yesterday, but with the Oil markets showing some renewed muscle and having an influence within the overall macro commodity index, which took a positive track for the day.   The Oil, Sugar and Copper markets had a day of buoyancy, while the Natural Gas, Cocoa, Coffee, Cotton, 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 0.21% higher, to see this Index registered at 414.76.  The day starts with the U.S. Dollar steady and trading at 1.313 to Sterling and at 1.176 to the Euro, while North Sea Oil is near to steady and is selling at US$ 58.45 per barrel. 

The London market started the day yesterday marginally south of par, while the New York market started the day on a steady note and with some modest buoyancy, to see the markets taking this mixed stance into the early afternoon trade.  As the afternoon progressed both markets came under renewed pressure and with a weaker Brazil Real in play and assisting towards easier selling activity on the part of new crop arabica coffees, the New York market slid back into negative territory and with the London market increasing its losses for the day.  The London market did however bounce back from the lows, to join the New York market on something of a negative sideways track for the rest of the day. 

The London market ended the day on a negative note and with 71.9% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 76.7% of the earlier losses of the day intact.   This soft close accompanies nothing in the way of fundamentally supportive news, other than the perspective that the New York market might be suffering from a degree of speculative and fund selling exhaustion and one would think that with the Brazil Real weaker and presently trading at around 3.24 to the dollar, that the markets are due for little better than 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. 

NOV   1993 – 25                                             DEC   123.20 – 1.15

JAN    1945 – 23                                            MAR   126.95 – 1.15

MAR   1920 – 21                                            MAY   129.40 – 1.10

MAY   1926 – 21                                            JUL    131.75 – 1.10  

JUL    1951 – 22                                            SEP    134.05 – 1.15

SEP    1959 – 20                                            DEC   137.50 – 1.10

NOV   1963 – 17                                            MAR   140.85 – 1.10

JAN    1961 – 17                                            MAY   142.90 – 1.10

MAR   1960 – 17                                            JUL    144.90 – 1.10

MAY   1965 – 17                                            SEP    146.80 – 1.10


Coffee Market Report October 24 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 26.11% over the week of trade leading up to Tuesday 17th. October; to register a new net short sold position of 40,511 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.54%, to register a net long position of 34,310 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 25.86%, to register a net short sold position of 42,316 Lots.  This net short sold position which is the equivalent of 11,996,398 bags has most likely been modestly decreased to perhaps being little changed, following a period of mixed but overall sideways trade that has since followed and likewise, that of the Managed Money fund sector of the market. 

There have been some rains over the southern arabica coffee districts of Brazil and including Parana, Southern Sao Paulo and Southern Minas Gerais, but these have yet to impact upon the northern and eastern arabica and conilon robusta coffee districts over Northern Minas Gerais, Bahia and Espirito Santo.  Thus, the week continues with market players very much focused upon the daily weather reports from Brazil, as unless there are good rains forthcoming over the coming days and into early next month and with the speculative and fund sectors of the New Yorke market holding extensive short sold positions within the market, there could well be a relatively sharp corrective short covering recovery for this market. 

Meanwhile it was a quiet day for the New York market yesterday and it was a market that portrayed a degree of exhaustion, as players took a wait and see stance for the day.  While the physical coffee trade is meanwhile lacklustre in nature, with both consumer industry buyers and producers tending to watch rather than participate in active trade.  The former sector of the market assisted in taking such a stance in terms of the arabica coffees, by the insurance of the still substantial consumer market stocks and further illustrated, but the continued steady growth of the New York certified stocks. 

It would seem though that there are still short-term concerns over the delayed start to the new Vietnam crop on the part of the robusta coffee sector of the physical coffee trade, with short term supply threatening to become tighter, ahead of this potentially larger new crop.  This manifesting itself in a degree of stability for the London market, with the arbitrage between this market and the New York market having narrowed further over the past few days of trade. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 35.08 usc/Lb., while this equates to 28.21% 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 15,953 bags yesterday; to register these stocks at 1,890,617 bags.  There was meanwhile a smaller in number 6,279 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,346 bags. 

The commodity markets were mixed in trade yesterday, but with the markets modestly weighted towards a degree of buoyancy and the overall macro commodity index, taking a positive track for the day.   The U.S. Oil, Natural Gas, London robusta Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Brent Oil, Sugar, Cocoa, New York arabica 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 0.32% higher, to see this Index registered at 413.89.  The day starts with the U.S. Dollar steady and trading at 1.321 to Sterling and at 1.175 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 57.60 per barrel. 

The London and New York markets started the day yesterday on a modestly softer note and with both markets remaining south of par, into the early afternoon trade.  As the afternoon progressed but within an environment of thin trade both markets posted a recovery and moved back up into positive territory but while the London market maintained a mostly modest positive stance for the rest of the day, the New York market slipped back and took a modestly negative track for late trade. 

The London market ended the day on a steady note but with only 25% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 64.3% of the earlier losses of the day intact.  This close does little to inspire, but with some degree of uncertainty over how intense the forthcoming rains might be and with the evidence of the extensive net short sold positions within the New York market, one might expect some degree of cautions and a thinly traded steady start due for the markets for early trade today, against the prices set yesterday, as follows: 

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

NOV   2018 – 2                                               DEC   124.35 – 0.90

JAN    1968 + 3                                              MAR   128.10 – 0.90

MAR   1941 + 1                                              MAY   130.50 – 0.95

MAY   1947 + 1                                              JUL    132.85 – 1.00 

JUL    1973 + 2                                              SEP    135.20 – 0.95

SEP    1979 + 2                                              DEC   138.60 – 1.00

NOV   1980 + 2                                              MAR   141.95 – 1.00

JAN    1978 + 2                                              MAY   144.00 – 1.00

MAR   1977 + 2                                              JUL    146.00 – 1.00

MAY   1982 + 2                                              SEP    147.90 – 1.00


Coffee Market Report October 23 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 25.86% during the week of trade leading up to Tuesday 17th. October; to register a net short sold position of 42,316 Lots on the day. This net short-sold position which is the equivalent of 11,996,398 bags has most likely been marginally decreased again, following the period of mixed but overall more positive trade, which 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 short sold position within this market by 116.75% during the week of trade leading up to Tuesday 17th. October; to register a net short sold position of 2,497 Lots.  This net short sold position which is the equivalent of 416,167 bags has most likely been little changed following the period of but modestly more positive trade, which has since followed. 

