Market Reports

Coffee Market Report November 12 2018

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 11.29% over the week of trade leading up to Tuesday 6th. November; to register a new net short sold position of 39,372 Lots.   This net short-sold position which is the equivalent of 11,161,788 bags has most likely been little changed, following the period of mixed but overall sideways trade, that has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within this market by 25.2% during the week of trade leading up to Tuesday 6th. November; to register a net short sold position of 3,580 Lots on the day.  This net short sold position which is the equivalent of 596,667 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall more sideways trade, which has since followed. 

The International Coffee Organisation ICO have reduced their forecast for global coffee production for the just completed October 2017 to September 2018 coffee year, to 163.51 million bags, which they say fuelled a global surplus coffee supply of a more modest 1.59 million bags.   But this was ahead of the significantly larger new Brazil crop this year, which many foresee shall assist to fuel a global coffee supply surplus for the new October 2018 to September 2019 coffee year, which shall result in a global coffee supply surplus of in excess of 8 million bags.  A factor that presently supports the prevailing bearish sentiment within the coffee markets. 

The well-respected U.S. Department of Agriculture USDA have revised upwards by 5.32% their assessment of the new Brazil coffee crop this year, to now report this crop at 63.4 million bags.    This latest assessment they say has resulted in a new Brazil coffee crop this year, which is 12.5 million bags or 24.56% larger than the previous years coffee crop, with the new crop being related to 46.9 million bags of arabica coffees and 16.5 million bags of conilon robusta coffees.   Resulting in an 8.4 million bags increase in Brazil arabica coffee supply and a 4.1 million bags increase in conilon robusta coffee supply, for the present October 2018 to September 2019 coffee year. 

The Vietnam Customs Department have reported that the countries coffee export for the month of October were 2,301,850 bags, which they say has contributed to the country’s cumulative coffee exports for the first ten months of this year to be 22.2% higher than the same period in the previous year, at a total of in excess of 26.3 million bags.   But they do note that despite the sharp increase in volume of coffee exports that in line with the softer nature of the international coffee prices, that revenue from these exports was only 1.8% higher, at approximately 3 billion U.S. dollars.  

The March 2019 to March 2019 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 40.71 usc/Lb., while this equates to 34.65% 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 4,617 bags; to register these stocks at 2,456,956 bags.  There were meanwhile 5,315 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 37,873 bags. 

The commodity markets encountered a firming U.S. dollar and softer day’s trade for most markets on Friday, to see the overall macro commodity index taking a softer track for the day.  The Natural Gas and Soybean markets nevertheless ended the day on a positive note and the London robusta coffee market ended the day on a steady note, while the Oil, Sugar, Cocoa, New York arabica coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.74% lower; to see this index registered at 409.20.   The day starts with the U.S. Dollar showing some degree of buoyancy steady and trading at 1.289 to Sterling, at 1.131 to the Euro and with the US Dollar buying 3.733 Brazilian Real, while North Sea Oil is steady and selling at US$ 69.65 per barrel. 

The coffee markets started the day on Friday on a softer note and with both markets taking a softer track, into the early afternoon trade.   As the afternoon progressed the New York market and in line with the softer nature of the overall macro commodity index continued to lose value, but with the London market bouncing off the lows and taking on a positive stance and finally posting a full recovery for the day.   

The London market ended the day on a steady note, while the New York market ended the day on a very negative note and with 96.4% of the earlier losses of the day intact.   The close in New York does little to inspire confidence and likewise, the repetitive negative fundamental news that is coming to the coffee markets, which would make one think that the markets are due little more than a near to steady start for early trade today.    Against the prices set on Friday, as follows: 

London Robusta US$ / Mt.       New York Arabica Usc/Lb.                           

                                                                                               

NOV     1,661    +  1                  DEC     113.85  - 2.80

 JAN      1,685    +  1                  MAR     117.50  - 2.70

 MAR     1,693    unch               MAY     120.40  - 2.60

 MAY     1,704    - 4                   JULY    123.15  - 2.55

 JULY    1,712    -  7                  SEPT   125.70  - 2.50

 SEPT    1,720    -  10                 DEC     129.15  - 2.55

 NOV     1,728    -  12                 MAR     132.55  - 2.50

 JAN      1,738    -  14                 MAY     134.65  - 2.50

 MAR     1,749    -  15                 JULY    136.55  - 2.50

 MAY     1,766    -  15                 SEPT   138.30  - 2.50


Coffee Market Report November 11 2018

9th November, 2018.The January 2019 to December 2018 contracts arbitrage between the London and New York markets widened yesterday, to register this at 40.26 usc/Lb., while this equates to 34.52% 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 5,530 bags; to register these stocks at 2,452,339 bags.  There were meanwhile 22,988 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 43,188 bags.

The commodity markets encountered a softer day yesterday, after two day meetings the US Federal Reserve held interest rates steady and the US Dollar posted gains against a basket of other currencies.  It was a lower day for Oil, Sugar, Cocoa, Copper, Orange Juice, Wheat, Soybean, Gold, Silver, Platinum and Palladium markets.  The few winners on the day in steady to positive territory were Cotton, Corn and arabica Coffee.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.81% lower; to see this index registered at 412.28.   The day starts with the U.S. Dollar steady and trading at 1.305 to Sterling, at 1.134 to the Euro and with the US Dollar buying 3.76 Brazilian Real, while North Sea Oil is steady and selling at US$ 68.60 per barrel.

The coffee markets started the day in mildly softer territory, the London market subdued and steady under par for the most part of the morning, whereas it was a busy start in New York which found underlying buyer support in mostly switch activity in the early session, pushing levels into positive territory and triggering stops on the way up, although the upward momentum was reigned within a relatively narrow range.  The markets were both trading in positive territory by midsession, buoyancy assisted by hefty volumes in New York which maintained a positive track until the last couple of hours in the day. 

Although a much quieter day in London by comparison, both markets saw a late in the day reversal of earlier gains as the overall softer tone across the commodities and a firming US Dollar spilled into the coffee markets.  New York briefly lost all gains and returned to par but with a last hour push back into positive territory and close in positive territory.  London tracked below par as the day drew to a close to settle around the middle of the days’ trading range.  A hefty volume day of primarily switch activity in New York which registered 71,461 Lots traded in the two front months on the day, as first notice on the prompt month approaches on 21st November, while in London a moderate volume day to set the close yesterday, as follows;

 London Robusta US$ / Mt.       New York Arabica Usc/Lb.                                  
 NOV     1,660    -  7                  DEC     116.65  +  1.05
 JAN      1,684    -  3                  MAR    120.20  +  0.75
 MAR     1,693    -  5                  MAY     123.00  +  0.70
 MAY     1,708    -  3                  JULY    125.70  +  0.75
 JULY    1,719    -  4                  SEPT   128.20  +  0.75
 SEPT    1,730    -  5                  DEC     131.70  +  0.85
 NOV     1,740    -  9                  MAR     135.05  +  0.90
 JAN      1,752    -  10                 MAY     137.15  +  0.90
 MAR     1,764    -  10                 JULY    139.05  +  0.90
 MAY     1,781    -  13                 SEPT   140.80  +  0.90


Coffee Market Report November 08 2018

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of October was 1.2% higher than the same month last year, at a total of 1,086,000 bags.  This is the first month of exports for the present October 2018 to September 2019 coffee year, which registered total production over the past twelve months of October 2017 to September 2018 coffee year at a total 13,990,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of October were 79,000 bags or 6.8% lower than the same month last year, at a total of 1,076,000 bags.  Colombia’s cumulative coffee exports over the past twelve months October 2017 to September 2018 registered a total 12,956,000 bags.

The January 2019 to December 2018 contracts arbitrage between the London and New York markets widened yesterday, to register this at 39.08 usc/Lb., while this equates to 33.81% 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 1,092 bags; to register these stocks at 2,446,809 bags.  There were meanwhile 4,215 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 20,200 bags.

The commodity markets encountered a steady day yesterday, the USA which is still the largest economy reported midterm election results that were seemingly anticipated by the markets with limited and consolidatory reaction.  The US Dollar was steady to turn slightly softer on the day. It was a lower day for Oil, Corn, Soybean markets and a positive day for Cocoa, Coffee, Sugar, Cotton, Copper, Orange Juice, Wheat, Gold, Silver, Platinum and Palladium.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.42% higher; to see this index registered at 415.68.   The day starts with the U.S. Dollar steady and trading at 1.312 to Sterling, at 1.142 to the Euro and with the US Dollar buying 3.73 Brazilian Real, while North Sea Oil is steady and selling at US$ 70.60 per barrel. 

The coffee markets opened the day on a positive note, London tracking upward in incrementally positive territory and in New York a positive start that turned into choppy morning in a narrow trading range.   London continued on a relatively low volume, positive but limited range to midsession while New York met with additional buying support as the business day opened in the Americas. The day progressed to the finish line in a quiet session in London and a hefty volume of trade registered in New York, to set the close in the upper range of trade for London and just under the day’s highs in New York, in positive territory for both markets, as follows: 

London Robusta US$ / Mt.       New York Arabica Usc / Lb.                            

 NOV     1,667    +  16                DEC     115.60  +  2.35
 JAN      1,687    +  18                MAR     119.45  +  1.80
 MAR     1,698    +  15                MAY     122.30  +  1.85
 MAY     1,711    +  13                JULY    124.95  +  1.90
 JULY    1,723    +  11                SEPT   127.45  +  1.90
 SEPT    1,735    +  9                  DEC     130.85  +  1.90
 NOV     1,749    +  9                  MAR     134.15  +  1.85
 JAN      1,762    +  9                  MAY     136.25  +  1.85
 MAR     1,774    +  9                  JULY    138.15  +  1.90
 MAY     1,794    +  9                  SEPT   139.90  +  1.90


Coffee Market Report November 07 2018

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.55 usc/Lb., while this equates to 33.04% 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 1,585 bags; to register these stocks at 2,445,717 bags. There were meanwhile 5,201 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 24,415 bags.

The certified Robusta coffee stocks held against the London exchange, were seen to increase by 35,667 bags or 2.29% over the week of trade leading up to Monday 5th. November, to see these stocks registered at 1,590,667 bags.

Following a sharply higher new Brazil conilon robusta coffee crop this year and post a year of almost no exports of these coffees that are used in volume by the Brazil domestic roasting industry, there has been a steady flow of these coffees coming to the consumer markets. Much of this has been shipped to Europe, but with the taste profile not favoured by many of the European industries, a good percentage has made its way to the certified stocks of the London robusta coffee exchange. It is reported that so far since July, that 556,000 bags of Brazil conilon robusta coffees have been graded for the exchange and have contributed towards the 52% growth in the London certified robusta coffee stocks over the period of July to October this year.

