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18th. June, 2013. This rise in the speculative short sold position within the London market one might question, as while it now follows the negative sentiment generated by the prevailing and longer term surplus supply of arabica coffees that has seen speculators go significantly short within the New York market, there is no evidence of longer term surplus supply of robusta coffees. Thus while the speculative sector of the London market has contributed to the softening of prices of this market; there is a medium term possibility for this market to steady and to once again show some degree of buoyancy. Meanwhile and following yesterday’s steady close, the London robusta coffee market now offers an attractive 43.56 usc/Lb. or 35.6% price discount to the New York arabica coffee market, which shall maintain the attractiveness of robusta coffees to the majority of main stream roasters who are fighting for market share within the very competitive consumer markets. The Green Coffee Association of the U.S.A. have reported that the port warehouse stocks within the U.S.A. rose by 280,239 bags or 5.76% during the month of May, to see these stocks registered at 5,147,916 bags at the end of the month. These stocks that do not include the roaster inventories and the bulk container transit stocks within the country at the time and with the majority of Canadian roasters using the U.S.A. based warehouse facilities, would be the equivalent of 10.82 weeks of U.S.A. and Canadian average roasting activity and therefore if one were to apply at least two weeks of inventory and transit stocks at the time, North America was holding the very safe equivalent of at least in excess of 13 weeks of summer roasting activity stocks as at the end of last month. Following on from the May export figures that had been announced earlier in the month by neighbouring Guatemala, Honduras, Costa Rica and El Salvador the National Exporters Association of Nicaragua have announced that the countries coffee exports for the month of May were 24,846 bags or 12.65% higher than the same month last year, to total exports for the month of 221,212. These higher exports have contributed to the countries cumulative exports for the first eight months of the present October 2012 to September 2013 coffee year being 355,485 bags or 37.31% higher than the same period in the previous coffee year, at a total of 1,308,193 bags. One has to however keep in mind that this sharp rise in cumulative exports from Nicaragua is not related to a significantly higher new crop, but to significant carryover stocks of approximately 350,000 bags of 2011/2012 crop coffees into the new crop, which had inflated the country’s exports during the last quarter of last year. Thus in terms of export performance from the country so far, it would indicate that the recently completed crop was somewhere close to the levels of the previous crop while with the incidence of Roya or Leaf Rust, the country is forecasting a 16% decline in production for the next October 2013 to February 2014 new crop. The Coffee Board of India has reduced by 3% its earlier forecast for the present October 2012 to September 2013 coffee year to a total of approximately 5,258,333 bags. Meanwhile the new monsoon season has started on track and with good overall rains, which shall be beneficial for the development of the new crops for the follow on 2013/2014 coffee year. The problem is that with these new crop coffees presently being sold against the reference prices of the soft international market, that many farmers shall struggle to maintain profit margins and this might reduce the levels of inputs that shall be applied to support the development of the new crop coffees. This factor albeit early days still, might well result in a flat to perhaps even marginally lower production from India for the forthcoming coffee year and meanwhile with a steadily growing domestic market and despite some import supplementation of coffee requirements, the export potential from this new Indian crop during the October 2013 to September 2014 coffee year might well be marginally reduced. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 35 bags yesterday, to register these stocks at 2,746,063 bags. There was meanwhile a modest 560 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 14,084 bags. The commodity markets remained uncertain yesterday, with players focusing on both the G8 meetings in Northern Island and todays meeting by the U.S.A. Federal Reserve, to gain some insight on the longer term policy’s that might be forthcoming from both meetings. The U.S. Oil, Natural Gas, Sugar and Corn markets showed buoyancy and the London robusta Coffee and Platinum markets were steady for the day, while the Brent Crude, Cocoa, New York arabica Coffee, Cotton, Copper, Orange Juice, Wheat, Soybean, Gold, Silver and Palladium market had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.23% lower, to see this Index registered at 527.32. The day starts with a steady U.S. Dollar trading at 1.567 to Sterling and 1.334 to the Euro, while Brent Crude is near to steady and is selling at $ 105,30 per barrel. The New York market started the day yesterday with buoyancy and followed by a steady start for the London market that followed through with hesitant buoyancy. The New York market maintained its buoyancy into the afternoon’s trade, but with the London market coming under some pressure and slipping back into negative territory but to recover by the end of the day and to take a steady stance for the close. The New York market however and despite support for the prompt month that ended on a sideways track, ended the day with the forward months tending softer and with 57% of their losses of the day intact. This close provides little indication of direction and one might expect to see a hesitantly steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1737 – 1 JUL 122.35 + 0.10 17th. June, 2013. There can however with the decline in the value of the New York market since last week Tuesday, have been a significant increase in the short term in nature Managed Money fund sector of the markets short sold position, which will become clear at the end of this week. Meanwhile with the speculative sector of the markets short sold position already by last week Tuesday being the equivalent of 9,775,211 bags and by now perhaps exceeding 10 million bags, it provides a clear illustration of the bearish sentiment that prevails within the surplus supply arabica coffee market. The Customs Department in Vietnam have reported that despite price resistant slow trade activity over the past couple of months of softening international market prices, that the exports for the month of May of mostly robusta coffees were 5.3% higher than the previous month at a total of 1,945,000 bags. It was noted however that despite this improved performance that the countries coffee exports for the first five months of this calendar year are still 22.5% lower than the same period last year, at a total of close to 11,733,333 bags. These exports did however follow on from a very active export performance from the country during the last quarter of 2012 and therefore, the slower performance experienced during 2013 so far, has not caused any noticeable shortages of robusta coffee supply for the consumer market roasters. There are however in the meantime been significant concerns over the problems that are developing for robusta coffee exporters in Indonesia, who have been struggling to source new crop coffees from the countries internal traders, who have been showing price resistance to the unexpected sharp decline in the reference prices of the London market. This has resulted in defaults during the past few days of forward export contract commitments, which has caused many consumer market trade houses to have to look to other robusta coffee origins for fill in supply, so as to cover for their contract commitments. Meanwhile this scenario has stalled offers of Indonesian robusta coffees to the consumer markets, as exporters struggle to bring some order into a very difficult and uncertain situation. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 225 bags on Friday, to register these stocks at 2,746,098 bags. There was meanwhile no change to the number of bags pending grading for the exchange, to register these pending grading stocks at 13,524 bags. The Certified robusta coffee stocks held against the London market were seen to decrease by 55,667 bags or 2.68% in the two weeks of trade leading up to Monday 10th. June, to see these stocks were registered at 2,019,000 bags, on the day. These stocks are however now most likely to accelerate their decline in the coming weeks, as the rising export differential demands from the Asian producers and the defaults from Indonesia, make these stocks an attractive buy for many consumer market roasters. This scenario is perhaps due to assist to halt the recent slide in value for this market, which shall perhaps assist to buoy confidence and add some value to the oversold London market in the coming weeks. It is however difficult to foresee by how much this market has the potential for recovery, as it is now the slow summer holiday season for the main consumer markets and trade can be expected to remain lacklustre in nature until early August. The commodity markets had a mixed day on Friday, with many players presumably now looking forward to this week’s G8 meetings in Northern Ireland. The Oil, Natural Gas, Sugar, London robusta Coffee, Copper, Orange Juice, Corn, Soybean, Gold and Silver markets had a firmer day, while the Cocoa, New York arabica Coffee, Wheat, Platinum and Palladium markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.16% higher, to see this Index registered at 528.56. The day starts with weaker U.S. Dollar trading at 1.572 to Sterling and 1.334 to the Euro, while Brent Crude is tending softer and is selling at $ 105,25 per barrel. The New York market started the day on Friday on a steady note and following a short term dip in value, showing some buoyancy for the morning’s trade, but followed by a softer start for trade within the London market. This latter market did however soon recover back into positive territory and both markets looked to show some degree of muscle, but it was short-lived for the New York market which came under pressure during the afternoon and slid back into negative territory, while the London market maintained its positive stance. The London market continued on its positive track and ended the day with 81% of its gains of the day intact, while the New York market remained in the doldrums and ended the day on a soft note and with 78% of its losses of the day intact. This mixed close provides little inspiration but there has been a corrective start and some buoyancy for early trade within the New York market this morning while the London market is starting on a steady note, which with the weaker nature of the U.S. dollar in play might suggest that there shall be a steady track taken for the markets today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1739 + 34 JUL 122.25 – 1.45 14th. June, 2013. The respected Brazil coffee market analysts Safras & Mercado have increased their earlier forecast for the new Brazil crop to come and have revised their earlier estimate for the 2013 crop to be 52.90 million bags. This harvest in the early stages is expected to be a record crop for a lower biennial bearing year, a factor that has been absorbed by the market and with this figure mostly in line with other industry and market estimates, is not anticipated to have an influence upon the markets. Safras have meanwhile increased their Arabica estimate and reduced the Conilon forecast, already in harvest due to excessively dry weather in the past few months.