It was a lot about rain or the speculation over the prospects for the weekend and this week’s rain forecasts for the Brazil coffee districts on Friday, which saw the New York market that had initially had a thinly traded steady start to once again come under pressure, as the Americas came onto the field of play and the volumes of trade started to increase.  Albeit that some degree of renewed muscle for the U.S. dollar also came into play and along with some negative influence from the charts when the markets could not hold onto early gains, to assist to dampen coffee market spirits for the day. 

The rain aside there are questions that must be asked, about the significant speculative and fund net short position within the New York market that has the potential should there be any question of the quality of the rains over Brazil this week, to attract aggressive short liquidation and a relatively sharp recovery for the market.   However, should the rainfall reports prove to be beneficial for the holding and setting of the new crop flowerings for most of the coffee districts, it might just be a case that the speculative and fund sectors of the markets might hold on to most of their shorts and to set this volatile market for another week of trading close to the lows of the prevailing trading range.  

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 36.12 usc/Lb., while this equates to 28.84% 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 7,979 bags on Friday; to register these stocks at 1,874,664 bags.  There was meanwhile a larger in number 11,015 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 60,625 bags. 

The commodity markets were mixed in trade on Friday, but with the U.S. dollar attracting some support and dampening spirits within many markets, it contributed towards the overall macro commodity index taking modestly a softer track for the day.   The Oil, Natural Gas and Orange Juice markets had a day of buoyancy, while the Sugar, Cocoa, Coffee, Cotton, Copper, 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 0.1% lower, to see this Index registered at 412.58.  The day starts with the U.S. Dollar relatively steady and trading at 1.322 to Sterling and at 1.177 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 57.40 per barrel. 

The London and New York markets started the day on Friday on a steady note and with both markets adding modest value through thin morning trade and to take a steady to positive track, into the early afternoon trade.   As the afternoon progressed though, the New York market soon slipped back into negative trade and followed by a dip south of par for the more placid London market.   The New York market triggered sell stops to accentuate the losses while the London market took something of a sideways track and joined by a partial recovery within the New York market to see both markets continue sideways towards a soft close for the day and the week. 

The London market ended the day on a negative note and with 72.7% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 56.1% of the earlier losses of the day intact.   This close while painting a poor picture for the charts, is accompanied by the factors of the extensive short sold position of the speculative and fund sectors of the market, the ability for the market to have recovered a good portion of the Friday losses by the close and the uncertainty of the rainfall reports that are due from Brazil for the next couple of days, might assist towards a degree of caution.   Thus, making one think that it is possible that there could be a degree of hesitant buoyancy due for early trade today, against the prices set on Friday, as follows: 

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

NOV   2020 – 8                                               DEC   125.25 – 1.60

JAN    1965 – 8                                              MAR   129.00 – 1.60

MAR   1940 – 10                                            MAY   131.45 – 1.60

MAY   1946 – 10                                            JUL    133.85 – 1.55 

JUL    1971 – 9                                              SEP    136.15 – 1.60

SEP    1977 – 9                                              DEC   139.60 – 1.55

NOV   1978 – 14                                            MAR   142.95 – 1.50

JAN    1976 – 14                                            MAY   145.00 – 1.45

MAR   1975 – 14                                            JUL    147.00 – 1.45

MAY   1980 – 14                                            SEP    148.90 – 1.50


Coffee Market Report October 20 2017

The weather forecasts from Vietnam are tending to indicate that the new crop harvest shall only start in any significant volume in three to four weeks’ time, by when many of the countries exporters shall start becoming desperate for new crop stocks, to support their nearby forward commitment export contracts.  Thus, while one would think, that there shall be quite some degree of internal market price resistance for early sales of new crop coffees the farmers in Vietnam are smart and fearing that once the new crop is in full swing that the reference prices of the international market start to soften, many might prove to be ready sellers at prevailing price levels. 

Brazil coffee farmers following a dry week have their focus on the potential for rain over the southern arabica coffee districts for this coming weekend and thereon, for most if not all districts for the coming week.  But in the meantime, and with the prevailing soft reference prices of the New York market hindering exporters in terms of prices they can afford to pay, the internal market selling activity remains slow for the present. 

Aside from the still to be determined weather issues for the two largest coffee producers that are so far not threatening to medium to longer term coffee supply, there really is nothing in the way of striking fundamental news forthcoming to direct market sentiment.   Other than the fact that ahead of the weekend and the potential for Brazil rainfall reports, there might be some encouragement for the short sold speculative and fund sectors of the New York market to continue from yesterday with some volumes of short covering profit taking buying activity.  

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 37.36 usc/Lb., while this equates to 29.45% 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 2,929 bags yesterday; to register these stocks at 1,866,685 bags.  There was meanwhile a larger in number 5,104 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 71,640 bags. 

The commodity markets were mixed in trade yesterday, but with the U.S. dollar coming off the boil during the day, many markets added some value and to see the overall macro commodity index taking a modest positive track for the day.   The Sugar, Cocoa, Coffee, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy and the Natural Gas market was steady, while the Oil, Cotton and Copper markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.44% higher, to see this Index registered at 413.01.  The day starts with the U.S. Dollar showing a degree of early buoyancy trading at 1.311 to Sterling and at 1.181 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 57.70 per barrel. 

The London and New York markets started the day yesterday on a positive note and with both markets maintain their positive stance, into the early afternoon trade.   Trade was however thin within the New York market but with the Americas opening up for the day and more activity coming to the board, trade picked up in volume and with short covering buy stops being triggered, the New York market posted further gains, while the London market maintained a more subdued positive stance.   The New York market did however fall back from the highs in late trade, but to nevertheless end the day with respectable gains, while the London market ended off the day close to its highs of the day. 