It was a mostly softer day on the commodity markets yesterday, with the focus on the US midterm election results, the approaching Federal Reserve meetings to be held this week and a firming US Dollar on the day. It was a softer day for the Oil markets, Coffee, Cotton, Orange Juice, Corn, Cotton, Soybean, Copper, Gold, Silver and Palladium markets. It was a firmer day for Cocoa, Wheat and Platinum markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.70% lower; to see this index registered at 413.94. The day starts with the U.S. Dollar steady and trading at 1.312 to Sterling, at 1.144 to the Euro and with the dollar buying 3.76 Brazilian Real, while North Sea Oil is steady and selling at US$ 70.93 per barrel.

The London and New York markets started the day yesterday on a positive note, a trend that carried to midsession. The New York market took a softer turn as the day progressed, while London held in positive territory for the most part to take a lower track toward the latter half of the day. New York registered a mild recovery to approach par once more but met once again with speculative selling activity at the top, while the added weight of a firming US Dollar, along with softer Brazil Real leaned in to push this market lower in a hefty volume day. The markets set the close after an overall softer performance on the day in New York and a relatively light volume day and lower close in London, to register the close in both markets in negative territory, as follows:

London Robusta US$/MT New York Arabica Usc/Lb.

NOV  1,651 - 19                 DEC   113.25 - 3.85
JAN  1,669 - 19                  MAR  117.65 - 3.40
MAR 1,683 - 20                  MAY  120.45 - 3.20
MAY 1,698 - 20                  JULY 123.05 - 3.10
JULY 1,712 - 20                 SEPT 125.55 - 2.95
SEPT 1,726 - 21                DEC  128.95 - 2.90
NOV  1,740 - 21                MAR  132.30 - 2.90
JAN  1,753 - 23                 MAY  1 34.40 - 2.90
MAR  1,765 - 23                JULY 136.25 - 2.95
MAY  1,785 - 23                SEPT 138.00 - 2.90

Coffee Market Report November 06 2018

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 25.5% over the week of trade leading up to Tuesday 30th. October; to register a new net short sold position of 25,874 Lots.  Meanwhile the longer term in nature Index Fund sector of this market decreased their net long position within the market by 3.05%, to register a net long position of 46,626 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 14.62%; to register a new net short sold position of 44,381 Lots. This net short-sold position which is the equivalent of 12,581,817 bags has most likely been further decreased, following the period of mixed but overall more positive trade, that has since followed and likewise, that of the Managed Money Fund sector of the market. 

The coffee markets encountered the news of the further reduction in the speculative fund short positions within the terminal markets, along a weakening of the Brazil Real.   This accompanied by the return from their long weekend holiday of the Brazilians, which brought with it increased price fixation hedge selling for the New York market and possibly also with a larger new conilon robusta coffee crop and export activity for these coffees, some similar selling for the London market. 

There are also many who forecast that the new Vietnam crop shall be close to the bumper crop levels of the last crop, which is coming to the fore fuel bearish sentiment.    While with the new Mexican and Central American harvest starting and due to bring good volumes of new crop coffees to the market for the first quarter of next year, there really is nothing much to assist to buoy market sentiment at present.  The markets and following this year’s bumper Brazil crop, presently looking at an approximate 5% surplus global coffee supply for the October 2018 to September 2019 coffee year. 

The coffee markets would really need something dramatic in the way of damaging weather to change the prevailing negative sentiment within the market but so far aside from some chance for an El Niño phenomenon to start within the Pacific Ocean, there is no indication that weather shall have any short-term influence upon sentiment.  While even if the El Niño does become reality, it would need to be severe one and bringing with it damaging weather conditions for the Pacific Rim coffee producing countries.  

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 40.53 usc/Lb., while this equates to 34.61% price discount for the London Robusta coffee market.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday; to register these stocks at 2,447,302 bags.  There were meanwhile 4,801 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 29,616 bags. 

The commodity markets had another mixed day yesterday, to see the overall macro commodity index taking something of a sideways track for the day.   The Natural Gas, Cocoa, Cotton, Orange Juice and Corn markets ended the day on a positive note and Brent Oil ended the day on a steady note, while the U.S. Oil, Sugar, Coffee, Copper, Wheat, Soybean, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.09% lower; to see this index registered at 416.89.   The day starts with the U.S. Dollar steady and trading at 1.301 to Sterling, at 1.140 to the Euro and with the dollar buying 3.726 Brazilian Real, while North Sea Oil is steady and selling at US$ 72.25 per barrel. 

The London and New York markets started the day yesterday on a very soft note, while the New York market started the day on soft note and with the markets maintaining this stance, into the early afternoon trade.  As the afternoon progressed the London market remained under pressure and with significant losses for the day, which was followed by increased selling pressure coming to the fore for the New York market.   This setting the markets for a soft day’s trade and losing not only the gains of Friday, but also some of the gains that were made during the strong rally in prices, on Thursday last week. 

The London market ended the day on a very negative note and with 89.1% of the earlier losses of the day intact, while the New York market ended the day on a negative note and with 77.6% of the earlier losses of the day intact.   This close is unlikely to inspire confidence and the failure of the markets to hold on to the somewhat unexpected gains of the previous week, might well inspire additional producer and speculative selling and one would think that the markets are due 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   1670 – 41                                             DEC    117.10 – 2.95

JAN    1688 – 41                                             MAR   121.05 – 2.80

MAR   1703 – 39                                             MAY   123.65 – 2.80

MAY   1718 – 40                                              JUL    126.15 – 2.75

JUL    1732 – 40                                              SEP    128.50 – 2.75

SEP    1747 – 39                                              DEC   131.85 – 2.75

NOV   1761 – 40                                              MAR   135.20 – 2.75

JAN    1776 – 40                                              MAY   137.30 – 2.65

MAR   1788 – 40                                              JUL    139.20 – 2.55

MAY   1808 – 32                                              SEP    140.90 – 2.55


Coffee Market Report November 05 2018

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 14.62% over the week of trade leading up to Tuesday 30th. October; to register a new net short sold position of 44,381 Lots.   This net short-sold position which is the equivalent of 12,581,817 bags has most likely been further decreased, following the period of more positive trade, that has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within this market by 78.73% during the week of trade leading up to Tuesday 30th. October; to register a net short sold position of 4,786 Lots on the day.  This net short sold position which is the equivalent of 797,667 bags has most likely been reduced further, following the period of mixed but overall more positive trade, which has since followed. 

Vietnam’s General Statistics Office has reported that the countries coffee exports for the just completed October 2017 to September 2018 coffee year, totalled approximately 29.1 million bags.  This volume underpins the view that Vietnam did indeed, experience a bumper harvest over October 2017 to January 2018, which exceeded 30 million bags.   While with the new crop in Vietnam started and due to be peaking by early December, many forecast a follow through good crop being due.  

The good Vietnam crop of mostly robusta coffees, to be joined in terms of consumer market robusta coffee supply for this new October 2018 to September 2019 coffee year, but the addition of approximately 4 million to 5 million bags of Brazil conilon robusta coffees.  Following the much improved new conilon robusta coffee crop this year, which well exceeded the approximate 11 million to 12 million bags of domestic market demand. 

Brazil celebrated their Dia de Finados (All Souls’ Day) public holiday on Friday and with new crop sellers out of the market, which along with the sentiment that came with a firmer Real, assisted for the New York market to lead the way with follow through speculative short covering buying.   The London market following the positive trend, towards a strong close for the markets for the week. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened on Friday, to register this at 41.62 usc/Lb., while this equates to 34.67% 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 3,085 bags on Friday; to register these stocks at 2,447,302 bags.  There were meanwhile a larger in number 6,734 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 24,815 bags. 

The commodity markets had a mixed day on Friday, but with the overall macro commodity index nevertheless having a day of buoyancy.   The Sugar, Cocoa, Coffee and Copper markets ended the day on a positive note, while the Oil, Cotton and Gold markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.48% higher; to see this index registered at 417.27.   The day starts with the U.S. Dollar steady and trading at 1.299 to Sterling, at 1.139 to the Euro and with the dollar buying 3.696 Brazilian Real, while North Sea Oil is tending softer and is selling at US$ 70.75 per barrel. 

The London and New York markets started the day on Friday on a positive note and with both markets taking a positive track, into the early afternoon trade.   As the afternoon progressed and with the North Americans entering the field of play, the New York market started to attract short covering buying activity and this triggering buy stops, to accentuate the gains.   Followed by a more modest increase in value for the London market, but with the New York market hitting something of a ceiling and with presumably some producer price fixation selling in play, to bounce back from the highs.  But nevertheless, heading towards firm close for the day. 

The London market ended the day on a very positive note and holding on to its gains for the day, while the New York market ended the day on a positive note and with 64.3% of the earlier gains of the day intact.   This close assists to paint a good picture for the charts, but one might expect with still negative fundamentals for the short to medium term coffee market in play, to see some degree of caution post the evidence of the much-reduced speculative net short status of the markets.   Likewise, with the post long weekend return to the market of Brazil, some concern that there might be higher volumes of price fixation hedge selling due to chase the higher values of the terminal market, which might inspire only a hesitant steady start 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   1711 + 17                                             DEC    120.05 + 2.25

JAN    1729 + 17                                             MAR   123.85 + 2.35

MAR   1742 + 18                                             MAY   126.45 + 2.40

MAY   1758 + 20                                              JUL    128.90 + 2.40

JUL    1772 + 20                                              SEP    131.25 + 2.40

SEP    1786 + 20                                              DEC   134.60 + 2.40

NOV   1801 + 20                                              MAR   137.95 + 2.40

JAN    1816 + 20                                              MAY   139.95 + 2.35

MAR   1828 + 20                                              JUL    141.75 + 2.30

MAY   1840 + 20                                              SEP    143.45 + 2.25

 


Coffee Market Report November 02 2018

The International Coffee Organisation ICO have reported that the global coffee exports for the month of September were 7.8% higher than the same month last year, at a total of 9.43 million bags.   This they report, has contributed to the global coffee exports for the just October 2017 to September 2018 coffee year to be 2% higher than the previous coffee year, at a total of 121.88 million bags. 

These exports over the past coffee year are made up from a 62.9/37.1 ration of arabica and robusta coffees, with the prevailing consumer market stocks of arabica coffees remaining relatively high.    A factor along with rising coffee supply for this new 2018/2019 coffee year, that fuels the bearish sentiment within the market. 