Preliminary data for the Certified Robusta coffees held against the London market were seen to have fallen by 55,667 bags or 2.68% in the two weeks of trade leading up to Monday 10th June, to register these stocks at 2,019,066 bags on the day.
The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 144 bags yesterday, to register these stocks at 2,746,323 bags. There was an increase of 3,346 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 13,524 bags yesterday.
It was a mixed day on the commodity markets yesterday, the softer US Dollar providing some buoyancy, although the underlying uncertainty surrounding a lack of support for additional fiscal stimulus would seem to have had a dampening influence upon sentiment. It was a firmer day on the Oil markets, as well as a positive close for Wheat, Arabica Coffee, Sugar, and Silver and a softer day for Gold, Copper, Corn, Soybeans, Cocoa, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered at 0.43% lower, to see this Index at 527.74. The day starts with the U.S. Dollar trading at 1.569 to Sterling and 1.335 to the Euro, while Brent Crude is trading firmer and selling at $ 104.37 per barrel.
It was another softer opening for the London Robusta market yesterday, while New York Arabica held mildly lower on opening and some early losses bringing speculative short covering activity back to the floor, to prop up this market by midsession. In an almost mirror opposite move, London Robusta remained in negative territory to with overhead origin sellers capping modest gains as the session ensued. The New York market continued to gain ground as the afternoon met with bolstered buyers, to lead to a positive close in this market just off the day’s highs. The London Robusta market did not fare as well and the latter day relatively light volume in London flattened out activity but with late in the day pressure lead to a softer close in this market and near to the day’s lows, to see the close yesterday with some buoyancy in New York and a softer tone in London, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JUL 1705 – 42 JUL 123.70 + 0.95 SEP 1731 – 49 SEP 125.40 + 0.95
NOV 1747 – 46 DEC 128.75 + 0.95
JAN 1757 – 46 MAR 132.05 + 0.90
MAR 1773 – 46 MAY 134.15 + 1.05
MAY 1788 – 46 JUL 136.10 + 1.10
JUL 1804 – 46 SEP 137.85 + 0.95
SEP 1817 – 44 DEC 140.20 + 1.00
NOV 1823 – 44 MAR 142.15 + 1.00
JAN 1823 – 44 MAY 143.60 + 1.00
13th. June, 2013. The weather over the main coffee districts in southern and central Brazil remains unthreatening for the present, with some bouts of scattered rain showers in play, but otherwise conducive to the prevailing harvest of the new Arabica coffee crop. The issue of frost threat remains side lined, with perhaps the most threatening period being around the time of the next full moon, which shall occur in the last week of June. Within Brazil, the Real which is trading at 2.155 to the US Dollar is softening the blow somewhat against the lower value to be had against the New York Arabica market and is likely to be a contributing factor toward such producers reluctantly becoming more active sellers into this lower market.
There is a dearth of news within the coffee markets presently and lacking fuel to inspire the speculative sector. This sector of the market is seemingly content to build upon the current overall short position, while coffee flows to the consumer markets from key coffee producers ahead of the traditional lower consumption demand in the Northern hemisphere, as the summer holiday months approach.
The Certified washed Arabica coffee stocks held against the New York market remained unchanged yesterday, to register these stocks at 2,746,179 bags. There was an increase though, of 4,200 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 10,178 bags yesterday.
In a reversal of fortunes, the commodity markets showed some buoyance yesterday, despite the waves of gloomy economic forecasts coming to the markets, the latest of which is from the World Bank that has cut its outlook for global growth in its twice yearly Global Economic Prospects report. A continuation of the recent slide of the US Dollar against other major currencies provided some support as US Dollar denominated commodities become more appealing in other major currencies.
The Oil markets posted a recovery on the day to likewise add to the buoyant tone and it was a better day for Gold, Copper, Soybeans, Cocoa, and a positive close for Cotton, Silver, Platinum and Palladium. The coffee markets that had otherwise showed some resistance to the surrounding macro environment faltered yesterday, as was it a negative day for Corn, Wheat, Sugar and Orange Juice. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered at 0.03% lower, to see this Index at 530.01. The day starts with the U.S. Dollar trading at 1.567 to Sterling and 1.338 to the Euro, while Brent Crude is steady and selling at $ 102.11 per barrel.
The coffee markets started the day yesterday with volume in sellers quickly applying pressure to the London Robusta market, triggering stops along the way. It was however a less dramatic opening for New York which held on to a narrow range for the early part of the day touching into positive territory for a brief while. Producer and origin pressure in London finally met with underlying buying support to set the floor and this market posted a recovery although still in negative territory by midsession. As the day progressed however with origin, commercial and speculative sellers leaning in heavily to limited underlying buyer support, the New York market took the lead and quickly added to the losses, to break through the previous chart low and trigger fresh stops along the way. The London Robusta market faltered toward the latter day and followed the same negative track, with both markets registering a mild recovery from the lows of the day, to slightly better at the close but both markets retained the losses to register the close at 3.87% lower on the day in New York and 2.83% lower in London and set the prices, on a softer note as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JUL 1747 – 51 JUL 122.75 – 4.95 SEP 1780 – 42 SEP 124.45 – 5.15
NOV 1793 – 45 DEC 127.80 – 5.15
JAN 1803 – 45 MAR 131.15 – 5.20
MAR 1819 – 44 MAY 133.10 – 5.25
MAY 1834 – 44 JUL 135.00 – 5.30
JUL 1848 – 45 SEP 136.90 – 5.10
SEP 1861 – 46 DEC 139.20 – 4.80
NOV 1867 – 46 MAR 141.15 – 4.75
JAN 1867 – 46 MAY 142.60 – 4.75
12th. June, 2013. Following the positive May export figures from Guatemala and the flat cumulative results from Costa Rica and Honduras, neighbouring El Salvador have reported a positive monthly export figure. In this respect, the El Salvador National Coffee Council has reported that the country’s exports for the month of May were 5.9% higher than the same month last year, at a total of 128,947 bags. However El Salvador has experienced a slow start to the present October 2012 to September 2013 coffee year and despite an improved performance last month, the cumulative exports for the first eight months of this coffee year are 2% lower than the same period in the previous coffee year, at a total of 806,428 bags.
The Coffee Federation in Colombia have reported that coffee production during the month of May increased by 36% on that of the same month last year to register production at 937,000 bags. Similarly they have reported that the countries coffee exports for the month were 45% higher than the same month last year, at a total of 854,000 bags. This brings Colombia to a total cumulative production for the first eight months of the October 2012 to September 2013 coffee year to a total of 6,548,000 bags and a cumulative total for coffee exports at 5,929,000 bags thus far in the year.
The Certified washed Arabica coffee stocks held against the New York market fell by 170 bags yesterday, to register these stocks at 2,746,179 bags. There was likewise a modest 1,021 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 5,978 bags yesterday.
It was another soft day on the commodity markets yesterday, the news of the Bank of Japans resistance to providing additional fiscal stimulus to the economy was generally negatively received by the markets. The US government has close to doubled their estimate of shale Oil supplies, lending pressure to the Oil markets which finished the day in negative territory. It was a similarly softer day for Gold, Copper, Coffee, Cocoa, Sugar, Silver, Platinum and Palladium. It was a better day for the grains with a positive close on the day for Corn, Soybeans and Wheat, as with Cotton and Orange Juice. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered at 0.28% lower, to see this Index at 530.15. The day starts with the U.S. Dollar trading at 1.567 to Sterling and 1.332 to the Euro, while Brent Crude is softer and selling at $ 101.49 per barrel.