The London market ended the day on a positive note and with 92.3% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 68% of the earlier gains of the day intact.   This close does assist to paint a more positive technical picture for the markets and perhaps with the support of the potential for some further short covering activity within what is still a heavily sold New York market, one might expect to see a degree of follow through buoyancy for early trade today, against the prices set yesterday, as follows: 

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

NOV   2028 + 28                                             DEC   126.85 + 2.55

JAN    1973 + 24                                            MAR   130.60 + 2.50

MAR   1950 + 21                                            MAY   133.05 + 2.50

MAY   1956 + 21                                            JUL    135.40 + 2.45 

JUL    1980 + 19                                            SEP    137.75 + 2.50

SEP    1986 + 17                                            DEC   141.15 + 2.45

NOV   1992 + 17                                            MAR   144.45 + 2.40

JAN    1990 + 17                                            MAY   146.45 + 2.35

MAR   1989 + 17                                            JUL    148.45 + 2.30

MAY   1994 + 17                                            SEP    150.40 + 2.35


Coffee Market Report October 19 2017

The coffee markets remained somewhat stalled in trade yesterday, with the physical trade in coffee seemingly drifting within the doldrums of inactivity, while the speculative trade and with the managed money funds already well sold short into the New York market now focused upon the forthcoming Brazil rainfall reports for the coming week.  So far, these forecasts tending to lean towards good rains and by nature of the recent good flowering reports and illustrated by the circulation of impressive photographs, are tending to support the prospects for a large new crop for the coming year and are tending to support the bears within the market. 

Adding to the Brazil weather related bearish nature of the New York market is the slow but nevertheless steady growth and this ahead of what is generally forecasted to be a larger overall new crop for Central America, of the New York certified washed arabica coffee stocks.  This growth being a day by day and very public figure, truly indicating that there is presently no tight supply of arabica coffee for the present. 

The London market and with the prospects for a larger new Vietnam robusta coffee crop on the horizon, is tending to follow the fortunes of the New York market, albeit in terms of the relatively narrow margin of the arbitrage between these markets, one would say that the London market is relatively firm for the present.   But this might well be short lived as once the prevailing rains end over Vietnam and the new crop harvest starts, there might be reason for the funds to also contribute to some negative pressure over the London market.  

Meanwhile the inverted nature of the London market and with the premium value being offered for the prompt positions that comes with the short-term tightness of physical coffee supply ahead of the new Vietnam crop, offers little support for the international coffee trade.   Where traders are finding it difficult to utilise the London terminal market to finance the carry of robusta coffee stocks, but one might expect that once this new crop starts to come into play this market might start to return towards a more normal structure. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 35.89 usc/Lb., while this equates to 28.87% 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 5,366 bags yesterday; to register these stocks at 1,863,756 bags.  There was meanwhile a smaller in number 1,537 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 66,536 bags. 

The commodity markets had another overall lacklustre day yesterday and with many markets drifting south, to see the overall macro commodity index taking a modestly softer track for the day.  The Oil, Sugar, Cocoa and Coffee markets had a day of buoyancy, while the Natural Gas, 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 0.31% lower, to see this Index registered at 411.19.  The day starts with the U.S. Dollar near to steady and trading at 1.321 to Sterling and at 1.179 to the Euro, while North Sea Oil is steady and is selling at US$ 58.40 per barrel. 

The London market started the day yesterday marginally south of par, while the New York market started the day with early buoyancy and followed by a recovery within the London market that move back into the positive side of par, but with both markets slipping back and entering the early afternoon trade to the south of par.   As the afternoon progressed, both markets extended their losses but to soon bounce back from the lows and to return to par and with the markets proceeding to end the day with hesitant buoyancy. 

The London market ended the day on a modestly positive note and with 55.6% of the earlier modest gains of the day intact, while the New York market ended the day on a steady note and with only 27.3% of the very modest gains of the day intact.   This close and especially against the relatively modest volumes that were traded within the New York market provides no indication for direction within the coffee markets, but one might expect that with the relatively steady nature of the close, that it shall assist to instil some degree of caution and result in a steady start for early trade today against the prices set yesterday, as follows: 

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

NOV   2000 + 19                                             DEC   124.30 + 0.15

JAN    1949 + 5                                              MAR   128.10 + 0.10

MAR   1929 + 7                                              MAY   130.55 + 0.10

MAY   1935 + 8                                              JUL    132.95 + 0.15 

JUL    1961 + 8                                              SEP    135.25 + 0.05

SEP    1969 + 7                                              DEC   138.70 + 0.05

NOV   1975 + 4                                              MAR   142.05 + 0.05

JAN    1973 + 4                                              MAY   144.10 + 0.05

MAR   1972 + 4                                              JUL    146.15 + 0.05

MAY   1977 + 4                                              SEP    148.05 + 0.05

 


Coffee Market Report October 18 2017

The physical coffee trade is for the present very quiet and lacklustre in nature, with the main consumer market industries mostly on the backfoot and relatively inactive in terms of their buying activity, which is unlike the usual activity at the start of the winter roasting season for the main northern hemisphere consumer markets.   While on the producer side and with the reference prices of the terminal markets at to low side of the years price trading range, there are many showing some degree of price resistance for new business.  

Most players and including the speculative and fund sectors of the market who direct the fortunes of the terminal market are focused upon the Brazil weather reports and while for the present the prospects for rains for the coming week are proving to be negative for the fortunes of the volatile New York market, there are some questions being asked. 

This related to the medium-term weather forecasts that are presently indicating that fair rains shall be forthcoming for the end of this month and thereon for the month of November, to assist to set the good flowerings that came with the recent rains.  There are however some that indicate that these nearby month end rains might prove to be relatively modest for the northern arabica coffee districts in central Minas Gerais and Bahia and likewise, for the main conilon robusta stare of Espirito Santo.  These latter forecasts, likely to inspire a degree of caution, on the part of the speculative bears within the market. 

Meanwhile the rains keep coming to Vietnam and with further typhoon related flood reports for the coastal areas in north and central Vietnam, but while there are rains within the main central highlands coffee districts of the country, they are so far not seen to be damaging for the maturing new crop cherries.  Thus, for the present the rains have not caused any fears for the prospects of the what is generally forecasted to be a larger new crop, but they are delaying the start of the new crop in any significant volume and leaving the countries exporters to have to rely upon the much-diminished past crop stocks to fulfil their short-term forward contract export commitments.    