The National Coffee Institute in Honduras IHCAFE have reported that the countries coffee exports for the month of October were 91% higher than the same month last year, at a total of 99,509 bags.  Most of these coffees they say were related to carryover stocks from the past crop, but with the new harvest having started and many new maturing coffee trees coming into production, that they foresee that coffee exports for this new October 2018 to September 2019 coffee year shall increase by 13% to approximately 8.15 million bags. 

The National Coffee Institute in Costa Rica ICAFE have reported that the countries coffee exports for the month of October were 53% higher than the same month last year, at a total of 21,830 bags.  This rise they appropriate to sellers of presumably mostly past crop stocks, chasing the prices that came with the recovery of the reference prices of the New York market. 

The Brazil Trade Ministry have come to the fore with their preliminary coffee export figure for the month of October, which they say were 631,50219.28% bags or 19.28% higher than the same month last year, at a total of 3,275,443 bags.   One might presume that with a significantly larger new conilon robusta coffee crop this year, that much of this increase might be related to the export of these coffees which last year, were mostly absorbed by the domestic market demand. 

Meanwhile most of the main coffee districts in Brazil have reported above average rains for the month of October, which has contributed to good flowerings and cherry set.    But while it is too early to really talk numbers for the next 2019 Brazil coffee crop, there are some who say that so long as weather conditions remain normal and with regular rains for the next five to six months, that the next year’s crop might be close to a surplus supply 60 million bags.   A bearish factor if this proves to be correct, for the medium to longer term coffee market. 

Today is the Dia de Finados (All Souls’ Day) public holiday in Brazil and coming to the fore as a long weekend, which most likely already started to take some players of the field of play yesterday afternoon and shall most likely keep most internal market players out of the market for the day.  Thus, removing some of the negative effects of price fixation hedge selling from the international coffee markets, following what is reported to have already been a slow selling week on the part of the countries farmers. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 40.14 usc/Lb., while this equates to 34.07% 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 3,865 bags yesterday; to register these stocks at 2,444,217 bags.  There were meanwhile a larger in number 4,075 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 31,585 bags. 

The commodity markets encountered a softer U.S. dollar yesterday, which assisted most markets to have a day of buoyancy, to see the overall macro commodity index taking an upside track for the day.  The Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note and the Sugar market was steady for the day, while the Oil and Natural Gas markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.5% higher; to see this index registered at 415.26.  The day starts with the U.S. Dollar marginally softer and trading at 1.300 to Sterling, at 1.142 to the Euro and with the dollar buying 3.697 Brazilian Real, while North Sea Oil is tending softer and is selling at US$ 71.55 per barrel. 

The London and New York markets started the day yesterday on a modestly positive note and with both markets maintaining this stance, into the early afternoon trade.  As the afternoon progressed the New York market and with some emotional support from the softening dollar and the positive nature of the overall macro commodity index attracted speculative support and followed by the London market, with buy stops being triggered to set both markets on an upside track for the day. 

The London market ended the day on a very positive note and with 86% of the earlier gains of the day intact, while the New York market likewise ended the day on a very positive note, with 96.2% of the earlier gains of the day intact.   This close and with Brazil off the field of play for the day, might well inspire some degree of confidence, but the recovery does not come with any supportive fundamental news and one might guess the markets might only be due for a cautious steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1694 + 37                                             DEC    117.80 + 5.10

JAN    1712 + 37                                             MAR   121.50 + 5.05

MAR   1724 + 35                                             MAY   124.05 + 5.05

MAY   1738 + 35                                              JUL    126.50 + 5.10

JUL    1752 + 35                                              SEP    128.85 + 5.10

SEP    1766 + 35                                              DEC   132.20 + 5.10

NOV   1781 + 35                                              MAR   135.55 + 5.10

JAN    1796 + 35                                              MAY   137.60 + 5.05

MAR   1808 + 35                                              JUL    139.45 + 5.05

MAY   1720 + 35                                              SEP    141.20 + 5.05


Coffee Market Report November 01 2018

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 23,683 bags or 7.13% lower than the same month last year, at a total of 308,340 bags. 

This number indicates a slow start for the new October 2018 to September 2019 coffee year, following the relatively dismal 2017 to 2018 coffee year, where the Sumatran robusta coffee exports were 3,007,755 bags or 65.24% lower than the same period in the previous 2016 to 2017 coffee year, at a total of 1,602,292 bags.  But there are still eleven months to the fore and the new robusta crop due to start in the second quarter of next year, which might assist to buoy Sumatran robusta coffee exports for the second half of the present coffee year.  

There is though in terms of Indonesia a steadily growing domestic coffee consumption, which even if the new 2019 Sumatran robusta coffee crop brings to the fore improved numbers, shall absorb more of this coffee.  Thus, for the present, one cannot for the present foresee any dramatic medium to longer term increase in Indonesian robusta coffee supply for the coming year.  But with another good Vietnam robusta coffee crop starting to come to the market and an injection of four to five million bags of new crop Brazil conilon robusta coffees now available for the consumer markets, the modest supply of robusta coffee from Indonesia is not a matter of concern. 

Weather forecasts from North America and Australia continue to indicate an approximate 70% chance for a new El Niño phenomenon to develop within the Pacific Ocean, but with no indication as to how intense this possible new phenomenon might be.   With market players having to keep in mind that should this El Niño phenomenon become reality and in not too harsh a manner, that it is in fact a positive factor for rains in South East Brazil and the development of the new 2019 Brazil crop, albeit that it might bring with it some dryer weather for the Pacific rim coffee producing countries. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 36.72 usc/Lb., while this equates to 32.58% 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 8,139 bags yesterday; to register these stocks at 2,440,352 bags.  There were meanwhile a smaller in number 7,607 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 27,510 bags. 

The commodity markets had a mixed but mostly softer day of trade yesterday, to see the overall macro commodity index taking a modestly softer track for the day.   The Natural Gas, Cocoa, New York arabica Coffee, Orange Juice and Soybean ended the day on positive note and the London robusta Coffee was near to steady for the day, while the Oil, Sugar, Cotton, Copper, Corn, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.2% lower; to see this index registered at 409.14.  The day starts with the U.S. Dollar steady and trading at 1.285 to Sterling, at 1.134 to the Euro and with the dollar buying 3.722 Brazilian Real, while North Sea Oil is steady and is selling at US$ 74.55 per barrel. 

The London market started the day yesterday taking a marginally softer stance, while the New York market started the day trading around par and with the London market recovering, to see both markets trading around par for early afternoon trade.   As the afternoon progressed the London market attracted selling pressure and triggered sell stops to dip back to hit four-week lows, while the New York market maintained a degree of buoyancy.   But with the London market bouncing off the lows to recover and to end the day close to par, while the New York market ended the day on a modestly positive note. 

The London market ended the day on a near to steady note and having recovered 93.3% of the earlier losses of the day, while the New York market ended the day on a modestly positive note and with 30% of the earlier gains of the day intact.   This close does not provide much indication of direction and one might think that the markets are due for another cautious and hesitant 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   1657 – 1                                               DEC    112.70 + 0.30

JAN    1675 – 1                                               MAR   116.45 + 0.20

MAR   1689 – 3                                               MAY   119.00 + 0.25

MAY   1703 – 3                                                JUL    121.40 + 0.20

JUL    1717 – 3                                                SEP    123.75 + 0.25

SEP    1731 – 3                                                DEC   127.10 + 0.20

NOV   1746 – 2                                                MAR   130.45 + 0.25

JAN    1761 – 2                                                MAY   132.55 + 0.35

MAR   1773 – 2                                                JUL    134.40 + 0.40

MAY   1785 – 2                                                SEP    136.15 + 0.50


Coffee Market Report October 31 2018

The Ivory Coast as the largest of the West African robusta coffee producers, have reported that the countries coffee exports for the month of September were 41,500 bags or 62.68% higher than the same month last year, at a total of 107,700 bags.   This has contributed to the country’s cumulative coffee exports for the first nine months of this year, to be 273,833 bags or 47.77% higher than the same period last year, to total 847,083 bags. 

The evidence of the seemingly free flow of these Ivory Coast robusta coffees that are mostly destined for the Mediterranean rim countries and North African consumer markets, indicates that despite the softer nature of the reference prices of the London market, that there has been little in the way of internal market price resistance within the country.   With the export figures indicating that the country is well on track to meet the forecast exports for the year, in excess of one million bags. 

Meanwhile in terms of fundamental news for the coffee markets, the markets remain devoid of any supportive news.   Weather reports from all the main coffee producing countries indicate presently, no reasons for concern and with these indicating that the present surplus supply of coffee is likely to carry on for the coming year and into the follow-on October 2019 to September 2020 coffee year.   A very much frightening prospect, for coffee producers in general.   But of course, weather is often unpredictable and one never knows might come to the fore in the coming months, but for the present the lack of threat to medium to longer term global coffee production fuels bearish sentiment within the coffee market. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.38 usc/Lb., while this equates to 32.37% 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 3,358 bags yesterday; to register these stocks at 2,448,491 bags.  There were meanwhile a smaller in number 2,450 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 35,117 bags. 

The commodity markets encountered a firming U.S. dollar yesterday, to see most markets turning south later in the day and to see the overall macro commodity index taking a softer track for the day.   The Natural Gas, Cocoa and Silver markets nevertheless ended the day on positive note, while the Oil, Sugar, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Gold markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.88% lower; to see this index registered at 409.94.  The day starts with the U.S. Dollar steady and trading at 1.271 to Sterling, at 1.134 to the Euro and with the dollar buying 3.696 Brazilian Real, while North Sea Oil is tending softer and is selling at US$ 75.80 per barrel. 

The London market started the day yesterday taking a softer stance, while the New York market started the day on a modestly positive note, but with the New York market soon drifting back to trade around par and with the both markets trading hesitantly close to par, into the early afternoon trade.   As the afternoon progressed and with a firm U.S. dollar in play and with the negative influences of the softening overall macro commodity index, both markets started to come under pressure and to see the markets heading towards a softer close for the day. 