The coffee markets opened the day yesterday with a brief round of recovery, New York continuing on a positive track and a buoyant opening in London. The surrounding macroeconomics of the day had an influence however and within the morning session both markets were trading in negative territory. It was another hefty day of trade in New York with good volumes of trade related to roll over of positions ahead of the prompt month first notice day next week. The London Robusta market found little underlying support as the day went on, with both markets performing in accordance with the overall softer market sentiment along with the present plentiful supplies of coffee to come from Brazil and Vietnam weighing in on the coffee markets and a combination of origin and speculative seller activity on the day. The New York Arabica market managed to post a late in the day recovery, to see this market clamber back from the lows of the day and although a close in negative territory some of the earlier losses were recovered. The London Robusta market did not fare as well with a continuation of sellers applying pressure to the market toward a softer close which was near to the days’ lows. The markets closed the day yesterday on a softer note in London and off the days’ lows but still in negative territory in New York, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JUL 1798 – 47 JUL 127.70 – 1.05 SEP 1822 – 35 SEP 129.60 – 1.25
NOV 1838 – 34 DEC 132.95 – 1.35
JAN 1848 – 35 MAR 136.35 – 1.30
MAR 1863 – 37 MAY 138.35 – 1.35
MAY 1878 – 36 JUL 140.30 – 1.30
JUL 1893 – 37 SEP 142.00 – 1.25
SEP 1907 – 37 DEC 144.00 – 1.15
NOV 1913 – 37 MAR 145.90 – 1.15
JAN 1913 – 37 MAY 147.35 – 1.25
11th. June, 2013. The latest Commitment of Traders report from the London Robusta coffee market has seen the Speculative sector of this market increase their net short position in the market by 40.04% in the week of trade leading up to Tuesday 4th June, to register a net short sold position of 7,096 Lots. This net short position is the equivalent of 1,182,667 bags is perhaps modestly extended, with the overall negative trade that has since followed.
The recent widening between London Robusta coffee market and New York Arabica meanwhile, has seen the arbitrage increase to 45.06 usc/Lb. and the London market offer a price discount of 35% to the New York Arabica coffee market as of yesterdays close.
The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 3,203 bags yesterday, to register these stocks at 2,746,349 bags. There was meanwhile a modest 934 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 6,999 bags yesterday.
It was an overall softer day on the commodity markets yesterday, with the latest round of exports and domestic activity data from China indicating a slowing in economic growth and lower export figures, dampening sentiment within the commodity sector. The leading in influence, Oil markets leant a softer tone and finished in negative territory. It was a similarly softer close for Copper, Corn, Soybeans, Wheat, Cocoa, London Robusta Coffee and Sugar. The metals markets were however improved on last with a positive day for Gold, Silver, Platinum and Palladium, as was New York Arabica Coffee, Cotton and Orange Juice positive on the close. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets registered at 0.11% lower, to see this Index at 531.64. The day starts with the U.S. Dollar trading at 1.558 to Sterling and 1.327 to the Euro, while Brent Crude is softer and selling at $ 103.41 per barrel.
The coffee markets started the day yesterday on a softer note to gain some degree of buoyancy which met early on in the session with some downward origin seller pressure, although both markets managed to maintain momentum toward midsession. As the day progressed the New York Arabica market picked up pace with speculative buying activity returning to the floor and in good volume to trigger stops along the way and the rest of the day remained in positive territory albeit choppy within a narrow margin environment. It was a more subdued day for London Robusta where the volume was muted in comparison and the range thin holding steady at around unchanged. An attempt to follow New York higher, met with speculative sellers to cap the gains in London and with a mild recovery toward unchanged on the day. The markets registered a positive close in New York near to the days’ highs and a mildly softer finish in London, within the middle of the days trading range, to set the close yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JUL 1845 - 3 JUL 128.75 + 1.80 SEP 1857 - 6 SEP 130.85 + 1.85
NOV 1872 - 8 DEC 134.30 + 1.85
JAN 1883 - 10 MAR 137.65 + 1.80
MAR 1900 - 9 MAY 139.70 + 1.75
MAY 1915 - 10 JUL 141.60 + 1.70
JUL 1930 - 14 SEP 143.25 + 1.60
SEP 1944 - 14 DEC 145.15 + 1.45
NOV 1950 - 14 MAR 147.05 + 1.45
JAN 1950 - 14 MAY 148.60 + 1.50
10th. June, 2013. The latest Commitment of Traders report from the New York fine washed arabica coffee market has seen the shorter term Managed Money Fund sector of the market increase their net short sold position within this market by 26.15% in the week of trade leading up to Tuesday 4th., June, when this net short sold position was registered at 18,270 Lots. Over the same period the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.83% to register a net long position of 55,531 Lots, on the day.
During this week of trade the Non Commercial Speculative sector of the New York market is seen to have increased their net short sold position within the market by 5.71%, to register a net short sold position of 34,290 Lots. This speculative net short sold position which is the equivalent of 9,721,063 bags is likely to have been little changed in the mixed and erratic trade that followed last week and likewise, the Managed Money Funds can be expected to have been little changed.
The weather forecasts are for dry weather for the next couple of weeks in the central and southern arabica coffee districts in Brazil, which should see the new arabica crop harvest start to accelerate, with good volumes of new crop coffees coming in to join the relatively substantial past crop arabica coffee stocks in the warehouses. This is going to put farmers and cooperatives under some pressure to dispose of some of their surplus stocks, which is likely to result in relatively soft prices within the internal market. There is however with these sales having to be concluded against the relatively soft prices of the international market, from the fact that the Brazil Real has depreciated by 8% in value against the U.S. dollar, over the past three months.
Coffee consumption within the developed West European consumer markets which account for approximately 36.2 million bags or 37.8% of world consumer market demand remains flat and likewise for the North American markets, which account for approximately 24.8 million bags or 25.8% of world consumer market demand. There is however aside from the well-developed Japanese market that accounts for approximately 7.23 million bags or 7.54% of world consumer market consumption, a vibrant growth within the Asian coffee markets and followed by the Middle East markets and some of the markets in Eastern Europe, which is assisting along with steady increasing demand within many producer domestic markets, to grow overall world coffee demand by approximately 2.9 million bags per annum.
This all contributes to an overall world coffee demand of approximately 137.5 million bags per annum, as against a world coffee supply for this present October 2012 to September 2013 coffee year of approximately 145 million bags. This scenario would tend to justify the present soft nature of the coffee markets that prevail, as there most definitely is a significant surplus coffee supply for the present. There is however a potential for a lower Roya or Leaf Rust Central American production for the coming coffee year and a marginally lower biennially bearing new Brazil crop of 52 million bags, which should see world coffee supply reduced to approximately 139 million bags for the October 2013 to September 2014 coffee year. This lower supply shall be seen against a rising world coffee demand that might exceed 140 million bags and therefore, with tightening supply by early next year some degree of justification for a degree of market buoyancy for the last quarter of this year. For the present the market however, focus remains on the present stocks and especially the very obvious Brazil carryover stocks and with these stocks due to dent the medium to long term positive effects of tightening supply, which keeps the markets within the doldrums of bearish speculative sentiment for the present.
The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 2,585 bags on Friday, to register these stocks at 2,749,552 bags. There was meanwhile a very similar 2,320 bags decrease in to the number of bags pending grading for the exchange, to register these pending grading stocks at 6,065 bags.
The commodity markets were in receipt of less dismal than many had forecasted U.S. jobs data on Friday, but with uncertainty if the very modest buoyancy within the U.S. economy would inspire the Federal Reserve to scale back its stimulus program. Meanwhile there is further uncertainty over the demand from China, as many fear flattening growth within this second largest economy and the markets were overall mixed and directionless for the day. The Oil, Natural Gas, Cotton, Orange Juice, Corn and Soybean markets showed buoyancy, while the Sugar, Cocoa, London robusta Coffee and Wheat markets tended softer and the New York arabica Coffee, Copper, Gold, Silver, Platinum and Palladium markets had a soft day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.36% lower, to see this Index registered at 532.23. The day starts with the U.S. Dollar trading at 1.552 to Sterling and 1.319 to the Euro, while Brent Crude is tending firmer and is selling at $ 104.32 per barrel.
The New York market started the day on Friday with thin erratic trade that initially headed south but took a short pip up into positive trade and followed by a softer start for the London market, but with the New York market soon falling back and taking a shark downside track. The London market bucked the influence of the negative trend of the New York market and recovered its losses for early afternoon trend and showed some hesitant buoyancy, but this did not last and London finally succumbed to the negative sentiment within the market and dropped back to take a softer track for the rest of the day and end the day on a soft note and with 73.5% of the losses of the day intact. Meanwhile the New York market maintained its soft stance through the day and with extended losses later in the day, to end the day on a very soft note and with 79.4% of its losses of the day intact. This overall soft close for the markets and with consumer market industry buyers lacklustre in their buying activity would indicate little excitement and 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.