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.97 usc/Lb., while this equates to 28.97% 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 1,925 bags yesterday; to register these stocks at 1,858,390 bags.  There was meanwhile a larger in number 4,083 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 64,999 bags. 

These washed arabica certified stocks remain dominated by the producer bloc of Mexico and Central America and mostly so by Honduras, who contribute 58.62% of the stocks and followed by Peru who account for 12.94% of the stocks and Colombia, who account for 12.18% of the stocks.   The African producers Burundi, Rwanda, Tanzania and Uganda contribute 10.3% of the stocks and followed by modest contributions from Brazil who account for 3.67% of the stocks, India with a 1.89% contribution and Papua New Guinea, with a 0.4% contribution.   While the European based warehouses of the exchange are presently holding 74.96% of the certified stocks along with, 55.18% of the coffees pending grading for the exchange.  

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 55,333 bags or 2.41% over the week of trade leading up to Monday 16th. October, to see these stocks registered at 2,243,333 bags, on the day. 

The commodity markets had an overall lacklustre day yesterday and with many markets drifting south, to see the overall macro commodity index taking a softer track for the day.  The Natural Gas, Cocoa, New York arabica Coffee, Cotton and Orange Juice markets had a day of buoyancy, while the Oil, Sugar, London robusta Coffee, Copper, 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 0.44% lower, to see this Index registered at 412.46.  The day starts with the U.S. Dollar steady and trading at 1.318 to Sterling and at 1.176 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 58.10 per barrel. 

The London and New York markets started the day yesterday trading around par and attracting modest support within and environment of thin trade, maintain a degree of buoyancy into the early afternoon trade.  As the afternoon progressed the markets continued to take an erratic sideways track and with the New York market mostly to the positive side of par, while the London market remained mostly south of par and with the markets continuing in this manner, towards a mixed close for the day. 

The London market ended the day on a negative note and with 90.9% of the earlier losses of the day intact, while the New York market ended the day on a modestly positive note and with 30.8% of the earlier gains of the day intact.  This close does very little to inspire and one might expect to see 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. 

NOV   1981 – 7                                               DEC   124.15 + 0.40

JAN    1944 – 10                                            MAR   128.00 + 0.40

MAR   1922 – 10                                            MAY   130.45 + 0.40

MAY   1927 – 9                                              JUL    132.80 + 0.35 

JUL    1953 – 7                                              SEP    135.20 + 0.40

SEP    1962 – 4                                              DEC   138.65 + 0.45

NOV   1971 – 2                                              MAR   142.00 + 0.45

JAN    1969 – 2                                              MAY   144.05 + 0.50

MAR   1968 – 2                                              JUL    146.10 + 0.50

MAY   1973 – 2                                              SEP    148.00 + 0.50


Coffee Market Report October 17 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 18.4% over the week of trade leading up to Tuesday 10th. October; to register a new net short sold position of 32,124 Lots.   Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.81%, to register a net long position of 34,496 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 8.32%, to register a net short sold position of 33,621 Lots.  This net short sold position which is the equivalent of 9,531,404 bags has most likely been increased again, following a period of mixed but mostly negative trade that has since followed and likewise, that of the Managed Money fund sector of the market. 

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 76,308 bags or 1.05% during the month of September, to register these stocks at 7,189,719 bags at the end of the month.   It must be noted though that this is only the second month this year that these stocks have fallen and despite this dip in stocks for the month of September, they remain substantial. 

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 approximately 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 14.5 weeks of roasting activity, which most would consider to be more than a safe reserve. 

One would think that with slower sales out of a well sold Vietnam ahead of their still to start in unrest new crop and the slow start to sales and exports out of a somewhat price resistant internal market in Brazil over the past couple of months, one might expect to see the U.S.A. stocks decrease further during this month and most probably again, during the month of November.    It is most likely that it shall be the same for the leading European consumer market bloc, but by December and increasing further in January next year, there shall be the free flow of new crop Central American, Colombian and Vietnam coffees coming into the markets and even with the prospects of a more modest supply of Brazil arabica coffees through to July next year, one would not expect to see any dramatic fall in the consumer market stocks for the coming year.  But rather a return a return to more normal levels, of the equivalent of 10 to 12 weeks of roasting activity for the mainstream consumer markets. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 35.12 usc/Lb., while this equates to 28.38% 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 5,556 bags yesterday; to register these stocks at 1,856,465 bags.  There was meanwhile a larger in number 11,024 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 60,916 bags. 

The commodity markets encountered a steady to marginally positive stance being taken by the U.S. dollar and were mixed in trade yesterday, with the overall macro commodity index tending marginally softer for the day.   The Oil and Copper markets had a day of buoyancy, while the Sugar, Cocoa, Coffee, 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 0.16% lower, to see this Index registered at 414.29.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.325 to Sterling and at 1.177 to the Euro, while North Sea Oil is near to steady and is selling at US$ 57.50 per barrel. 

The London market started the day yesterday on a hesitantly steady note, while the New York market started the day marginally south of par, but with both markets soon losing their way and moving into negative territory and to maintain this softer stance into the early afternoon trade.   As the afternoon progressed and with forecasts for much needed rains for the end of the week in Brazil coming to the market, the New York market came under further pressure and followed by a less aggressive slide south for the London market, to see both the markets taking a softer track through to the close. 