The London market ended the day on a negative note and with 61.1% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and 88.1% of the earlier losses of the day intact.   This close does not assist to paint a very good picture for the charts and with the dollar holding on to its renewed muscle, is unlikely to fuel confidence in the markets and one might think that the markets are due 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   1658 – 10                                             DEC    112.40 – 1.85

JAN    1676 – 11                                             MAR   116.25 – 1.80

MAR   1692 – 12                                             MAY   118.75 – 1.85

MAY   1706 – 12                                              JUL    121.20 – 1.80

JUL    1720 – 13                                              SEP    123.50 – 1.80

SEP    1734 – 14                                              DEC   126.90 – 1.75

NOV   1748 – 14                                              MAR   130.20 – 1.70

JAN    1763 – 12                                              MAY   132.20 – 1.70

MAR   1775 – 12                                              JUL    134.00 – 1.65

MAY   1787 – 12                                              SEP    135.65 – 1.55


Coffee Market Report October 30 2018

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 36.13% over the week of trade leading up to Tuesday 23rd. October; to register a new net short sold position of 34,730 Lots.  Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.45%, to register a net long position of 48,096 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 23.68%; to register a new net short sold position of 51,983 Lots. This net short-sold position which is the equivalent of 14,736,950 bags has most likely been once again increased, following the mixed but overall softer trade that has since followed and likewise, that of the managed money fund sector of the market. 

The Certified Arabica coffee stocks being held against the New York exchange remain dominated by the Mexican and Central American coffees and lead by high volumes of Honduras coffees, with this producer bloc accounting for 77.9% of the stocks.  Followed by Peru, who account for 12.4% of the stocks and with the balance made up from minimal quantities of Brazil, Burundi, Colombia, India, Papua New Guinea, Rwanda and Uganda coffees. 

While in terms of storage of these certified arabica coffee stocks, the European warehouses of the exchange in Antwerp, Barcelona, Bremen and Hamburg and dominated by the high volume being held in Antwerp, are holding close to 84% of the stocks.   With these European based warehouses likewise, accounting for over 99% of the coffees pending grading for the exchange. 

These Certified coffee stocks which increased by 58.48% during 2017, have increased by a further 23.89% during the first ten months of this year.   While with another follow on good new coffee crop due for the Mexican and Central American producer bloc, one might anticipate that these stocks shall further increase by the end of the year and through the coming year.   A factor that shall most likely, further contribute towards short to medium term bearish sentiment for the New York market. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 37.73 usc/Lb., while this equates to 33.02% 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 4,469 bags yesterday; to register these stocks at 2,445,133 bags.  There were meanwhile a larger in number 7,830 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 37,567 bags. 

The commodity markets encountered some renewed muscle for the Dollar yesterday, to see most markets turning south later in the day and to see the overall macro commodity index taking a softer track for the day.   The Orange Juice and Wheat markets nevertheless ended the day on positive note, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Corn, Soybean, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.84% lower; to see this index registered at 413.58.  The day starts with the U.S. Dollar near to steady and trading at 1.280 to Sterling, at 1.138 to the Euro and with the dollar buying 3.717 Brazilian Real, while North Sea Oil is showing a degree of buoyancy and is selling at US$ 77.70 per barrel. 

The London market started the day yesterday taking a softer stance, while the New York market and with a firm Brazil real in play, started the day on a positive note and with the London market soon recovering, to see both markets taking a positive track into the early afternoon trade.   As the afternoon progressed the markets added value and triggering buy stops, to accentuate the gains in New York.  This was however short lived and in line with the negative nature of the overall macro commodity index, the firming of the dollar to the real and producer price fixation sell stops in play, both markets slipped back into positive territory and with some speculative short selling adding to the pressure, both markets proceed to take a steady track south for the rest of the day’s trade. 

The London market ended the day on a negative note and with 78.2% of the earlier losses of the day intact, while the New York market ended the day on a very negative note and 94.7% of the earlier losses of the day intact.   This close does not assist to paint a very good picture for the charts, but one might think that following the sharp reversal in the fortunes for the markets yesterday, that there might be a degree of caution and a hesitantly 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   1668 – 43                                             DEC    114.25 – 5.40

JAN    1687 – 43                                             MAR   118.05 – 5.35

MAR   1704 – 39                                             MAY   120.60 – 5.35

MAY   1718 – 39                                              JUL    123.00 – 5.35

JUL    1733 – 38                                              SEP    125.30 – 5.35

SEP    1748 – 37                                              DEC   128.65 – 5.30

NOV   1762 – 37                                              MAR   131.90 – 5.25

JAN    1775 – 38                                              MAY   133.90 – 5.15

MAR   1787 – 40                                              JUL    135.65 – 5.05

MAY   1799 – 40                                              SEP    137.20 – 5.05


Coffee Market Report October 29 2018

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 23.68% over the week of trade leading up to Tuesday 23rd. October; to register a new net short sold position of 51,983 Lots.   This net short-sold position which is the equivalent of 14,736,950 bags has most likely been little changed to perhaps marginally increased, following the period of mixed but overall slightly softer trade, that has since followed. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within this market by 36.04% during the week of trade leading up to Tuesday 23rd. October; to register a net short sold position of 7,811 Lots on the day.  This net short sold position which is the equivalent of 1,301,833 bags has most likely been reduced further, following the period of mixed but overall more positive trade, which has since followed. 

With the speculative sectors of the coffee markets having more than halved their net short sold positions within the coffee markets and with the fundamental of an over 5% surplus global coffee supply for the coming months, it is difficult to imagine that the funds shall continue to short cover their positions within the coffee markets.  Particularly so with the pending surge in new crop coffee supply that is due from Mexico, Central America, Colombia and Vietnam, which with consumer industries well covered at the recent lows of the coffee markets, that these new crop coffees are likely to bring with them the negative impact of price fixation hedge selling pressure.

 The General Statistics Office in Vietnam have with the month of October ending, have estimated that the countries coffee exports for the first ten months of this year, shall be approximately 21.5% higher than the same period last year, at a total of approximately 26.28 million bags.    These exports which they indicate brought in 2.98 billion U.S. Dollars, having contributed towards 6.72% of the countries impressive 200.3 billion U.S. Dollars of exports over this ten-month period, with an estimated trade surplus for the period of approximately 6.4 billion U.S. dollars. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 41.18 usc/Lb., while this equates to 34.42% 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 2,586 bags on Friday; to register these stocks at 2,440,664 bags.  There were meanwhile a larger in number 6,211 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 45,397 bags. 

The commodity markets encountered a softening U.S. Dollar on Friday and to seem many markets having a day of buoyancy, to see the overall macro commodity index taking an upside track for the day.   The Oil, Cocoa, London robusta Coffee, Cotton, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Natural Gas, Sugar, New York arabica Coffee, Copper and Orange Juice markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.58% higher; to see this index registered at 417.09.  The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.283 to Sterling, at 1.139 to the Euro and with the dollar buying 3.643 Brazilian Real, while North Sea Oil is steady and is selling at US$ 77.80 per barrel. 

The London and New York markets started the day on a modestly positive note on Friday and with both markets taking a positive track, into the early afternoon trade.   As the afternoon progressed though, the New York market started to come under pressure and slipped back into negative territory, while the London market held on to its gains and set the markets for a mixed close for the day.  

The London market ended the day on a positive note and with 92% of the earlier gains of the day intact, while the New York market ended the day on a negative note and 78.9% of the earlier losses of the day intact.   This close and with the evidence of the sharply lower net short sold positions within the coffee markets is not likely to inspire confidence, but some might see the firmer post-election Brazil Real to be a factor that shall dampen Brazil price fixation selling pressure.  However, this latter factor might also bring to the fore some incentive for selling into what is still in terms of the recent market values, a relatively firm New York market.   Thus with mixed signals coming to the coffee markets, one might expect a degree of hesitancy due for early trade today against the prices set yesterday, as follows: 

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

NOV   1711 + 37                                             DEC    119.65 – 1.50

JAN    1730 + 23                                             MAR   123.40 – 1.65

MAR   1743 + 18                                             MAY   125.95 – 1.65

MAY   1757 + 17                                              JUL    128.35 – 1.65

JUL    1771 + 16                                              SEP    130.65 – 1.65

SEP    1785 + 16                                              DEC   133.95 – 1.65

NOV   1799 + 15                                              MAR   137.15 – 1.65

JAN    1813 + 14                                              MAY   139.05 – 1.70

MAR   1827 + 14                                              JUL    140.70 – 1.75

MAY   1839 + 14                                              SEP    142.25 – 1.80


Coffee Market Report October 26 2018

The weather reports from Brazil continue to come to fore with good rainfall reports for all of the major coffee districts in the country, which has with the generally good rains through the month, assisted to set the flowerings for the next 2019 coffee crop.   This albeit still early days in terms of the October to March rain season, is making many speculate that the country and despite biennial bearing factors, due for a good and possibly surplus follow on coffee crop for next year. 

There is some degree of focus upon this coming weekend run off Presidential Elections in Brazil and with the polls continuing to indicate that what is foreseen to be the economically friendly Jair Bolsonaro is the favourite to win, the Brazil real continues to hold on to its firmer stance.   But with the advantage of a 30% increase in the reference prices of the New York arabica coffee market, this has seemingly not slowed internal market selling activity for new crop Brazil arabica coffees.   Reports do indicate though, that the internal market sales of new crop conilon robusta coffees are reflecting some degree of price resistance, which is resulting in only modest volumes of trade. 

The Coffee Board of India and the various coffee farmers associations in India have continue to report that due to the overly severe monsoon rains earlier this year, that there shall be a significant reduction in the new coffee crop potential for the country.  But one of the major players within the Indian Coffee Industry Tata Coffee Limited has been reported on Reuters, to say that they do not expect a significant impact from these rains. 

It is nevertheless in terms of market sentiment an irrelevant factor as even if the Indian coffee crop is lower and exports likewise lower, the potential dip in coffee supply from India is dwarfed by the evidence of a significant global coffee supply for this new October 2018 to September 2019 coffee year.   But it shall of course prove to be a matter of concern for the select consumer industry players, who provide dedicated support for some of the unique speciality Indian coffee grades.  

The new crop in Vietnam has started and is reported to be presently modest in volume, but is expected to start to peak by the second half of next month.  Meanwhile, with the internal market in Vietnam is reported to remain active, despite the softer nature of the reference prices of the London market.   Thus and with the added contribution of increased conilon robusta coffee supply post the significantly larger new Brazil crop this year, there is a steady flow of robusta coffees foreseen for the consumer market industries.

 The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 43.72 usc/Lb., while this equates to 36.09% 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 2,630 bags yesterday; to register these stocks at 2,438,078 bags.  There were meanwhile a larger in number 7,896 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 51,608 bags. 

The commodity markets had a mixed day yesterday, to see the overall macro commodity index taking something of a sideways track for the day.  The Oil, Natural Gas, Cocoa, New York arabica Coffee, Cotton and Gold markets ended the day on a positive note and the Copper market on a close to steady note, while the Sugar, London robusta Coffee, Orange Juice, Wheat, Corn, Soybean and Silver markets ended the day on a softer note.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% lower; to see this index registered at 414.69.  The day starts with the U.S. Dollar steady and trading at 1.281 to Sterling, at 1.137 to the Euro and with the dollar buying 3.706 Brazilian Real, while North Sea Oil is tending softer and is selling at US$ 76.45 per barrel. 