JUL 1848 – 14 JUL 126.95 – 2.50 SEP 1863 – 18 SEP 129.00 – 2.30
NOV 1880 – 18 DEC 132.45 – 2.30
JAN 1893 – 16 MAR 135.85 – 2.20
MAR 1909 – 15 MAY 137.95 – 2.05
MAY 1924 – 15 JUL 139.90 – 2.00
JUL 1944 – 15 SEP 141.65 – 2.00
SEP 1958 – 15 DEC 143.70 – 2.00
NOV 1964 – 15 MAR 145,60 – 2.05
JAN 1964 – 15 MAY 147.10 – 2.05
7th. June, 2013. These figures extrapolate to total coffee exports from Brazil for the month of May being 358,995 bags or 16.99% higher than the combined coffee exports for the same month last year, at a total of 2,472,341. What is significant however in terms of the prevailing value of the soft international coffee markets is that the value of the Brazil coffee exports for the month of May was 55 million U.S. dollars or 11.25% lower than the same month last year, at a total of 434 million U.S. dollars, which is quite a dramatic illustration of selling so much more volume for much less income. Meanwhile the Brazil Real has lost some value against the U.S. dollar in the past few days and is presently selling at 2.13 to the U.S. dollar, which is bringing some small relief to the countries farmers, as they look to sell past crop stocks to their dollar financed exporters. The sales are however having to be concluded into the seasonally quiet summer holiday demand period for the main consumer markets and therefore, there is little excitement within the internal market in Brazil, which can really only expect to pick up some steam in late July, as exporters look for stocks for August shipment and post-holiday arrival within the consumer markets. The U.S. Government weather forecasters Climate Prediction Centre have reported that the Southern Pacific Ocean El Nino and La Nina conditions are presently neutral, which would indicate that the coffee producers on the rim of the South Pacifica and particularly the main players Colombia, Indonesia and Peru, are due for normal weather conditions for the foreseeable future. The report further suggested that if one of these phenomena’s were to develop that rather than the earlier in the year forecasts for the possibility of a warming waters El Nino, that the probability now is more likely for a cooling waters La Nina phenomenon. The La Nina if severe is potentially damaging for coffee production for the South Pacific rim producers, as it brings with it excessive rains, as was experienced with the last strong La Nina by Colombia and Indonesia and with crop declines of between 25% and 35% being experienced. This is however really only related to a relatively strong La Nina and with this latest forecast indicating that any such phenomenon would be mild, one might forecast that for the present, one can expect rising levels of production for the coming 2013 to 2014 coffee year from all of these important Pacific Rim coffee producers. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 2,859 bags yesterday, to register these stocks at 2,746,967 bags. There was meanwhile a very modest 550 bags increase in to the number of bags pending grading for the exchange, to register these pending grading stocks at 8,385 bags. The commodity markets while players await today’s latest U.S.A. jobs data and with many anticipating poor figures shall be forthcoming, have benefited from the combination of the softer U.S. dollar yesterday and some movement of funds back out of overbought equities and into commodities. The Oil, Sugar, Cocoa, Coffee, Cotton, Corn, Gold, Silver and Palladium markets had a day of buoyancy and the Natural Gas and Platinum markets were steady, while the Copper, Orange Juice, Wheat, and Soybean markets having a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.34% higher, to see this Index registered at 534.15. The day starts with the softer U.S. Dollar tending steady on yesterday’s value and trading at 1.559 to Sterling and 1.325 to the Euro, while Brent Crude is tending softer against yesterdays higher value and if selling at $ 103.35 per barrel. The New York market started the day yesterday, but followed by a softer start for the London market, which immediately headed south on opening. The New York market maintained its buoyancy into the afternoon and gained further support from the positive nature of the macro commodity index, while the London market finally followed suit and moved back up into modest positive territory. The London market continued on this more positive track and ended the day on a modestly positive note and with 67% of its earlier gains intact, while the New York market added some more weight in the closing stages of the day and to end on a positive note and with 81.5% of its gains of the day intact. This positive close and with the support of the softer dollar, one might expect to encourage some precautionary roaster buying support and one might expect to see a steady to buoyant start for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1862 + 10 JUL 129.45 + 2.00 6th. June, 2013. Contrary to this report from the official Coffee and Cocoa Association in Vietnam the countries on site and therefore well qualified local traders in survey, have largely forecasted that the next new Vietnam crop shall in fact be equal to the last crop, at approximately 25 million bags. This new Vietnam crop can be expected to be made up from an approximate 96 to 4 ratio of robusta and arabica coffees, which would ensure a steady robusta coffee supply from this leading producer. The Indonesian Coffee and Cocoa Research Institute have voiced concerns over the slow growth of coffee farming within the country and its many coffee producing islands, which are dominated by the weighted production towards the island of Sumatra. They have reported that presently coffee plantation growth is only approximately 0.02% per annum, which is an extremely flat factor and with the prevailing softening international prices, it is not expected to accelerate on the short term. More of a concern however to the Indonesian Coffee and Cocoa Research Institute is the fact that with an estimated 1,233,000 hectares of land under coffee, that production is still only approximately 11 to 12 million bags per annum. This would work out at best to an average yield of 584 Kgs. per hectare and is therefore only 50% of the countries potential for the existing coffee farms, if farmers were to apply good farm husbandry and maintain full inputs. Thus the Institute is doing its best to encourage the countries coffee farmers to replace aged trees and plant out new disease resistant and higher yielding varieties and in a more practical yield enhancing manner, so as to grow the industry and the countries crop. This is however a long term project and one that is unlikely to have a marked impact upon Indonesian coffee production for some years, but one must recognise that the country does have the potential over the next decade to add from 5 to 10 million bags to the world coffee supply. The month of June has experienced early scattered showers over the majority of the coffee districts in Brazil, with all but the Vitoria da Conquista and Cacoal districts having experienced early rains, while parts of the leading producer districts of Sul de Minas Gerais and the Alegre district have already exceeded their average monthly rainfall. This is however a traditionally dry winter season and while rain showers are disruptive for the new arabica coffee crop harvest within the central and southern coffee districts of the country, these rains have not been excessive and the new crop harvest is now well on its way. This new arabica coffee crop in Brazil which can be expected to total approximately 34 to 35 million bags of which approximately 80% shall be the traditional natural process and 20% shall be semi washed or washed coffees, is now coming in to stores with many farmers still holding significant carryover stocks from the past 2012 crop. Thus there remains a cloud of negative sentiment within the speculative sector of the New York market, against which Brazil exporters price hedge sell their incoming stocks of Brazil arabica coffees and with the slow summer season in play, it is difficult to foresee a short term recovery for this presently very soft market. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by a negligible 250 bags yesterday, to register these stocks at 2,750,076 bags. There was meanwhile no change to the number of bags pending grading for the exchange, to register these pending grading stocks at 7,835 bags. The commodity markets are tending to suffer from the slow summer season and with uncertainty on the medium term economic indicators that shall be forthcoming from the U.S.A., Euro zone and Asian growth, are somewhat directionless for the present. The Oil, Cocoa, Copper, Corn, Soybean, Gold, Silver, Platinum and Palladium markets showed hesitant buoyancy and the Natural Gas, Sugar, New York arabica Coffee were near to steady, while the Cotton, London robusta Coffee, Orange Juice and Wheat markets had a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.20% lower, to see this Index registered at 532.36. The day starts with the U.S. Dollar tending softer and trading at 1.541 to Sterling and 1.311 to the Euro, while Brent Crude is tending softer and if selling at $ 102.80 per barrel. The New York market started the day yesterday on a buoyant note and followed by hesitant buoyancy for the London market. The New York market continued on its positive track into the afternoon’s trade, but with the London market losing its way and heading back into negative territory, which was followed by something of a collapse for the New York market that likewise headed back into negative territory. The London market continued on a sideways track to end the day on a soft note and with 73% of its losses of the day intact, while the New York market encountered a partial recovery late in the day and to end the day marginally softer, but having recovered 88.5% of its earlier losses by the close. This late in the day recovery for the New York market and with the softer dollar in play and while the somewhat oversold London market is now of offering a 34.09% price discount to the New York market, might be reason to believe in a hesitantly buoyant start for the markets today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1852 – 8 JUL 127.45 – 0.20 5th. June, 2013. The National Coffee Association in Guatemala have followed Honduras and Costa Rica in reporting that the countries coffee exports for the month of May were 50,070 bags or 12% higher than the same month last year, at a total of 467,468 bags. These exports have buoyed the countries cumulative exports for the first eight months of the present coffee year which they report to be 55,161 bags or 2.45% higher than the same period in the previous coffee year, at a total of 2,306,876 bags. Thus for the present and despite the earlier scare stories of Roya or Leaf Rust effected new crops that were due to significantly impact upon export volumes from Central America, there has yet to be a noticeable negative effect upon regional coffee supply. There is of course the fact that a good percentage of the exports over the past four months have been related to forward contract commitments by the regions exporters, which were concluded before the Roya factor started to come into play and while exporters have been keeping up with their contracted volumes, they have been struggling within their individual internal markets where farmers have been demanding higher premiums, so as to fulfil these commitments. The result of such a scenario is that exporters who have often had to buy in coffees from price resistant farmers at losses relative to their differentials to New York export commitments, have had to inflate their asking differentials for new business. This factor is however not much of a concern for the consumer market roasting industries as the majority of roasters have good forward cover in hand through to the third quarter of the year and while the battle over differentials for small volumes of new business from this region continues, it has little effect upon world coffee supply. It is however making it difficult for the Central American exporters, who have been struggling in the past few months, to make profits from their export activities. Meanwhile the main consumer markets which are all within the Northern Hemisphere are now entering their slow summer holiday season and physical coffee trade is lacklustre in nature, with volumes of new business tending to be low. This was evident from yesterday’s weekly coffee auction in Kenya where there was little support for all but the special gourmet quality coffees and with only 42.87% of the 16,238 bags of coffee on offer, being sold on the floor. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by a negligible 49 bags yesterday, to register these stocks at 2,750,076 bags. There was meanwhile an additional 4,247 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 7,835 bags. One must presume that the emotional effects of Roya or Leaf Rust that prevail within the Central American producer bloc that has resulted in price resistance and positive differentials for new business being demanded, has resulted in the majority of new crop stocks flowing into the consumer markets being too expensive to tender to the New York exchange certified stocks. This has had the effect of stalling the potential growth of these stocks which earlier in this year, were heading to levels above 3 million bags by now. The question is however with the new Peru crop now in full harvest and potentially due to flow in volume into the consumer markets how long the Central Americans can hold back remaining stocks for higher relative value and there remains the potential that by August that catch up sales shall start to flow into the markets, which shall see the certified stocks once more taking an upside track. The commodity markets were lacking directional news yesterday and with most players now looking forward to some indicators from Fridays U.S.A. updated employment figures, which saw mixed results coming forth from the markets. The U.S. dollar showed some buoyancy and the Oil, Natural Gas, Cocoa, Cotton, Copper, Orange Juice, Wheat and Corn markets showed buoyancy, while the Sugar, Coffee, Soybean, Gold, Silver, Platinum and Palladium markets had a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.21% higher, to see this Index registered at 533.44. The day starts with the U.S. Dollar tending softer and trading at 1.533 to Sterling and 1.309 to the Euro, while Brent Crude is showing some early buoyancy and if selling at $ 103.15 per barrel. The New York market started the day yesterday tending softer and followed by a softer start for the London market, but while the London market encountered a brief spell of buoyancy during the afternoon, the New York market remained under pressure and upon its softer track. The London market lost its new found steam and carried on to end the day on a soft note but having recovered 38.5% of its earlier losses by the close, while the New York market ended the day on a similar soft note and with 71% of its losses of the day intact. This soft close does little to inspire confidence and one might think that the markets are unlikely to encounter much better than a hesitantly steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1876 – 8 JUL 127.65 – 1.35 4th. June, 2013. This reversal in the fortunes of the London robusta coffee market has seen the arbitrage increase to 43.54 usc/Lb., which sees the London market offer a price discount of 33.75% to the New York arabica coffee market as of yesterdays close, which is a positive factor in terms of consumer market demand for robusta coffees. It is however with the world robusta coffees supply significantly tighter than arabica coffee supply, that might well narrow once again and one might see this market be looking to some degree of recovery and buoyancy. With the month of May passed the first of the months export reports has come from Central America, with Honduras reporting that the countries coffee exports for the month were a marginal 4,257 bags or 0.67% higher than the same month last year, at a total of 638,983 bags. This modest rise follows many months of near to even exports with the cumulative exports from Honduras for the first eight months of the present October 2012 to September 2013 coffee year being 92,643 bags or 2.5% lower than the same period in the previous coffee year, at a total of 3,615,677 bags. This flat export performance from Honduras was to have been expected, as the incidence of Roya or Leaf Rust infestation in the country has dented the recently completed new crop potential for the country, which has seen what was initially expected to be a larger crop, prove to me marginally lower that the impressive large 2011/2013 harvest. There is nevertheless in terms of the consumer market demand more than sufficient fine washed arabica coffee supply from Honduras and their neighbours in Central America for the short to medium term, with the real focus now upon the damage that shall be caused by this problem to the potential of the next year end 2013/2014 crop. This next crop forecasted by many to be an overall 15% lower than the past crop harvest, which shall tighten up coffee supply from the region. The preliminary exports for the month of May from Brazil have reported that the countries coffee exports were 6.5% lower than the same month last year, at a total of 2.3 million bags. This lower export performance is despite the clear evidence of large volumes of unsold past crop arabica coffees, which is mostly due to complacency on the part of the consumer markets and some degree of internal market price resistance, as a result of the soft nature of the reference prices of the international market. Meanwhile there remains some degree of internal market price resistance within Vietnam, now that the reference price of the London robusta coffee market have softened and albeit early in the month, traders in Vietnam are forecasting a modest export performance for the month of June, which they estimate shall record exports of between 1.5 to 1.83 million bags. Such a slow export performance one would suggest, shall reduce the volumes of price fixation hedge selling over the London market, which shall assist to provide some degree of buoyancy for this market. Sumatra which is the main coffee producing island of Indonesia have reported that the islands robusta coffee exports for the month of May were 220,559 bags or 141.46% lower than the same month last year, at a total of 376,481 bags. There has however with the soft nature of the reference prices of the London market been some degree of internal market price resistance in Indonesia and one might think that the export volumes for the month of June which should traditionally increase, might prove to be flat against this improved performance in May. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 6,350 bags yesterday, to register these stocks at 2,750,027 bags. There was meanwhile an additional 3,230 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 15,312 bags. The commodity markets had an overall more positive day yesterday against the news of weaker manufacturing data from the U.S.A., which had a negative effect upon the value of the U.S. dollar. The Oil, Natural Gas, Cocoa, New York arabica Coffee, Cotton, Copper, Wheat, Soybean, Gold, Silver, Platinum and Palladium markets had a day of buoyancy, while the Sugar, London robusta Coffee, Orange Juice and Corn markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.81% higher, to see this Index registered at 532.33. The day starts with the U.S. Dollar showing some early buoyancy and trading at 1.530 to Sterling and 1.306 to the Euro, while Brent Crude has taken a softer track and is selling at $ 101.50 per barrel. The New York market started the day yesterday with some early buoyancy and followed by a near to steady start for the London market, but with both markets soon faltering and heading back into negative territory as the morning progressed. The New York market did however soon encounter a support factor and moved back into positive territory, while the London market remained on its lower track. The afternoon and with the added influences of the positive nature of the macro commodity index in play saw the New York market maintain its positive stance and meanwhile the London market only partially recovered from its losses of the day. The London market continued to end the day on a softer track, but having recovered 57% of its earlier losses, while the New York market ended the day taking a positive stance and with 83% of its gains of the day intact. This close might be seen to be positive for sentiment, but with perhaps the steadier U.S. dollar due to limit the upside potential for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1884 – 9 JUL 129.00 + 1.95 3rd. June, 2013. The latest Commitment of Traders report from the New York fine washed arabica coffee market has seen the shorter term Managed Money Fund sector of the market increase their net short sold position within this market by 90.63% in the week of trade leading up to Tuesday 28th. May, when this net short sold position was registered at 18,270 Lots. Over the same period the longer term in nature Index Fund sector of this market decreased their net long position within the market by 1.1% to register a net long position of 55,995 Lots, on the day.
During this week of trade the Non Commercial Speculative sector of the New York market is seen to have increased their net short sold position within the market by 45.47%, to register a net short sold position of 32,439 Lots. This speculative net short sold position which is the equivalent of 9,196,312 bags is likely to have been little changed in the mixed and erratic trade that followed last week and likewise, the Managed Money Funds can be expected to have been little changed.
Meanwhile with the speculative net short position having risen as at Tuesday last week to a six week high, it might prove to be supportive for speculative sentiment for early this week. Likewise it might encourage some degree of consumer roaster buying support to come into play, as many roasters might wish to take advantage of what they might see to be a short term low for the market. There is however still the negative factor of the catch up stock selling from Brazil hanging over the market and while there is possibly the potential of some industry and speculative buying support now under the market, one would think that there remains a nearby ceiling to any resulting rally.
The International Coffee Organisation have reported that global coffee exports for the month of April were 4% higher than the same month last year, at a total of 9.6 million bags. This positive month contributes to the official ICO global exports for the first seven months of the present October 2012 to September 2013 coffee year being 7% higher than the same period in the previous coffee year, at a total of 65.98 million bags.