The London market ended the day on a negative note and with 71.8% of the earlier losses of the day intact, while the New York market ended the day on a very negative note and with 98.2% of the earlier losses of the day intact.  This close does very little to inspire and paints something of a negative technical picture for the charts and particularly so, for the very volatile New York market.  However it would also suggest that the speculative and managed money fund sectors are by now extremely short into this market and this might well stall the bears within the market, to assist towards a hesitantly steady start for early trade today against the prices set yesterday, as follows: 

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

NOV   1988 – 21                                             DEC   123.75 – 2.70

JAN    1954 – 28                                            MAR   127.60 – 2.60

MAR   1932 – 31                                            MAY   130.05 – 2.55

MAY   1936 – 32                                            JUL    132.45 – 2.50 

JUL    1960 – 32                                            SEP    134.80 – 2.40

SEP    1966 – 32                                            DEC   138.20 – 2.40

NOV   1973 – 29                                            MAR   141.55 – 2.35

JAN    1971 – 29                                            MAY   143.55 – 2.35

MAR   1970 – 29                                            JUL    145.60 – 2.25

MAY   1975 – 29                                            SEP    147.50 – 2.25


Coffee Market Report October 16 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 8.32% during the week of trade leading up to Tuesday 10th. October; to register a net short sold position of 33,621 Lots on the day. This net short-sold position which is the equivalent of 9,531,404 bags has most likely been increased again, following the period of mixed but overall more negative trade, which 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 decrease their net short sold position within this market by 52.48% during the week of trade leading up to Tuesday 10th. October; to register a net short sold position of 1,152 Lots.  This net short sold position which is the equivalent of 192,000 bags has most likely been little changed, following the period of mixed but modestly sideways trade, which has since followed. 

The International Coffee Organisation have noted that while they had assessed Global coffee supply that they peg at a conservative 153.9 million bags for the just completed October 2016 to September 2017 coffee year as against a global coffee demand that they assess to have been 155.1 million bags, that consumer coffee stocks were at an eight-year high and were more than adequate to cover for their estimated deficit supply of 1.2 million bags. 

One must keep in mind though that by nature of the official status of the International Coffee Organisation, that it is obliged to use the official figures in terms of coffee production, as forwarded by the individual member countries.   These figures are often conservative numbers, which might in terms of the very modest deficit reported, indicate that there was probably little in the way of deficit supply for the just completed coffee year and is a factor, that would have contributed to the rise in the consumer market stocks over the past year. 

The respected Brazil analyst Safras & Mercado have reported that by Tuesday the 10th. October that 53% of the Brazils new coffee crop had been sold, which is a little behind the 56% factor at the same time last year, but is very much in line with the close to 50% factor by this time of the year.   This year’s Brazil crop was however a smaller crop and in terms of actual volumes sold, it would indicate that sales have suffered from internal market price resistance over the past two months and have been relatively slow so far. 

Vietnam is still encountering widespread rains and with typhoon Khanun now having an impact, which is delaying the start of the new crop harvest, while with the potential delay in the delivery of the much need new crop robusta coffee from the country, is assisting to buoy the fortunes of the London market.  These rains are however so far, not damaging for the potential of this foreseen by most to be a significantly larger new crop and it is still only a matter of time, before there shall be the potential for an easing in the presently tight origin supply of robusta coffee.  

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 36.55 usc/Lb., while this equates to 28.9% 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 1,686 bags on Friday; to register these stocks at 1,850,909 bags.  There was meanwhile a larger in number 10,591 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 71,940 bags. 

The commodity markets with a softer U.S. dollar in play had a day of general buoyancy on Friday, to see the overall macro commodity index taking a positive track for the day.   The Oil, Natural Gas, Sugar, London robusta Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy and the New York arabica Coffee market was steady, while the Cocoa 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 0.47% higher, to see this Index registered at 414.96.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.328 to Sterling and at 1.179 to the Euro, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 57.35 per barrel. 

The London and New York markets started the day on Friday on a steady note and with both markets soon moving north of par, to take a positive track into the early afternoon trade.  As the afternoon progressed the New York market faltered and slipped back into negative territory but to recover prior to taking an erratic sideways track for the rest of the day and trading either side of par through to the close, while the London market managed to stay mostly within positive territory through to the close. 

The London market ended the day on a positive note and with 70% of the earlier gains of the day intact, while the New York market ended the day on a steady note and with only 12.5% of the earlier modest gains of the day intact.  This close provides little in the way of direction and especially so for the relatively muted in trade New York market, but perhaps with evidence of the extended net short position within the New York market there shall be some degree of caution to set the markets for a steady start for early trade today, against the prices set on Friday, as follows: 

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

NOV   2009 + 12                                             DEC   126.45 + 0.10

JAN    1982 + 14                                            MAR   130.20 + 0.10

MAR   1963 + 12                                            MAY   132.60 + 0.10

MAY   1968 + 9                                              JUL    134.95 + 0.10 

JUL    1992 + 9                                              SEP    137.20 + 0.10

SEP    1998 + 7                                              DEC   140.60 + 0.10

NOV   2002 + 5                                              MAR   143.90 + 0.10

JAN    2000 + 4                                              MAY   145.90 + 0.10

MAR   1999 + 1                                              JUL    147.85 + 0.05

MAY   2004 + 1                                              SEP    149.75 + 0.05


Coffee Market Report October 13 2017

The El Salvador Coffee Council have reported that the countries coffee exports for the just completed October 2016 to September 2017 coffee year were 28,144 bags or 5.82% higher than the previous coffee year, at a total of 511,724 bags.  This being a modest increase in terms of the overall performance of the production and exports from the producer bloc made up from Mexico and the Central American countries for this past coffee year, where exports have overall been even more impressive and especially so, from Honduras. 

In terms of the new crop from this producer bloc the forecasts are for an even more impressive harvest to come to the fore over the October to March harvest and with the lower grown districts already starting to be harvested within many of the countries, with a new crop from this bloc foreseen to be around 20.5 million bags.  A crop of mostly fine washed arabica coffees, which shall be joined by a larger new main crop and followed in the middle of next year by a larger new Mitaca crop from Colombia, where coffee supply for the October 2017 to September 2018 coffee year shall most likely exceed 15 million bags. 

The Climate Prediction Centre department of the National Weather Service in the U.S.A. have reported that they foresee a 55% chance for a new La Niña phenomenon to develop within the Pacific Ocean in the coming months, but by nature of the relatively modest chance, it would seem, that this might not be an intense La Niña and so far, is not threatening for medium term global coffee production.   Thus, with forecasts for later in the month rains for Brazil, there are presently no weather-related issues that are threatening for the potential for rising coffee production for the Latin American countries for the coming year. 