The London and New York markets both started the day yesterday on a softer note, but with both markets soon attracting support and moving up into positive territory.  It was however something of a roller coaster day for the markets and with the London market in particular coming under producer price fixation selling pressure, to see both markets experiencing an erratic day’s trade.   This with the London market mostly trading on the negative side of par, while the New York market and with speculative short covering support in play, trading mostly to the north of par.   

The London market ended the day on a negative note and with 52.6% of the earlier losses of the day intact, while the New York market ended the day on a positive note and 31.6% of the earlier gains of the day intact.   This close and with a softer London and along with the New York market only able to hold on to a modest percentage of the gains of the day, does not provide a strong signal.   Making one think that the markets shall be due for only a hesitant 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   1674 – 14                                             DEC    121,15 + 0.90

JAN    1707 – 10                                             MAR   125.05 + 1.00

MAR   1725 – 9                                               MAY   127.60 + 0.95

MAY   1740 – 10                                              JUL    130.00 + 1.00

JUL    1755 – 9                                                SEP    132.30 + 1.00

SEP    1769 – 9                                                DEC   135.60 + 1.05

NOV   1784 – 8                                                MAR   138.80 + 1.00

JAN    1799 – 6                                                MAY   140.75 + 1.00

MAR   1813 – 6                                                JUL    142.45 + 1.00

MAY   1825 – 6                                                SEP    144.05 + 1.00

 


Coffee Market Report October 25 2018

25th October, 2018.
The Uganda Coffee Development Authority, UCDA has reported that the countries coffee exports for the month of September, reached a total 293,199 bags, or 14.2% lower than the same month last year. This has contributed to the country’s cumulative coffee exports for the twelve months of the October 2017 to September 2018 coffee year at 4,304,121 bags or 6.87% lower than the same period in the previous coffee year.

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 42.37 usc/Lb., while this equates to 35.23% 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 3,128 bags yesterday; to register these stocks at 2,435,448 bags. The bags pending grading for the exchange, registered a decrease by 13,055 bags; to register these pending grading stocks at 59,504 bags.

The commodity markets encountered a firmer US Dollar yesterday, with a mixed day on the markets influenced by uncertainty over the weaker economic indicators out of Italy, unresolved Brexit political wrangling and volatility in the Oil markets in the wake of the intense media focus on Saudi Arabia. It was a softer day for the Oil markets, along with a softer day for Cocoa, Coffee, Copper, Wheat, Corn and Soybean markets, Gold, Silver, Palladium and Platinum all lower on the day, with Sugar and Orange Juice in positive territory. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets settled lower by 0.1958%; to register this index at 414.87. The day starts with the U.S. Dollar steady and trading at 1.289 to Sterling, at 1.141 to the Euro and with the Dollar buying 3.732 Brazilian Real, while North Sea Oil is steady and is selling at US$ 76.19 per barrel.

The London coffee market opened the day on a mildly positive note yesterday, followed by a marginally softer opening in New York and a steady early morning session in modest volume. New York registered an incremental recovery ahead of the business day opening and the Brazil Real lost traction against the the Greenback, the New York arabica market, slipped back to around par. London Robusta maintained a positive stance just above the days’ opening levels. The market in New York, met with additional speculative buying activity as the day progressed to see this market gradually touch on the highs of the day in the latter half of the session, matched with sellers and a softer track as the day drew to a close. The volume of trade in New York registered a hefty 48,046 lots traded in the two front months, whereas a more modest session in volume and range terms in London, saw this market finish the day hardly changed. The markets set the close yesterday, in mildly softer territory as follows:

London Robusta US$/MT New York Arabica Usc/Lb.

NOV   1,688 - 5               DEC  120.25 - 0.85
JAN    1,717 - 2               MAR  124.05 - 0.80
MAR   1,734 - 2               MAY  126.65 - 0.75
MAY    1,750 - 1              JULY  129.00 - 0.75
JULY   1,764 - 1              SEPT 131.30 - 0.70
SEPT  1,778 - 1              DEC  134.55 - 0.75
NOV   1,792 - 1              MAR  137.80 - 0.75
JAN    1,805 - 1              MAY  139.75 - 0.75
MAR   1,819 - 1              JULY 141.45 - 0.75
MAY    1,831 - 1             SEPT 143.05 - 0.70

Coffee Market Report October 25 2018

24th October, 2018.
The January 2019 to December 2018 contracts arbitrage between the London and New York markets widened yesterday, to register this at 43.13 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 increase by 2,270 bags yesterday; to register these stocks at 2,432,320 bags. The bags pending grading for the exchange, registered an increase by 2,662 bags pending grading for this exchange; to register these pending grading stocks at 72,559 bags.

It was a mixed day in the commodity markets yesterday, as Oil futures absorbed some of the brunt of the political discomfort that has arisen between Saudi Arabia and USA. The US Dollar lost some ground on the day and the Euro, posted a mild recovery. It was a softer day for the Oil markets, Cocoa, Cotton, Copper, Orange Juice, Sugar, Soybean, although the rest of the board managed to finish in mostly steady or positive territory, Corn, Wheat, Sugar, Coffee, Gold, Silver, Platinum and Palladium all positive on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is hardly changed; to see this index registered at 415.69. The day starts with the U.S. Dollar steady and trading at 1.298 to Sterling, at 1.146 to the Euro and with the Dollar buying 3.694 Brazilian Real, while North Sea Oil is steady and is selling at US$ 77.82 per barrel.

The London coffee market opened the day on a softer note yesterday, followed by a similarly softer opening in New York, to see both markets on a lower track in the morning session. The business day opened in the America’s with an upward progression in New York, to see this market recover the losses of the morning session, through par, into positive territory, London remained steady in negative territory. A push lower in New York settled the market within rangebound territory by midsession, while London tread in a softer range. The latter half of the day saw another positive push in New York as the day progressed into the second half of the session to trigger stops along the way and track rapidly upward in New York with London following to recover from losses and move back through par. The upward momentum quickly built in New York supported by fresh and heavy volume of trade, to see this market settle on the day, at the high. The performance in London, was more muted volume terms and this market finished the day, just below par having regained lost ground during the session, to set the markets close yesterday, as follows:

London Robusta US$/MT New York Arabica Usc/Lb.

NOV   1,693 - 3                 DEC  121.10 + 3.45
JAN    1,719 - 2                 MAR  124.85 + 3.40
MAR   1,736 - 1                 MAY  127.40 + 3.40
MAY   1,751 - 1                 JULY  129.75 + 3.40
JULY  1,765 - 1                 SEPT 132.00 + 3.40
SEPT 1,779 - 1                 DEC   135.30 + 3.35
NOV   1,793 - 1                 MAR  138.55 + 3.35
JAN    1,806 - 1                 MAY  140.50 + 3.35
MAR   1,820 - 1                 JULY 142.20 + 3.35
MAY   1,832 - 1                 SEPT 143.75 + 3.25

Coffee Market Report October 23 2018

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 30.11% over the week of trade leading up to Tuesday 16th. October; to register a new net short sold position of 54,378 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.17%, to register a net long position of 47,407 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 21.05%, to register a net short sold position of 68,110 Lots. This net short sold position which is the equivalent of 19,308,883 bags has most likely been further reduced, following the period of overall positive trade that has since followed and likewise, that of the managed money fund sector of the market.

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 39.59 usc/Lb., while this equates to 33.65% 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 3,542 bags on Friday; to register these stocks at 2,430,050 bags. The bags pending grading for the exchange, registered a decrease by 6,759 bags pending grading for this exchange; to register these pending grading stocks at 69,897 bags.

The commodity markets experienced a mixed day yesterday, the news of China’s stated commitment to provide support to industries affected by the recent trade tariff imposition, provided a boost in certain sectors, while separately the Euro slipped and the US Dollar gained ground on the day. It was a steady day for the Oil markets, and a positive close for Cocoa, Cotton, Corn, Soybean, Copper and Palladium markets. It was a lower day for Sugar, Coffee, Orange Juice, Wheat, Gold, Silver and Platinum markets on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1354% lower; to see this index registered at 415.71. The day starts with the U.S. Dollar steady and trading at 1.295 to Sterling, at 1.145 to the Euro and with the Dollar buying 3.684 Brazilian Real, while North Sea Oil is steady and is selling at US$ 80.33 per barrel.

The London market opened the day on a mildly positive note yesterday, while New York took a softer track at the outset. By midsession both markets had lost further ground, trading on a softer note in comparatively light volume. The later day session saw a degree of buoyancy return as the Brazil Real posted a firmer day and origin selling activity withdrew from the floor and both markets moved upward, towards par, to recover most of the losses incurred. The volumes in both markets still relatively subdued however and in a somewhat technically driven day, selling pressure returned to register a further push southward and as the session drew to a close, the markets took a softer turn once more, to break through the previous floor and set lower levels on the close. The markets finished the day yesterday on a softer note and set the close, after a fair volume day, slightly above the days’ low registered in London and on the days’ lows in New York, as follows:

London Robusta US$/MT   New York Arabica Usc/Lb.

NOV     1,696 - 21             DEC  117.65 - 4.45
JAN      1,721 - 18             MAR  121.45 - 4.45
MAR     1,737 - 17             MAY  124.00 - 4.40
MAY     1,752 - 17             JULY  126.35 - 4.40
JULY    1,766 - 17             SEPT 128.60 - 4.40
SEPT   1,780 - 17             DEC   131.95 - 4.40
NOV     1,794 - 17             MAR  135.20 - 4.40
JAN     1,807 - 16             MAY   1 37.15 - 4.40
MAR    1,821 - 16             JULY  138.85 - 4.35
MAY     1,833 - 16            SEPT  140.50 - 4.35


Coffee Market Report October 22 2018

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 21.05% over the week of trade leading up to Tuesday 16th. October; to register a new net short sold position of 68,110 Lots.   This net short-sold position which is the equivalent of 19,308,883 bags has most likely been reduced further, following the sharp positive correction for the market at the end of last week. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within this market by 35.75% during the week of trade leading up to Tuesday 16th. October; to register a net short sold position of 12,212 Lots on the day.  This net short sold position which is the equivalent of 2,035,333 bags has most likely been increased a bit, following the period of mixed but overall softer trade, which has since followed. 

The evidence of the much-reduced speculative net short sold position within the New York market which has likely to have been further reduced and while the coffee fundamentals point towards and approximate 5% surplus global coffee supply, is likely to be a factor of concern for producers and might well bring to the market some volumes of producer price fixation selling.   Perhaps further inspired in terms of the arabica coffee producers, by the evidence of the rising levels of certified arabica coffee stocks that are held against the New York market. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened on Friday, to register this at 46.62 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 2,165 bags on Friday; to register these stocks at 2,426,508 bags.  There were meanwhile a larger in number 8,787 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 76,656 bags. 

The commodity markets experienced some degree of buoyancy in trade on Friday, to see the overall commodity index having a steady day.  The Oil, Sugar, Cocoa and Copper markets ended the day on a positive note and the New York arabica coffee and Gold markets ended the day on a steady note, while the London robusta Coffee and Cotton markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.01% higher; to see this index registered at 416.27.  The day starts with the U.S. Dollar steady and trading at 1.307 to Sterling, at 1.151 to the Euro and with the dollar buying 3.714 Brazilian Real, while North Sea Oil is steady and is selling at US$ 80.35 per barrel. 

The London and New York markets both started the day on Friday trading on a softer note, but with the New York market soon moving up to trade around par, to see the markets entering the afternoon trade with a softer London market and a steady New York market.   As the afternoon progressed the New York market moved up into positive territory, while the London market started to move deeper into negative territory.  The London market continued to come under pressure and towards a soft close, while the New York market remained mostly steady for the day. 

The London market ended the day on a very negative note and with 83.7% of the earlier losses of the day intact, while the New York market ended the day on a steady note and with only 1.4% of the earlier gains of the day intact.   This close and with a softer London and along with the evidence of a more modest net short sold scenario within the New York market is unlikely to inspire confidence and thus, to set the markets for little better than 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   1717 – 39                                             DEC    122.10 + 0.05

JAN    1739 – 36                                             MAR   125.90 + 0.05

MAR   1754 – 35                                             MAY   128.40 + 0.05

MAY   1769 – 34                                              JUL    130.75 + 0.05

JUL    1783 – 35                                              SEP    133.00 + 0.05

SEP    1797 – 36                                              DEC   136.35 + 0.10

NOV   1811 – 37                                              MAR   139.60 + 0.10

JAN    1823 – 38                                              MAY   141.55 + 0.05

MAR   1837 – 38                                              JUL    143.20 unch

MAY   1849 – 38                                              SEP    144.85 + 0.05


Coffee Market Report October 19 2018

The reports from Brail indicate that the main arabica coffee districts in South East Brazil have been in receipt of good rains over the recent days and while it is likely to remain mostly dry for the next few days, that more rains are due for the latter half of next week.   This has assisted to raise the ground water retention levels and to assist with the setting of the flowers for the next 2019 crop which albeit likely to suffer a little from biennial bearing factors, is looking to be a good crop.  

It is however still early days and with the Brazil coffee farms requiring regular and good rains through to March next year, in order to support a good 2019 crop.  But so far there have been no long-range weather forecasts that indicate anything other than normal weather conditions for South East Brazil, which with fair weather over all the main coffee producing countries, presently indicates that global coffee supply shall remain in surplus for quite some time to come. 

Meanwhile with the polls favouring the right wing and economic friendly Jair Bolsonaro to win the Brazil presidential runoff election on the 27th. of this month, the Brazil Real is remaining firm.   However, with the reference prices of the international coffee terminal markets having firmed, it is reported that there remains active internal market trade of new crop coffees. 

 It is reported that the rain season in Vietnam is now tailing off and thus triggering more active new crop coffee harvesting activity, which is likely to start peaking in five to seven weeks’ time.  Albeit that the weather forecasts are for occasional showers and thunder showers, which shall from time to time, interrupt the harvest activity.   But with another large crop forecast, there is likely to be good volumes of new crop and mostly robusta coffees starting to flow into Ho Chi Minh City, by early December. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.54 usc/Lb., while this equates to 34.04% 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 941 bags yesterday; to register these stocks at 2,424,343 bags.  There were meanwhile a larger in number 15,240 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 67,869 bags. 

The commodity markets experienced something of a down day yesterday and with many markets coming under pressure, to see the overall macro commodity index taking a softer track for the day.   The Sugar, Cotton and Gold markets nevertheless ended the day on a positive note and the London robusta Coffee and Orange Juice markets on a relatively steady note, while the Oil, Natural Gas, Cocoa, Copper, Wheat, Corn, Soybean and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.07% lower; to see this index registered at 416.25.   The day starts with the U.S. Dollar steady and trading at 1.302 to Sterling, at 1.146 to the Euro and with the dollar buying 3.721 Brazilian Real, while North Sea Oil is showing some degree of early buoyancy and is selling at US$ 80.15 per barrel. 

The London and New York markets both started the day yesterday trading around par, but with both markets attracting support and moving into modest positive territory and with the New York market adding additional value, before both markets faltered and entered the early afternoon trade with prices close to par.   As the afternoon progressed the market took an erratic track and even a short sharp dip into negative territory with both markets mostly trading either side of par and on a somewhat sideways track, with the New York market particularly erratic in nature and heading towards a modestly softer end for the day. 

The London market ended the day on a near to steady note and having recovered 95.8% of the earlier losses of the day, while the New York market ended the day on a negative note, but having recovered 71.4% of the earlier losses of the day.    This close with both markets looking a little toppy for the day, provides little indication of direction   This makes one speculate that the inability for the markets to sustain their recent rally and with the oversupply coffee fundamentals clearly evident and with the funds having already done good volumes of short covering buying, that the chances are that producer price fixation selling shall play a part and set the markets 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   1756 + 1                                               DEC    122.05 – 0.50

JAN    1775 – 1                                               MAR   125.85 – 0.40

MAR   1789 unch                                            MAY   128.35 – 0.35

MAY   1803 – 1                                                JUL    130.70 – 0.35

JUL    1818 unch                                            SEP    132.95 – 0.35

SEP    1833 unch                                            DEC   136.25 – 0.35

NOV   1848 + 2                                                MAR   139.50 – 0.35

JAN    1861 + 3                                                MAY   141.50 – 0.30

MAR   1875 + 3                                                JUL    143.20 – 0.25

MAY   1887 + 3                                                SEP    144.80 – 0.25


Coffee Market Report October 18 2018

The steadily strengthening Brazil Real has continued to inspire sentiment within the New York market, with good volumes of speculative short covering coming to the fore.  This resulting in the market ticking a four-month high in trade yesterday, with the managed money funds and speculative sectors of the market most likely to have significantly reduced their short-sold positions within this volatile market.   

One might comment though that while the firmer Brazil Real might result in internal market price resistance within Brazil, the rising value of the reference prices of the New York market is assisting to allow for exporters to pay up and offer similar prices that were previously considered acceptable to the arabica coffee farmers.  Thus, suggesting that the firmer Real might not slow the volumes of Brazil sales and exports. 

Meanwhile soon to be hanging over the New York market in the coming months and aside from Brazil, shall be large volumes of new main crop Colombian coffees and along with the new Mexican and Central American coffee crops.   These coffees unless the speculative funds find reason not to remain short within this market, most likely to increase the volumes of price fixation hedge selling and to create something of a price ceiling for the market. 

With a large middle class within China and many of whom are turning towards western culture, there is a steadily growing coffee market within the country.   As there is a steadily increasing coffee farming community, within the South East of the country and with coffee production rising towards 2 million bags per annum.  This is being highlighted by the forthcoming 2018 Asian Coffee Annual Conference that is scheduled to take place over the 11th. and 12th. November, in Mangshi City, Yunnan Province. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 41.99 usc/Lb., while this equates to 34.26% 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 2,280 bags yesterday; to register these stocks at 2,425,284 bags.  There were meanwhile a larger in number 4,221 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 52,629 bags. 

The commodity markets experienced a mixed day yesterday, but with many markets softening, to see the overall macro commodity index tending softer for the day.   The Natural Gas, Sugar, Cocoa, Coffee and Soybean markets ended the day on a positive note, while the Oil, Cotton Copper, Wheat, Corn, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.03% lower; to see this index registered at 420.76.   The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.309 to Sterling, at 1.149 to the Euro and with the dollar buying 3.687 Brazilian Real, while North Sea Oil is tending softer and is selling at US$ 80.00 per barrel. 

The London and New York markets both started the day yesterday on a negative note, but this was short lived for the New York market that soon started to attract support and to move up into modest positive territory and to see the markets taking a mixed stance, into the early afternoon trade.   As the afternoon progressed the New York market started to attract more support and with high volumes of buy stops being triggered to add unexpected significant value to the market, which was followed by a recovery into positive territory for the London market.    Both markets managing to retain most of the gains of the day by the close, with gains within the New York market being particularly impressive. 

The London market ended the day on a positive note and with 80.8% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 93.3% of the earlier gains of the day intact.   This positive close that comes despite negative fundamentals and a robust U.S. Dollar, assists to paint a positive picture for the charts and is constructive for the market.  But with many confused by the somewhat unexpected rally within the markets, one might expect to see the markets set for a cautious and hesitant start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1755 + 11                                             DEC    122.55 + 4.90

JAN    1776 + 21                                             MAR   126.25 + 4.95

MAR   1789 + 20                                             MAY   128.70 + 5.00

MAY   1804 + 21                                              JUL    131.30 + 4.95

JUL    1818 + 21                                              SEP    133.30 + 4.95

SEP    1833 + 20                                              DEC   136.60 + 4.95

NOV   1846 + 21                                              MAR   139.85 + 4.95

JAN    1858 + 21                                              MAY   141.80 + 4.90

MAR   1872 + 21                                              JUL    143.45 + 4.85

MAY   1884 + 21                                              SEP    145.05 + 4.80


Coffee Market Report October 17 2018

The mostly short covering rally within the New York market and with the perspective on the part of many that the with the prevailing negative coffee fundamentals that the market was oversold, stalled in trade yesterday.  One would think though that with the dismal prices of late that the market has been dictating for the arabica coffee farmers, that producer price fixation selling also played a part in the pressure upon the market. 

Good weather conditions for most of the main coffee districts in Brazil and the early perspective that this shall contribute towards a reasonable 2019 crop for Brazil, is also contributing towards negative sentiment.  Which has already been fuelled by the bumper new crop in Brazil this year, which with good Mexican, Central American and Vietnam crops on the horizon, is bringing to the fore estimates for an over 8 million bags surplus coffee supply for this new October 2018 to September 2019 coffee year. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 38.04 usc/Lb., while this equates to 32.33% 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 720 bags yesterday; to register these stocks at 2,423,004 bags.  There were meanwhile a larger in number 3,335 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 56,850 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 17,333 bags or 1.2% over the week of trade leading up to Monday 15th., to see these stocks registered at 1,467,333 bags. 