The only question in terms of weather remains with when the rain season over Vietnam shall stop, so as to trigger the new main crop harvest to kick off in intensity and while for the present the rains continue, the forecasts are for a drier November and for the harvest of what is foreseen to be a much larger new crop to come into play.  Bringing with it as Indonesia is seen to be close to sold out, much needed new robusta coffee supply for the consumer markets. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.08 usc/Lb., while this equates to 29.35% 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 3,718 bags yesterday; to register these stocks at 1,849,223 bags.  There was meanwhile a smaller in number 535 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,349 bags. 

The commodity markets remained mixed yesterday, with the overall macro commodity index taking a sideways stance for the day.  The Natural Gas, Cocoa, London robusta Coffee, Copper, Corn, Soybean, Gold and Silver markets had a day of buoyancy, while the Oil, Sugar, New York arabica Coffee, Cotton, Orange Juice and Wheat markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.01% higher, to see this Index registered at 413.00.  The day starts with the U.S. Dollar near to steady and trading at 1.328 to Sterling and at 1.184 to the Euro, while North Sea Oil is steady and is selling at US$ 55.55 per barrel. 

The London market started the day yesterday showing early buoyancy, while the New York market started the day hesitantly to the north of par, but with the New York market soon slipping back south of par and with the markets taking a mixed stance into early afternoon trade.  As the afternoon progressed the New York market lost some more weight and headed towards a softer close, while the London market shrugged off negative pressure and headed towards a positive close for the day. 

The London market ended the day on a very positive note and with 95.5% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 32.1% of the earlier losses of the day intact.  This mixed close does little to indicate direction, but with little in the way of positive fundamental news coming to the coffee markets and the charts tending to look soft, one would expect to see little better than 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. 

NOV   1997 + 22                                             DEC   126.35 – 0.45

JAN    1968 + 21                                            MAR   130.10 – 0.45

MAR   1951 + 20                                            MAY   132.50 – 0.40

MAY   1959 + 20                                            JUL    134.85 – 0.40 

JUL    1983 + 19                                            SEP    137.10 – 0.40

SEP    1991 + 20                                            DEC   140.50 – 0.35

NOV   1997 + 18                                            MAR   143.80 – 0.35

JAN    1996 + 15                                            MAY   145.80 – 0.35

MAR   1998 + 12                                            JUL    147.80 – 0.35

MAY   2003 + 12                                            SEP    149.70 – 0.35


Coffee Market Report October 12 2017

The traditionally conservative Brazilian Institute of Geography and Statistics IBGE are reported to have said that they have after their latest survey, reduced by 3.8% their assessment of the just completed new crop in Brazil, to a new figure of 45.9 million bags.   This number related to 35.7 million bags of arabica coffees and 10.2 million bags of conilon robusta coffees, but while the news might have been seen to have been supportive for market sentiment, the markets apparently took into consideration that one might perhaps look to the conservative nature of the source of this report and took a reverse track in trade yesterday. 

This makes it clear that the size of this year’s new crop in Brazil as against the pending larger new crops from Central America, Colombia and Vietnam and the large volumes of consumer market stocks is not a factor, but rather what shall be the prospects for the next 2018 Brazil crop.   In this respect and following the rains at the end of September and for the first week of October, there are reports of massive flowerings over most of the main arabica coffee districts and while this week is dry and it is forecasted that most districts might remain so until the first half of next week, the meteorological forecast are for rain for the rest of the month. 

The forecasts for these rains for the last two weeks of the month and their potential to influence the setting of what has been a good flowering towards next year’s arabica coffee crop, has had a negative influence upon market sentiment.   Albeit that should these forecasted rains prove to be modest in nature, there would be a very sharp reversal in such sentiment. 

Meanwhile and ahead of todays Nossa Senhora de Aparecida public holiday in Brazil which is likely to be extended into a long weekend for many within the industry, it is reported that internal market coffee trade has been lacklustre in nature.  Likewise, with such price resistance in play, it has had its influence upon the asking prices on the part of the exporters and resulting in muted Brazil selling activity that shall presumably remain the case until the return to a full working week, post the weekend. 

In Vietnam there continues to be rains over most of the main coffee districts and the much-awaited new crop harvest has yet to kick in, which leaves exporters with mostly only the much-depleted stocks from the past crop, to fulfil their October and November robusta coffee forward sale commitments.    This scenario has however, already been factored in and for the present is not having any market effect upon market sentiment, but it the rains continue into the coming month, one might start to see short term supply concerns starting to have an influence within the London market.  

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 38.49 usc/Lb., while this equates to 30.35% 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 2,890 bags yesterday; to register these stocks at 1,845,505 bags.  There was meanwhile a smaller in number 2,696 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,884 bags. 

The commodity markets remained mixed yesterday, but with a weaker U.S. dollar in play there was buoyancy within many markets, to see the overall macro commodity index taking a modest positive track for the day.   The Oil, Natural Gas, Sugar, Cocoa, Copper and Orange Juice markets had a day of buoyancy and the Wheat and Soybean markets were steady, while the Coffee, Cotton, Corn, Gold and Silver markets had a softer day’s trade and particularly so for the coffee markets that fell out of bed and were the feature for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1% higher, to see this Index registered at 412.98.  The day starts with the U.S. Dollar near to steady and trading at 1.325 to Sterling and at 1.187 to the Euro, while North Sea Oil is near to steady and is selling at US$ 56.45 per barrel. 

The London and New York markets started the day yesterday with modest losses, to see both markets continue to trade south of par into the early afternoon trade.   As the afternoon progressed the New York market and with photographs of good flowerings in Brazil circulating came under pressure and started to trigger stop losses, which saw the market accentuate the losses and followed in a more subdued manner, by the London market.   This remained the scenario for the rest of the day and while both markets experienced some modest bounces back from the lows, the markets continued towards a very soft close for the day. 