The commodity markets experienced a mixed day yesterday, but with many markets softening, to see the overall macro commodity index taking a softer track for the day.   The Oil, Natural Gas, Cocoa, London robusta Coffee and Orange Juice markets ended the day on a positive note, while the Sugar, New York arabica Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.1% lower; to see this index registered at 420.87.   The day starts with the U.S. Dollar steady and trading at 1.318 to Sterling, at 1.156 to the Euro and with the dollar buying 3.725 Brazilian Real, while North Sea Oil is steady and is selling at US$ 81.40 per barrel. 

The London and New York markets started the day yesterday on a positive note and the New York market started the day around par, but with the both markets slipping back into negative territory, for the early afternoon trade.  As the afternoon progressed both markets moved back to trade around par and while the London market then moved back up into positive territory, the New York market started to come under selling pressure and moved back into negative territory.   

The London market ended the day on a modestly positive note and with 30% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 66.7% of the earlier losses of the day intact.   This close and the reversal of the fortunes of the New York market is likely to dent confidence and bring to the fore a degree of caution, to perhaps set the market for only a hesitant 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   1744 + 6                                               DEC    117.65 – 1.70

JAN    1755 + 3                                               MAR   121.30 – 1.65

MAR   1769 + 2                                               MAY   123.70 – 1.65

MAY   1783 + 3                                                JUL    126.10 – 1.60

JUL    1797 + 6                                                SEP    128.35 – 1.65

SEP    1813 + 10                                              DEC   131.65 – 1.60

NOV   1825 + 10                                              MAR   134.90 – 1.55

JAN    1837 + 10                                              MAY   136.90 – 1.60

MAR   1851 + 10                                              JUL    138.60 – 1.65

MAY   1863 + 10                                              SEP    140.25 – 1.65


Coffee Market Report October 16 2018

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 16.48% over the week of trade leading up to Tuesday 9th. October; to register a new net short sold position of 77,800 Lots.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.4%, to register a net long position of 45,949 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 11.23%, to register a net short sold position of 86,266 Lots.  This net short sold position which is the equivalent of 24,456,029 bags has most likely been further reduced, following the period of overall positive 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 224,641 bags or 3.37% during the month of September, to register these stocks at 6,438,220 bags at the end of the month.   The overall Green Coffee stocks reported, 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 570,000 bags per week, would conservatively have been at least 1.1 million bags. 

Suggesting that if one is to consider the additional unreported stocks the end month stocks, this would equate to more than thirteen weeks of roasting activity, which most would consider to be a very safe reserve.    Especially so ahead of the pending deliveries from large new Mexican and Central American crop, a new Colombian main crop, a large new Vietnam crop and the ongoing surge of new crop deliveries from Brazil. 

Thus, it is somewhat surprising with no one arguing the fact that there shall be global coffee surplus supply for the coming year, that the market correction has been sustained for some days.  But it is related to speculative short covering and one might think that with the equity markets losing their lustre in the recent days, that it is more a matter of moving money and reducing what was a historic over sold position within the New York market.   Making one think that the markets with pending increased volumes of producer price fixation selling on the horizon, that the markets might already be looking towards a nearby ceiling. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 39.88 usc/Lb., while this equates to 33.41% 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 525 bags yesterday; to register these stocks at 2,423,724 bags.  There were meanwhile a larger in number 5,435 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 60,185 bags. 

The commodity markets experienced a slightly softer U.S. dollar and had an overall positive day yesterday, to see the overall macro commodity index on an upside track for the day.  The Oil, Natural Gas, Sugar, Coffee, Cotton, Orange Juice, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a positive note, while the Cocoa and Copper markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.9% higher; to see this index registered at 421.28.   The day starts with the U.S. Dollar steady and trading at 1.315 to Sterling, at 1.158 to the Euro and with the dollar buying 3.735 Brazilian Real, while North Sea Oil is steady and is selling at US$ 81.15 per barrel. 

The London and New York markets started the day yesterday on a positive note and with both markets maintaining a positive track, into the early afternoon trade.  As the afternoon progressed the New York market and with some support coming from the positive nature of the overall macro commodity index, started to attract higher volumes of short covering buying, with buy stops being triggered, to accentuate the gains.  This was followed by increased support and added value for the London market, to see both markets moving on towards a relatively strong end to the day. 

The London market ended the day on a positive note and with 87% of the earlier gains of the day intact, while the New York market started the day on a likewise positive note and with 88.9% of the earlier gains of the day intact.   This close further assists to paint a positive picture for the charts, but is not accompanied by any supportive fundamental news.  Thus, aside from a firmer Brazil Real that is anyhow now countered by higher terminal market prices to provide emotive support, it is difficult to have too much confidence in a steady upside track, which might start to bring to the fore some degree of caution and perhaps only a steady start due for early trade today, against the prices set yesterday, as follows: 

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

NOV   1738 + 25                                             DEC    119.35 + 2.80

JAN    1752 + 27                                             MAR   122.95 + 2.85

MAR   1767 + 26                                             MAY   125.35 + 2.85

MAY   1780 + 26                                              JUL    127.70 + 2.85

JUL    1791 + 25                                              SEP    130.00 + 2.80

SEP    1803 + 24                                              DEC   133.25 + 2.75

NOV   1815 + 23                                              MAR   136.45 + 2.70

JAN    1827 + 21                                              MAY   138.50 + 2.70

MAR   1841 + 19                                              JUL    140.25 + 2.65

MAY   1853 + 19                                              SEP    141.90 + 2.55


Coffee Market Report October 15 2018

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 11.23% over the week of trade leading up to Tuesday 9th. October; to register a new net short sold position of 86,266 Lots.   This net short-sold position which is the equivalent of 24,456,029 bags has most likely been reduced further, following the sharp positive correction for the market at the end of last week. 

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative Managed Money sector of this market decrease their net short sold position within this market by 39.55% during the week of trade leading up to Tuesday 9th. October; to register a net short sold position of 19,007 Lots on the day.  This net short sold position which is the equivalent of 3,167,833 bags has most likely been reduced further, following the period of more positive trade, which has since followed. 

The World Coffee Producers Forum that includes over thirty coffee producing countries, is reported to have sent a letter to a number of leading consumer market industries, to voice their concern over the soft nature of the international coffee prices.   The World Coffee Producers Form note that in excess of twenty-five million families globally are suffering from the negative effects of the soft coffee prices, but one would comment that there really noting that the industries can do to control the activities of the speculative funds, who are the main cause for the softer coffee market prices. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened on Friday, to register this at 38.31 usc/Lb., while this equates to 32.87% 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 3,645 bags on Friday; to register these stocks at 2,424,249 bags.  There were meanwhile a larger in number 8,047 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 65,624 bags. 

The commodity markets experienced an overall positive day on Friday, to see the overall macro commodity index on an upside track for the day.  The Oil, Sugar, Cocoa, Coffee, Cotton and Copper markets ended the day on a positive note, while the Gold market ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.61% higher; to see this index registered at 417.54.   The day starts with the U.S. Dollar steady and trading at 1.313 to Sterling, at 1.155 to the Euro and with the dollar buying 3.782 Brazilian Real, while North Sea Oil is steady and is selling at US$ 81.00 per barrel. 

The London and New York markets started the day on Friday on a positive note and with both markets maintaining a positive track, into the early afternoon trade.  As the afternoon progressed the New York market started to attract short covering buying from the speculative fund sector of the market, with buy stops being triggered, to accentuate the losses.  With the lack of Brazil selling pressure that came with Friday’s Nossa Senhora de Aparecida public holiday, most likely assisting to allow the New York market to maintain its buoyancy and followed in a less dramatic manner by the London market.   To set both markets for firm end to the weeks trade. 

The London market ended the day on a positive note and with 81.2% of the earlier gains of the day intact, while the New York market started the day on a very positive note and with 93.6% of the earlier gains of the day intact.   This close does much to point a more positive picture for the charts but the reality is that the oversupply scenario still exists and that Brazil shall return to the field of play today, which with the evidence of a relatively sharp drop in the short-sold positions within both markets, might also bring to the fore a degree of caution and attract some producer price fixation selling activity.   Factors that might hinder the chances of follow through buoyancy during early trade today, against the prices set on Friday, as follows: 

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

NOV   1713 + 22                                             DEC    116.55 + 3.65

JAN    1725 + 26                                             MAR   120.10 + 3.60

MAR   1741 + 27                                             MAY   122.50 + 3.55

MAY   1754 + 27                                              JUL    124.85 + 3.60

JUL    1766 + 27                                              SEP    127.20 + 3.60

SEP    1779 + 28                                              DEC   130.50 + 3.60

NOV   1792 + 28                                              MAR   133.75 + 3.60

JAN    1806 + 28                                              MAY   135.80 + 3.60

MAR   1822 + 28                                              JUL    137.60 + 3.65

MAY   1834 + 28                                              SEP    139.35 + 3.65


Coffee Market Report October 12 2018

The weather reports from Brazil confirm normal rainfall for the main coffee districts so far this month, which is supportive for a fair to good crop for next year.  With further rains due for the weekend, to further support the prevailing lack of concern over the prospects for some problems for the longer term coffee supply from Brazil. 

The Climate Prediction Centre of the U.S.A. National Weather Service have upped their forecast for a new El Niño phenomenon to develop within the Pacific Ocean by the end of year, to now foresee a 70% to 75% chance of this to occur.   There is though no indication as to how severe this might be, as a mild El Niño would not be damaging to the potential crops from the Pacific rim coffee producing countries and likewise, to coffee producers further afield. 

The respected Brazilian analyst Safras & Mercado have estimated that so far approximately 51% of the bumper new crop coffees had been sold by the farmers, with what the estimate to be 48% of the new arabica crop coffee sold and 62% of the new conilon robusta coffee crop coffees sold.   But indications are that with good volumes of sales in hand and with the firmer Brazil Real influencing internal market prices, that there is a degree of internal market price resistance developing and internal market trade is slowing. 

The Brazil market is off the field of play for today, with the country celebrating the Nossa Senhora de Aparecida public holiday, which shall along with the distraction of the Swiss Coffee Trade Association meetings and Dinner, shall dull physical coffee trade for the day. 

Vietnam have been experiencing frequent rains over the past few weeks, but are anticipating the dry winter season to soon kick in and to trigger the start of the new coffee harvest.   This harvest expected to bring to the fore another large new crop, while in the meantime and with the improved reference prices of the international coffee terminal markets, internal market sales of the modest past crop stocks still in hand have picked up in volume. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.83 usc/Lb., while this equates to 31.74% 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 6,483 bags yesterday; to register these stocks at 2,420,604 bags.  There were meanwhile a smaller in number 3,511 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 57,577 bags. 

The commodity markets along with the equity markets, were once again under pressure yesterday, to see the overall macro commodity index having an erratic day.   Sugar, Cocoa, New York arabica Coffee, Cotton, Copper and Gold markets nevertheless ended the day on a positive note and the London robusta Coffee market on a steady note, while the Oil market lead the way for many other markets to end the day on a negative note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.12% higher; to see this index registered at 415.01.   The day starts with the U.S. Dollar steady and trading at 1.323 to Sterling, at 1.159 to the Euro and with the dollar buying 3.782 Brazilian Real, while North Sea Oil is showing some degree of buoyancy and is selling at US$ 81.35 per barrel. 

The London and New York markets started the day yesterday on a softer note and with both markets coming under early pressure and with sell stops being triggered, to accentuate the losses, but with both markets soon managing to bounce back from the lows and to enter the early afternoon trade on a more modest negative note.  However as the afternoon progressed the New York market started to attract support and to move up into positive territory which was followed late in the day by a recovery for the London market, to see the New York market end off with some degree of muscle and the London market on something of a sideways track. 

The London market ended the day on a steady note and having recovered the earlier $ 27.00 losses of the day and with 25% of the modest gains of the day intact, while the New York market ended the day on a positive note and with 62.5% of the earlier gains of the day intact.   This close and with Brazil and many of the consumer market industries off the field of play for the day, might well inspire a degree of confidence and set the markets for a steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1691 + 9                                               DEC    112.90 + 1.00

JAN    1699 + 1                                               MAR   116.50 + 1.00

MAR   1714 + 1                                               MAY   118.95 + 1.00

MAY   1727 + 1                                                JUL    121.25 + 1.00

JUL    1739 + 1                                                SEP    123.60 + 1.05

SEP    1751 – 1                                                DEC   126.90 + 1.00

NOV   1764 – 2                                                MAR   130.15 + 1.00

JAN    1778 – 2                                                MAY   132.20 + 1.00

MAR   1794 – 2                                                JUL    133.95 + 1.00

MAY   1806 – 2                                                SEP    135.70 + 1.00


Coffee Market Report October 11 2018

The Brazilian Coffee Exporters Association Cecafé have noted that while the country exported 27% more coffee during the month of September when compared to the same month last year, that the 2.73 million bags exported could have been much more, if there had not been the problem of more shipping space availability.   This lack of shipping space presently causing delays in shipments of forward coffee contracts, which Cecafé estimate has reduced the contracted for shipment in September coffee export volumes. 

Meanwhile the Brazilian Agricultural Ministry have forecast that the country that relies on agricultural exports for approximately 50% of its export income, that the agricultural exports for this year shall be worth approximately 100 billion U.S. Dollars.   Noting that that agriculture contributes to approximately 25% of the countries total economy and is presently a strong sector, which shall contribute towards an approximate 1.4% gross national product growth for this year. 

The Indian Coffee Exporters Association have voiced concerns over their ability to maintain market share for Indian coffees for this present October 2018 to September 2019 coffee year, following the devastating rains that hit some of the main coffee growing districts in South West India this year.    Suggesting that the countries exporters might suffer from in excess of a 30% shortage in internal market coffee supply, to fuel their traditional export demand.  But also noting that in terms of the significant global coffee surplus supply that is due for this year, that this is a factor that shall not cause concerns on the part of most of the consumer market industries. 

The physical coffee market is due for something of a long weekend with the annual Swiss Coffee Trade Association taking place over today and tomorrow and with the related Thursday Cocktail Party and the Friday Gala Dinner attracting leading representatives of just about every major consumer market coffee industry player and along with, representatives of every major coffee trade company.   This event that has returned to Geneva this year is now seem to be more of a global coffee event, than a Swiss coffee event. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 34.88 usc/Lb., while this equates to 31.17% 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 845 bags yesterday; to register these stocks at 2,414,121 bags.  There were meanwhile a larger in number 3,567 bags increase in the number of bags pending grading for this exchange; to register these pending grading stocks at 61,088 bags. 

The commodity markets along with the equity markets, were under pressure yesterday, to see the overall macro commodity index on the back foot for the day.   The Orange Juice and Gold markets nevertheless ended the day on a positive note, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn, Soybean and Silver markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.64% lower; to see this index registered at 414.50.   The day starts with the U.S. Dollar steady and trading at 1.321 to Sterling, at 1.155 to the Euro and with the dollar buying 3.755 Brazilian Real, while North Sea Oil is near to steady and is selling at US$ 82.15 per barrel. 

The London and New York markets started the day yesterday with some degree of buoyancy, but with the London market soon coming under pressure and slipping back to trade below par and to see the markets taking a mixed stance, into the early afternoon trade.   As the afternoon progressed and with the negative influences of the soft overall macro commodity index playing its part upon sentiment and along with a weaker Brazil Real coming into play, the New York market came under pressure and slipped back into negative territory.   This triggered sell stops with accelerated the losses for the New York market and followed by similar selling and softness for the London market, but with both markets experiencing a degree of exhaustion and bouncing back from the lows and towards a more modest soft close for the day. 

The London market ended the day on a negative note but having recovered 78.6% of the earlier losses of the day by the close, while the New York market ended the day on a negative note and with 59.5% of the earlier losses of the day intact.   This close and the reversal of the fortunes for the markets and likewise commodity markets in general is likely to inspire some degree of caution and one would think that the coffee markets are due a hesitant and only close to steady start for early trade today, against the prices set yesterday, as follows: 

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

NOV   1682 – 11                                             DEC    111.90 – 1.25

JAN    1698 – 6                                               MAR   115.50 – 1.20

MAR   1713 – 5                                               MAY   117.95 – 1.20

MAY   1726 – 6                                                JUL    120.25 – 1.25

JUL    1738 – 7                                                SEP    122.55 – 1.25

SEP    1752 – 7                                                DEC   125.90 – 1.25

NOV   1766 – 7                                                MAR   129.15 – 1.25

JAN    1780 – 7                                                MAY   131.20 – 1.25

MAR   1796 – 7                                                JUL    132.95 + 1.25

MAY   1808 – 7                                                SEP    134.70 + 1.25


Coffee Market Report October 10 2018

The Vietnam Customs Department have reported that the countries coffee exports for the month of September were lower than originally forecast, to be registered at 2,011,083 bags.   This number they say has contributed to the country’s cumulative coffee exports the first nine months of this year, to be 18.8% higher than the same period in the previous year, at a total of 24,116,667 bags. 

The Vietnam Customs Department have further reported that this has contributed to the country’s coffee exports for the October 2017 to September 2018 coffee year to have been 12.3% higher than the previous coffee year, at a total of 29,916,667 bags. 

Vietnam is now poised for the start of the new crop harvest, which should be well underway within the next few weeks, with mixed forecasts coming to the fore in terms of the size of this new crop but with most still looking towards another large crop.   But with Brazil having harvested a significantly larger new conilon robusta coffee crop this year and potentially due to export between four to five million bags of these coffees, it shall provide for some degree of competition for the Vietnam robusta coffees over the coming months. 

There are concerns though being voiced within the internal market in Brazil over the relatively soft prices that are being dictated by the relatively low value reference prices of the international markets, which with the Brazil Real having firmed against the U.S. dollar are pressuring internal market prices lower.   This has triggered the Brazil Farmers Confederation to approach the Ministry of Agriculture in Brazil to look to direct funding towards assisting farmers to finance the carry of coffee stocks, which shall reduce the pressure to sell of stocks to pay farm debts.   

The Colombian Government and with approximately 540,000 farming families related to coffee are meanwhile already taking active steps to provide finance to assist coffee farmers, but with farm gate prices for many coffee farmers reported to be below cost, it is a complicated issue to find sufficient finance to truly eliminate the negative effects of soft international coffee prices. 

Meanwhile the International Coffee Organisation who had forecast a global coffee deficit supply of 3.56 million bags for the just completed October 2017 to September 2018 coffee year, have revised this and reported that there was in fact a global surplus coffee supply over this period of 2.58 million bags.   This report and ahead of the increased surplus supply that is due for the new October 2018 to September 2019 coffee year that comes with the recently completed bumper Brazil crop, will surely contribute towards the prevailing bearish sentiment within the coffee markets.   Despite the recent short covering positive correction within the markets, which has assisted to buoy prices in the recent days. 

The January 2019 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 35.86 usc/Lb., while this equates to 31.69% 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 2,870 bags yesterday; to register these stocks at 2,413,276 bags.  There were meanwhile a smaller in number 507 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 57,521 bags. 

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 3,500 bags or 0.24% over the week of trade leading up to Monday 8th. October, to see these stocks registered at 1,450,000 bags, on the day. 

The commodity markets were mixed in trade yesterday, but with many markets showing some degree of buoyancy, to see the overall macro commodity index taking an upside track for the day.    The Oil, Natural Gas, Sugar, Cocoa, Coffee, Copper, Wheat, Gold and Silver markets ended the day on a positive note, while the Cotton, Orange Juice, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.22% higher; to see this index registered at 417.15.   The day starts with the U.S. Dollar steady and trading at 1.317 to Sterling, at 1.150 to the Euro and with the dollar buying 3.716 Brazilian Real, while North Sea Oil is showing a degree of early buoyancy and is selling at US$ 85.20 per barrel. 

The London market ended the day on a positive note and with 40% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 83.9% of the earlier gains of the day intact.   This close and with the Brazil Real remaining firm, is likely to inspire some degree of confidence and to set the markets for a steady start for early trade today against the prices set yesterday, as follows: 

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

NOV   1693 + 9                                               DEC    113.15 + 1.30

JAN    1704 + 4                                               MAR   116.70 + 1.35

MAR   1718 + 5                                               MAY   119.15 + 1.35

MAY   1732 + 5                                                JUL    121.50 + 1.35

JUL    1745 + 3                                                SEP    123.80 + 1.35

SEP    1759 + 3                                                DEC   127.15 + 1.30

NOV   1773 + 3                                                MAR   130.40 + 1.30

JAN    1787 + 3                                                MAY   132.45 + 1.30

MAR   1803 + 3                                                JUL    134.20 + 1.25

MAY   1815 + 3                                                SEP    135.95 + 1.25