The London market ended the day on a negative note and with 69.4% of the earlier losses of the day intact, while the New York market ended the day on a very negative 94.4% of the earlier losses of the day intact.   This close does little to inspire confidence and paints something of a negative technical picture for the markets, but perhaps with the softer nature of the U.S. dollar and the absence of Brazilian selling activity that is due for the day, there might be some degree of corrective buying coming into play and the prospects for some modest buoyancy for early trade today, against the prices set yesterday, as follows: 

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

NOV   1975 – 32                                             DEC   126.80 – 4.20

JAN    1947 – 34                                            MAR   130.55 – 4.15

MAR   1931 – 35                                            MAY   132.90 – 4.15

MAY   1939 – 36                                            JUL    135.25 – 4.15 

JUL    1964 – 37                                            SEP    137.50 – 4.20

SEP    1971 – 35                                            DEC   140.85 – 4.20

NOV   1979 – 31                                            MAR   144.15 – 4.20

JAN    1981 – 31                                            MAY   146.15 – 4.20

MAR   1986 – 31                                            JUL    148.15 – 4.15

MAY   1991 – 31                                            SEP    150.05 – 4.10


Coffee Market Report October 11 2017

The exporters association in Brazil Cecafé have commented upon the unusually low volume of coffee exports during the month of September and while noting that there has been some contribution to this lower volume from the smaller arabica coffee crop this year, they note that farmers are showing price resistance and are holding back new crop coffee stocks.   Further commenting that many farmers following the erratic and often dry weather over August and September this year, no longer believe in the prospects of a super coffee crop of approximately 60 million bags for 2018.  

It is however early days still within the traditional Brazil spring and summer October to April rain season and while it has been mostly dry during September and perhaps damaging to some of the early flowering that came with a short spell of August rains, there have been rains and so long as the second half of October is accompanied by more rains, there are still prospects for and improved arabica coffee crop in 2018.   With most within the market now focused upon the Brazil weather reports that shall be forthcoming, over the next two weeks. 

Meanwhile tomorrow shall be the Nossa Senhora de Aparecida public holiday in Brazil and with many commercial enterprises taking Friday as a bridge holiday and an extended long weekend, which can be expected to slow coffee trading activity out of Brazil for the second half of the week.   Albeit that trade is already somewhat lacklustre in nature. 

In terms of coffee demand within the growing eastern European markets it is interesting to note the that Russian customs have reported that the countries coffee imports for the first eight months of this year were 258,333 bags or 14.71% higher than the same period in the previous year, at a total of 2,015,000 bags.  This might not of course be entirely related to consumption growth but could be related to a number of factors, such as the advantageous purchasing of relatively soft in prices coffee and the declining market share held by imported coffee brands. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.14 usc/Lb., while this equates to 31.4% 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 3,966 bags yesterday; to register these stocks at 1,842,615 bags.  There was meanwhile a similar in number 3,988 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 64,580 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 66,833 bags or 2.83% over the week of trade leading up to Monday 9th. October, to see these stocks registered at 2,298,667 bags on the day. 

The commodity markets were relatively robust yesterday, to see the overall macro commodity index taking an upside track for the day.   The Oil, Sugar, Cocoa, London robusta Coffee, Copper, Gold and Silver markets had a day of buoyancy, while the New York arabica coffee market followed the trend, but to end only on a steady note for the day.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.03% higher, to see this Index registered at 412.58.  The day starts with the U.S. Dollar near to steady and trading at 1.318 to Sterling and at 1.177 to the Euro, while North Sea Oil is showing a degree of early buoyancy and is selling at US$ 56.65 per barrel. 

The London and New York markets started the day yesterday with modest early buoyancy and, to see both markets taking a positive stance into the early afternoon trade.  As the afternoon progressed the markets posted further gains but faltered in late trade and slipped back into negative territory, but to bounce off the lows and to see the London market end the day on a positive note and the New York market on a steady note for the day. 

The London market ended the day on a positive note and with 58.3% of the earlier gains of the day intact, while the New York market ended the day on a steady note and with only 2.9% of the earlier gains of the day intact.  This close might be seen to be somewhat neutral and provides little indication for direction, which might indicate that that the markets are due for 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. 

NOV    2007 + 5                                              DEC   131.00 + 0.05

JAN    1981 + 7                                              MAR   134.70 + 0.10

MAR   1966 + 7                                              MAY   137.05 + 0.05

MAY   1975 + 6                                              JUL    139.40 + 0.05 

JUL    2001 + 7                                              SEP    141.70 + 0.05

SEP    2006 + 7                                              DEC   145.05 unch

NOV   2010 + 7                                              MAR   148.35 unch

JAN    2012 + 7                                              MAY   150.35 unch

MAR   2017 + 7                                              JUL    152.30 – 0.05

MAY   2022 + 7                                              SEP    154.15 – 0.10


Coffee Market Report October 10 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 106.3% over the week of trade leading up to Tuesday 3rd. October; to register a new net short sold position of 27,131 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 0.13%, to register a net long position of 34,776 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 73.67%, to register a net short sold position of 31,039 Lots.  This net short sold position which is the equivalent of 8,799,419 bags has most likely been significantly decreased again, following a period of mixed but mostly positive trade that has since followed and likewise, that of the Managed Money fund sector of the market. 

The Customs Authorities in Vietnam and with more precise figures in hand, have reported that the country’s coffee exports of mostly robusta coffees for the month of September were lower than initially expected, at only 1,325,000 bags.    This they say has contributed to the countries coffee exports for the just completed October 2016 to September 2017 coffee year to have been 14.9% lower than the previous 2015/2016 coffee year, at a total of 24.7 million bags. 

This figure is alike or perhaps only marginally lower than the previous harvest and in terms of the countries close on 3 million bags of domestic coffee demand, it is a good indication of how low the carryover stocks shall be, into the soon to start new crop harvest.   It is only a question as to when the rain season that is tending to linger a little shall halt, as to when the much-needed new crop harvest shall start to pick up in volume.   But in the meantime, and ahead of these new crop coffees coming into play, there are expectations that export volumes of robusta coffees from Vietnam shall be relatively low for this and the coming month of November. 

The Coffee Board of India have reported that the country’s coffee exports for the October 2016 to September 2017 coffee year were 9.36% higher than the previous 2015/2016 coffee year, at a total of 5,743,550 bags.  These exports that include re-exports of imported coffees and at a value only 7.31% higher than the previous coffee year, come in ahead of the Coffee Boards earlier forecast that the countries new crop coffee supply for the new October 2017 to September 2018 coffee year shall be 12.3% higher than the just completed 2016/2017 coffee year.   Thus joining Vietnam, Colombia and Central America in terms of forecasts, who are all looking towards rising coffee supply for this new coffee year and countered only, by the more modest Brazil crop this year. 

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 41.41 usc/Lb., while this equates to 31.62% 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 4,705 bags yesterday; to register these stocks at 1,846,581 bags.  There was meanwhile a smaller in number 3,115 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 60,592 bags. 

The commodity markets were mixed but with many markets on the back foot yesterday, to see the overall macro commodity index taking a hesitant sideways track yesterday.  The Oil, Sugar, New York arabica Coffee, Copper, Orange Juice, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Cocoa, London robusta Coffee, Cotton, 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 0.05% lower, to see this Index registered at 408.38.  The day starts with the U.S. Dollar near to steady and trading at 1.317 to Sterling and at 1.177 to the Euro, while North Sea Oil is near to steady and is selling at US$ 55.60 per barrel. 

The London and New York markets started the day yesterday with early buoyancy, but with the London market soon coming under pressure and falling back to trade either side of par, while the New York market maintained a positive stance, into the early afternoon trade.   As the afternoon progressed the New York market retained its buoyancy and added some value, while the London market remained under pressure and to fall back further in value in late trade, while the New York market shed some of its gains. 

The London market ended the day on a soft note and with 71.4% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 50% of the earlier gains of the day intact.  This mixed close paints a somewhat indecisive picture and with little in the way of supportive fundamental news in play for the present might indicate that the markets are due for 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. 

NOV    2003 – 12                                            DEC   130.95 + 0.95

JAN    1974 – 15                                            MAR   134.60 + 1.00

MAR   1959 – 17                                            MAY   137.00 + 1.05

MAY   1969 – 17                                            JUL    139.35 + 1.05 

JUL    1994 – 17                                            SEP    141.65 + 1.05

SEP    1999 – 17                                            DEC   145.05 + 1.05

NOV   2003 – 17                                            MAR   148.35 + 1.10

JAN    2005 – 17                                            MAY   150.35 + 1.10

MAR   2010 – 17                                            JUL    152.35 + 1.15

MAY   2015 – 17                                            SEP    154.25 + 1.15


Coffee Market Report October 09 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 73.67% during the week of trade leading up to Tuesday 3rd. October; to register a net short sold position of 31,039 Lots on the day. This net short-sold position which is the equivalent of 8,799,419 bags has most likely been decreased again, following the period of mixed but overall more positive trade, which 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 short sold position within this market by 4,152.63% during the week of trade leading up to Tuesday 3rd. October; to register a net short sold position of 2,424 Lots.  This net short sold position which is the equivalent of 404,000 bags has most likely been little changed to possibly marginally degreased again, following the period of mixed but modestly more positive trade, which has since followed. 

The respected Brazilian related coffee importers Wolthers Douque USA were reported on Reuters on Friday that they foresee weather permitting, that Brazil might be due for a surplus coffee crop of 59.02 million bags in 2018.   This would if it proves to be true and with a domestic demand now estimated by the local industry at approximately 22 million bags, leave over 37 million bags available for export and for the rebuilding of the now much depleted stocks. 

The question is thought what shall the weather in Brazil bring as following last week’s good overall rains this week is expected to be generally dry, but with forecasts for more rains to come into play for the coming week and in good time, to assist to set the new crop flowerings.   But it is early days and one can expect to see many Brazil weather related reports coming to the fore for the last quarter of this year, to support a degree of volatility for the terminal markets.   In this respect, one would think the New York market, more so than the more stable London market. 

Tropical Storm Nate which impacted quite severely over most of Central America last week had brought with it heavy rains and has with the accompanying floods and landslides, some damage to internal market road infrastructure.   However in terms of the maturing new coffee crops from the region the reports so far, would indicate that there has been very little in the way of cherry drop and damage to the potential for an overall larger new crop from the region.   

The January 2018 to December 2017 contracts arbitrage between the London and New York markets broadened on Friday, to register this at 39.78 usc/Lb., while this equates to 30.6% 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 330 bags on Friday; to register these stocks at 1,841,876 bags.  There was meanwhile a larger in number 2,959 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 63,707 bags. 

The commodity markets were mixed but weighted towards a negative trend on Friday, to see the overall macro commodity index taking a softer track for the day.   The Cocoa, Coffee, Gold and Silver markets nevertheless had a day of buoyancy, while the Oil, Sugar and Copper markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.44% lower, to see this Index registered at 408.60.  The day starts with the U.S. Dollar near to steady and trading at 1.310 to Sterling and at 1.173 to the Euro, while North Sea Oil is steady and is selling at US$ 55.95 per barrel. 

The London and New York markets started the day on Friday with a degree of buoyancy and with both markets taking a positive track into the early afternoon trade, with the New York market proving to be the more robust player and adding value as the afternoon progressed.   The New York market stalled briefly but this was short lived and with buy stops being triggered lifted itself to a higher platform, which was followed by more modest gains for the London market, before both markets took a positive sideways track through to the close. 

The London market ended the day on a positive note and with 84.6% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 80% of the earlier gains of the day intact.  This close shall perhaps assist to paint a more positive technical picture for the markets but with the markets still lacking strong fundamentally supportive news for the present, one might expect the markets to be only hesitantly steady for early trade today, against the prices set on Friday, as follows: 

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

NOV    2015 + 15                                            DEC   130.00 + 2.80

JAN    1989 + 22                                            MAR   133.60 + 2.85

MAR   1976 + 21                                            MAY   135.95 + 2.80

MAY   1986 + 20                                            JUL    138.30 + 2.85 

JUL    2011 + 21                                            SEP    140.60 + 2.85

SEP    2016 + 22                                            DEC   144.00 + 2.85

NOV   2020 + 22                                            MAR   147.25 + 2.85

JAN    2022 + 22                                            MAY   149.25 + 2.85

MAR   2027 + 22                                            JUL    151.20 + 2.80

MAY   2032 + 22                                            SEP    153.10 + 2.75