What is interesting in terms of these overall April export figures announced by the International Coffee Organisation is that the surge in market share for the robusta coffees has slowed, with the reported robusta coffee exports for the month only accounting for 35.42% of total exports. This is well down from some of the last quarter of last year, when robusta coffee exports were surging to levels of a 45% share, of total coffee exports. One might suggest however that it is not really an indication of a dramatic change in the consumer industry usage of robusta coffees, but more that while the industry is holding more stocks of now relatively inexpensive arabica coffees, that they are presently living hand to mouth with limited stocks of robusta coffees.
With the growth in world consumption being heavily weighted to the Asian markets for the present, Nestle continue to invest in spurring on production within the coffee growing markets where they operate. In this respect they remain very active in both China and the Philippines and with Nestle announcing a new program in the country where they plan to train over 90,000 farmers and distribute 25.2 million coffee seedlings, so as to buoy local production and supply for their local production facilities. This program targeting that Nestle shall within seven years raise to 70% their supply of domestic coffees, as against the 30% supply factor at present.
The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 4,694 bags on Friday, to register these stocks at 2,756.377 bags. There was meanwhile a 3,695 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 15,312 bags.
The commodity markets had an overall softer day on Friday and with the U.S. dollar tending to return to buoyancy and having some influence, but with some markets managing to buck the negative trend. The Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Gold, Silver, Platinum and Palladium markets had a softer day, while the Coffee, Wheat, Corn and Soybeans markets had a day of buoyancy. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.50% lower, to see this Index registered at 528.06. The day starts with the U.S. Dollar tending steady and trading at 1.524 to Sterling and 1.3024 to the Euro, while Brent Crude has taken a softer track and is selling at $ 100.06 per barrel.
The New York market started the day on Friday on a positive note and followed by a similar but more hesitant start for the London market. The afternoon however saw the New York market lose its way and head back into negative territory, with the London market coming under similar pressure and following suit. There was however underlying support and particularly so for the New York market which shrugged off the negative influences of the macro commodity index, with both markets moving back up into positive territory and with the London market ending the day with 75% of the gains of the day intact and the New York market ending the day with 60% of the gains of the day intact. One might think that this positive close and with the corresponding indications that both markets might be a bit over sold and near their lows, that it shall inspire a steady to buoyant start for the markets today against the prices set, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
JUL 1893 + 9 JUL 127.05 + 1.20 SEP 1923 + 3 SEP 129.15 + 1.25
NOV 1941 + 2 DEC 132.60 + 1.25
JAN 1954 + 1 MAR 136.05 + 1.30
MAR 1967 – 1 MAY 138.00 + 1.25
MAY 1975 – 1 JUL 139.80 + 1.15
JUL 1987 unch SEP 141.60 + 1.20
SEP 2001 unch DEC 143.60 + 1.20
NOV 2007 unch MAR 145.50 + 1.25
JAN 2007 unch MAY 147.00 + 1.25
31st. May, 2013. In terms of such stocks and despite the many earlier scare stories there remain good volumes of new crop stocks within Central America and Mexico, while the production levels in Colombia continue to recover and are not joined by a new Peru crop that is in full harvest, which can be expected to exceed 4.2 million bags. These fine washed arabica coffees coming steadily to the market along with the large stocks of 2013 crop Brazil natural arabica coffees, which are soon to be joined in only a few weeks, by a further 28 to 29 million bags of new crop natural arabica coffees and an additional 6 million bags of washed and semi washed arabica coffees. These Central and South America arabica coffees are aside from the smaller volumes of new crop washed arabica coffees from Africa and Asia, with the new Papua New Guinea, Burundi and Rwanda crops now coming to the market, over and above the stocks in of washed and natural arabica coffees still lying in Ethiopia and India and the new crop coffees that are due from Kenya and Tanzania from September onwards. Thus consumer market arabica coffee buyers of which the majority are now heading into their slower summer holiday season, remain complacent and step down buyers and are thus providing no encouragement for the speculative sector of the New York market. Life is not so desperate for the robusta coffee farmers as while there are still relatively fair stocks of new crop robusta coffees lying in Vietnam, Indonesia, India, Uganda and the Ivory Coast, the past few years of rising consumer market usage of higher percentages of lower priced robusta coffees in their blends, has resulted in a close to even supply and demand for such coffees. Thus while the reference prices of the London market have turned softer, the prices still remain profitable for the majority of origin farmers and these producers are not experiencing the degrees of panic that now prevail within the majority of the arabica producing countries. It is perhaps especially difficult for the farmers within the Central American region, where the influences of Roya or Leaf Rust have dented their recent new crop volumes and therefore with lower yields the resulting higher unit costs of production. This factor coming in at the same time as the need to counter Roya has significantly increased their farm input costs, so as to try to combat the disease and to bring in at least a reasonable new crop that shall start at the end of this year. A new crop that is potentially going to be approximately 15% lower for the Mexico and Central American region, which unless there is some significant recovery for the reference prices in New York, shall be a loss making crop for many farmers. As it shall be for the higher cost commercial arabica coffee farmers, in East Africa and India. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 3,117 bags yesterday, to register these stocks at 2,761,071 bags. There was meanwhile a 4,300 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 11,617 bags. The Certified robusta coffee stocks held against the London market are seen to have decreased by 46,500 bags or 2.19% in the two weeks of trade leading up to Monday 27th. May, when these stocks were registered at 2,074,667 bags. This being a relatively modest stock level, in terms of providing some degree of nearby insurance for consumer market roasters, should there be any hiccups in origin robusta coffee supply. The commodity markets failed to gain follow through support from the further decline in the value of the U.S. dollar yesterday, as speculators foresee that following the weaker than expected GDP growth for the first quarter of this year, shall force the Federal Reserve to actively continue with their monetary stimulus. The positive nature of the weaker dollar being countered by the negative cloud hanging over the markets, with flatter nature of Chinese and Indian growth, while the Euro zone provides repetitive bad economic news. The Oil, Natural Gas, Sugar, Cocoa and Copper markets were steady, while the Orange Juice, Gold, Silver, Platinum and Palladium markets had a day of buoyancy, while the Soybeans market tended softer and the Coffee, Cotton, Wheat, and Corn markets had a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.11% lower, to see this Index registered at 530.70. The day starts with the U.S. Dollar tending to steady over yesterday’s lows and trading at 1.522 to Sterling and 1.304 to the Euro, while Brent Crude is taking a sideways track and is selling at $ 101.70 per barrel. The New York market started the day yesterday with hesitant buoyancy in thin trade, while the London market started the day on an immediate downside track. The buoyancy within New York was however short lived and this market entered the afternoon heading deep into negative territory, which was a softer track that was despite the lack of selling pressure from Brazil, who was taking a public holiday. The London market did however pick up from the lows during the afternoon and while ending the day on the soft side, having recovered 71.5% of the earlier losses of the day, while the New York market tended to take a sideways track following its decline in the early afternoon, to end the day on a soft note and with 73% of the earlier losses of the day intact. This soft close is unlikely to inspire much confidence and one might once again expect to see only near to steady start for the New York market and perhaps a steady to buoyant start for the London market for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1844 – 16 30th. May, 2013. Meanwhile whilst the U.S. Department of Agriculture had earlier in the year appropriated first quarter dry weather as a reason to forecast the next October 2013 to December 2013 harvest in Vietnam to be 8% lower than the past crop at a total of 22.9 million bags, there are many within the local trade who dispute the negative effects of this weather. The first quarter of the month is anyhow the dry season for the country and with the prevailing wet season having actually started a week or two early, the private forecasts now indicate that with evidence of good new crop development, that the next crop shall potentially match the past crop. The question is however what shall be the new crop, as experience has shown over the past couple of years that Vietnam manages to come forth with crops that far exceed expectations. Thus one might firstly assume that even the reliable U.S. Department of Agriculture is being overly conservative in its forecasts and therefore, a new crop of in excess of 25 million bags is on the cards for the end of the year. Brazil started to close down yesterday afternoon as business looked to today’s Corpus Christi public holiday which shall for many businesses become a long weekend holiday, with many taking tomorrow off as well. This shall temporarily reduce the price fixation hedge selling pressure of the New York market, which one might think to allow for a degree of buoyancy for the market to come into play. The Statistics Bureau in Brazil have announced a surprisingly low 0.6% first quarter Gross Domestic Product growth for the first quarter of this year, which might have had some influence upon the countries governments announcement of a 20% increase in the total value of special low interest credit lines (now reduced to 4.5% per annum) that shall be offered to the countries agricultural sector. This fund that shall now total the equivalent of 67 billion U.S. dollars shall not only be used for purposes of low interest farm support loans, as it is intended that approximately 17.86% of the fund shall be used to increase warehouse capacity within the farming districts and to thus assist in the holding of produce stocks. There has so far aside from the availability of relatively inexpensive finance to hold stocks been any significant support for the countries arabica coffee farmers, who are now entering their new crop with in excess of 20% of their last 2012 harvest still in stock. However there is so far no indication that the Brazil Monetary Council at the month end meeting shall do anything significant to buoy coffee prices, as the only way to really make a significant difference, would be for the government to take the unlikely steps to buy in remove stocks from the market. Hurricane Barbara has hit the South West Pacific coast of Mexico and brought with it heavy rains over many of the country’s coffee districts, but with these rains of no threat to the prospects for the next year end start to the new crop. It is rather a beneficial event in terms of the coffee farmers, as it brings good supportive rains to the farms, for the development of this next crop. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 1,995 bags yesterday, to register these stocks at 2,757,954 bags. There was meanwhile a 3,440 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 15,917 bags. The commodity markets selectively gained some support from the reversal in the fortunes of the U.S. dollar yesterday, but with this factor not sufficient enough to stop many markets from taking a negative track. The Oil, Natural Gas, Sugar, London robusta Coffee, Cotton, Copper, Corn, Soybean, Platinum and Palladium markets had a softer day, while the Cocoa, New York arabica Coffee, Orange Juice, Wheat, Gold and Silver markets showed buoyancy for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.09% higher, to see this Index registered at 531.31. The day starts with the U.S. Dollar tending softer and trading at 1.516 to Sterling and 1.297 to the Euro, while Brent Crude is tending softer and is selling at $ 101.65 per barrel. The New York market started the day yesterday on a hesitantly near to steady note, which was followed by a similar near to steady start for the London market which almost immediately turned softer. The afternoon brought with it some hesitant buoyancy within thin trade for the New York market, while the London market continued on its negative sideways track. As volume started to build within the New York market however, the earlier buoyancy came under pressure and the market started to trade either side of the previous day’s closing levels, while the London market maintained its sideways track. The London market continued on its flat and negative track and to end the day near to its lows and with 84% of its losses of the day intact, while offering a 32.81% price discount to the conversely buoyant New York market. The New York market meanwhile picked up a little steam later in the afternoon and returned into positive territory to end the day on a modestly positive note and with 74% of its gains of the day intact. This positive close in New York and with the softer dollar in play and the somewhat oversold nature of the London market might be supportive for a steady to buoyant start for trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1860 – 30 29th. May, 2013. Following weeks of dry weather in Brazil, many of the main central and southern arabica coffee districts are presently experiencing rains, which shall assist to buoy the ground water retention levels and reduce stress for the coffee trees, which are presently in the early stages of the new crop harvest. It has however still been an overall dry month for these coffee farmers as so far most districts are reporting rainfall that is below their monthly average. While the forecasts are that following this week’s rains that are still in progress, June shall start off with a return to dry weather that shall inspire increased harvest activity. Meanwhile with the Brazilian arabica coffee farmers already producing approximately 5 million bags of their coffees as fully or semi washed coffees, one might expect that the evidence of declining washed arabica coffee supply from Central America, shall inspire more farmers to look to using washing stations upon their traditional natural process farms. This might as a guess, see washed and semi washed Brazil arabica coffee supply increase from within this new harvest to closer to 7 million bags, out of a forecasted 35 million bags of new crop arabica coffees. The Council of Green Coffee exporters in Brazil have estimated that with rising demand for arabica coffees to supplement tighter supply from the next Central American crop that Brazil shall export between close to 32 million bags from July 2013 to June 2014. Therefore with carryover stocks of close to 9 million bags, a new crop of 52 million bags and a domestic consumption of 21 million bags, this might suggest a somewhat bearish for market sentiment carryover stock of approximately 8 million bags into next year’s biennially bearing larger new 2014 crop. Brazil takes its Corpus Christi public holiday on Thursday 30th. May, which shall see many coffee exporters taking off Friday 31st., so as to enjoy a long weekend. Thus one would think that there might be some active price fixation hedge selling coming into play later in the day today, as exporters look to fix in pre long weekend sales. Albeit that the soft nature of the reference prices of the New York market shall make it difficult for exporters and farmers to come to agreement on prices, as for many farmers the resulting offers shall be threatening to profitability for their coffee stocks. The United States Department of Agriculture have forwarded a report that indicates that due to the damaging effects of Roya or Leaf Rust for a large percentage of the coffee farms in Costa Rica, that the recently completed new crop was 110,926 bags or 6.23% lower than the previous crop, at a total of 1,669,532 bags. This issue of Roya and with many farmers now having to prune back the more severely affected patches of coffee trees, they foresee shall see the next October 2013 to February 2014 harvest bring in a further 250,616 bags or 15% decline from the present crop, to see the next crop total only 1,418,916 bags. This news and the further confirmation of the problems being encountered within the region with Costa Rica’s neighbours Guatemala, El Salvador, Honduras and Nicaragua likewise suffering in varying degrees from Roya, has not had any effect so far, upon the speculative sentiment with the soft New York market. This market reacting rather, to the negative issues of large Brazil carryover arabica coffee stocks into a potentially new good crop and a significant approximately 2 million bags increase in fine washed arabica coffee supply from Colombia, for this year. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 50 bags yesterday, to register these stocks at 2,755,979 bags. There was meanwhile a 855 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 19.357 bags. The commodity markets gained some support from the news of business confidence in the U.S.A. reaching a five year high, but with the firmer nature of the U.S. dollar tending to blunt the support factors. There was also some caution on the part of many players, as there remain concerns over growth prospects for China. The Oil, Copper, Orange Juice, Corn, Soybean, Platinum and Palladium markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Cotton, Wheat and Gold markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% higher, to see this Index registered at 530.81. The day starts with the U.S. Dollar still showing its renewed muscle and trading at 1.502 to Sterling and 1.285 to the Euro, while Brent Crude is tending softer and is selling at $ 103.55 per barrel. The New York market started the day yesterday after the long weekend with some quiet and hesitant buoyancy, while the London market kicked off the day modestly softer. The more active afternoon’s trade however saw the New York market drift back into negative territory, while the London market extended its losses. The London market continued to wallow in the doldrums and carried on to end the day near to its lows and with 94% of its losses of the day intact, while the New York market managed to bounce back partially in late trade and ended the day on a soft note, but having recovered 45% of its earlier in the day’s losses by the close. This soft close does little to inspire confidence, but one might expect that there might be a cautiously steady start due for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1890 – 32 27th. May, 2013. During this week of trade the Non Commercial Speculative sector of the New York market is seen to have increased their net short sold position within the market by 93.39%, to register a net short sold position of 22,299 Lots. This speculative net short sold position which is the equivalent of 6,321,668 bags is likely to have since been increased creased in line with the negative trade that followed last week and likewise, the Managed Money Funds can be expected to have again increased their net short sold position within the market. The Government Statistical Office in Vietnam with the month of May export registrations in hand have estimated that coffee exports of mostly robusta coffees for the month shall be 46% lower than the same month last year, at a total of 1.833 million bags. This figure if proved to be correct would mean that the countries green coffee exports for the first eight months of the present October 2012 to September 2013 coffee year shall be 5.3% lower than the same period in the previous coffee year, at a total of 18.08 million bags. There is meanwhile as is traditional a tremendous disparity in the estimates on the completed new crop in Vietnam with the official state figure at its usual conservative figure of 20 million bags, while the well-respected United States Department of Agriculture has a figure of 24.17 million bags and a survey of private traders in the country, have put forward an average figure of 25 million bags. Thus it is very difficult to assess the export potential from Vietnam for the last four months of the present coffee year, but with the 18 million bags exported so far during this coffee year possibly including as much as 1.5 million bags of carry-over stocks, there is the potential for exports of a further 6 million bags during the June to September period. What is noticeable is that the General Statistical Office in Vietnam has reported that the areas planted out under coffee in the country had increased last year by 6.12%, which follows a reported 5.61% increase the previous year and a likewise 3.36% for 2009. Thus one would think that with new coffee trees requiring at least two years to come into production, that the prospects are for steadily rising crop levels within Vietnam, for the foreseeable future, The country presently produces a ratio of 96 to 4 robusta and arabica coffees, but with higher yields coming from the robusta farms, the land under coffee might well be closer to a 93 to 7 ratio of robusta and arabica coffees. The National Cocoa and Coffee Board in the Cameroun have reported that the countries robusta coffee exports for the month of April were 30,917 bags or 35.69% lower than the same month last year, at a total of 55,717 bags. They have likewise reported that the countries arabica coffee exports for the month was 1,500 bags or 38.46% lower than the same month last year, at a total of 2,400 bags. There are however some questions on the relatively very modest levels of arabica coffee from the Cameroun, as while the robusta coffee farming sector dominates overall coffee farming in the country, there is a constant flow of small consignments of arabica coffee being smuggled into neighbouring Nigeria. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 2,455 bags on Friday, to register these stocks at 2,756,029 bags. There was meanwhile a 1,720 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 18,502 bags. The commodity markets ended last week on an overall softer stance and with many players perhaps looking to the long weekend that comes with the Memorial Day holiday in the U.S.A. and the Spring Bank holiday in the U.K. today. The U.S. Oil, Natural Gas, Copper, Orange Juice, Wheat, Corn, Gold, Silver and Platinum markets tended softer and the Cocoa, Coffee, Soybean and Palladium markets had a soft day, while the Brent Oil and Sugar markets had a day of buoyancy. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.32% lower, to see this Index registered at 530.00. The day starts with the U.S. Dollar near to steady and trading at 1.513 to Sterling and 1.293 to the Euro, which with the holiday today is unlikely to change much until trade tomorrow. The New York market started the day on Friday with some hesitant buoyancy and followed by a softer start in the London market, which was soon joined by declining value for the New York market which drifted back into negative territory. Both markets continued to decline and despite a spell of corrective support for the New York market during the afternoon to recover some losses, the London market remained on its sideways negative track to end the day on a soft note and with 70% of its earlier losses of the day. The New York market with perhaps the negative influences of the macro commodity index having some influence slipped back again from its partial recovery and continued to end the say on a soft stance, with 86% of the earlier losses of the day intact. Both markets shall however be closed today and this soft close shall only impact upon trade tomorrow, which is most likely to take a cautious and hesitantly steady to buoyant track for early trade tomorrow, against the prices set on Friday, as follows: MAY 1922 – 32 24th. May, 2013. The situation is a little different in Colombia where the farmers are into their mid-year smaller Mitaca crop, as with the minimum price support program in place, the softening value of the New York market is not having as much of an effect at the farm gate. Despite this and in line with the rising asking differentials for neighbouring Central America, there is also some small degree of buoyancy in the differentials demanded for new business by exporters in Colombia. The northern districts of Brazils conilon robusta coffee crop, which has been forecasted at 16 million bags is now approximately 47% harvested and thus, there is a good supply of new crop coffees coming in to fuel the countries domestic market, which can be expected to absorb 90% of these robusta coffees. These northern districts have not overall had the same near perfect rain conditions as have been experienced by the central and southern arabica coffee districts over the past six months and farmers are talking of only approximately 80% of the beans are screen 13 up, as opposed to an approximate 90% factor for the previous crop. This decline in the percentage share of bolder beans has some degree of negative impact upon yields and one can expect that while not foreseen to be a problem, it shall keep export volumes of these Brazil robusta coffees tight into the coming year. Meanwhile the central and southern arabica coffee districts of Brazil with a dry month so far are getting very close to the starting their new harvest and with some small volumes already being picked, but with wide spread wetter weather forecasted for next week and with farmers not wishing to harvest and dry new crop cherries under such conditions, it can be expected to cause interruptions in the harvest. This is however not a problem as traditionally exporters do not start shipping new crop coffees until later on in July and with Brazil farmers and cooperatives still holding good stocks of past crop arabica coffees of approximately 9 million bags, there is more than sufficient coffee to satisfy market demand. The technical recovery and the resulting halt in the slide in the value of the New York market during yesterday’s trade, started to attract some catch up consumer market industry buying and price fixation support during the afternoon yesterday. This support being perhaps further inspired by the thoughts of both the good three year lows value and the prospects of the forthcoming long weekend for the markets, with the New York closed for Memorial Day and the London market closed for Spring Bank holiday on Monday. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 1,783 bags yesterday, to register these stocks at 2,753,574 bags. There was meanwhile a larger 5,377 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 20,222 bags. The commodity markets were in receipt of some supportive news yesterday, with the U.S. Federal reserve confirming that there is no immediate risk of ditching the economic stimulus measures that are presently in play. There were however continued concerns over the weaker manufacturing data from China, which is having a negative impact upon selected markets. There was however some degree of support coming forth, in line with the U.S. dollar losing a little of its recent muscle. The Sugar, New York arabica Coffee, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Palladium markets had a day of buoyancy, while the Natural Gas and Platinum markets were steady and the Oil, Cocoa, London robusta Coffee, Cotton and Copper markets had a softer days trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.12% higher, to see this Index registered at 531.71. The day starts with a steady U.S. Dollar in play and trading at 1.510 to Sterling and 1.292 to the Euro, while Brent Crude is showing some hesitant buoyancy and is selling at $101.20 per barrel. The New York market started the day yesterday with some early low volume buoyancy, but followed by an immediately softer start for the London market. The New York market took a couple of dips back into negative territory during the late morning and early afternoons trade, while the London market extended its early losses of the day. The New York market did however once the Americans came into play and with volumes of trade increasing, move back up onto a solid positive track and seemingly had some influence upon sentiment within the London market which recovered 75.5% of its earlier in the day’s losses by the close. This was followed by further buoyancy for the New York market, which added to its gains and ended the day on a hesitantly positive note and with 48% of the earlier in the day’s gains intact. This close was however little better than something of a correction following the previous days soft close in New York and one might expect that there shall be little in the way of excitement and little better than a steady start for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1954 – 12 23rd. May, 2013. The reality in terms of the incorrectly reported exports for the month of April, is that with the Dominican Republic, Colombia and Peru aside, Mexico and the Central Americans alone exported 71,978 bags or 3.7% more coffee during the month, to total exports of 2,017,169 bags. This figure in terms of the figure used to indicate overall lower exports for the month, would indicate that Dominican Republic, Colombian and Peru exports for the month, only totalled an unrealistic 72,831 bags. Thus one might presume that with the figure used being at least half a million bags incorrect, that there shall be a corrective report due that shall quote combined export figures of in excess of 2.6 million bags. The provisional port data from the ports of Abidjan and San Pedro in the Ivory Coast indicates that the countries coffee exports for the first seven months of the present October 2012 to September 2013 coffee year are 45,083 bags or 7.67% lower than the same period in the previous coffee year, at a total of 542,733 bags. This lower performance one would suggest is not really related to a recently completed dismal crop, but more so to some degree of price resistance to the decline in the reference prices of the London robusta coffee market, which has slowed sales. In this respect, we make note that the forecasts from trade and industry players have been for the country to export well in excess of 1.5 million bags, during the present coffee year. While the month of May is a traditionally dry winter month for the main Brazilian coffee districts and with rainfall averaging only approximately 50 mm for the month, the majority of the main coffee districts have so far reported no rains over the past three weeks. This is with good rains not a problem, as the ground water retention levels would still be good, while the prevailing dry weather is rather a positive factor, in that it is assisting to accelerate the maturity of the new arabica coffee crop cherries. Albeit that with the start of this new arabica coffee harvest that shall start building up in volume next month, is going to bring more pressure upon the farmers and cooperatives who still have close to 9 million bags of past crop stocks at hand. The issue of these Brazil arabica coffee stocks and with another good crop forecasted that would indicate surplus Brazil arabica coffee supply into at least 2016, is a bearish factor for the market and has impacted aggressively in late trade in New York yesterday, with the market falling back to prices last seen over three years ago, in March 2010. This rather dismal value and with the market breaking through the bottom of the recent and already soft trading range, might well see the farmers in Brazil and with the new arabica coffee crop starting to come in, going to their government, for more aggressive price support programs. This issue of supportive programs is due to be discussed during the regular month end meetings of the countries Monetary Council, but the only solution would really be related to the state funding of retention stocks and thus removing coffee from the market, which would for the present, seem to be an unlikely scenario. Logically should the Brazil government come forth with such support which would buoy the prices in the international market and for all coffee producers in general, thus encouraging more production and finally with rising stocks in hand, it would just delay the negative effects of the fundamental of surplus world arabica coffee supply. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 3,871 bags yesterday, to register these stocks at 2,755,357 bags. There was meanwhile a 3,210 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 14,845 bags. The commodity markets were mixed yesterday with the Copper, Orange Juice, Wheat, Corn, Soybean and Palladium markets showing buoyancy, while the Natural Gas market was steady and the Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Gold, Silver and Platinum markets tended softer, with the New York arabica Coffee market tumbling out of bed and posting a 3.2% loss for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% lower, to see this Index registered at 531.06. The day starts with a firmer U.S. Dollar in play and trading at 1.502 to Sterling and 1.284 to the Euro, while Brent Crude is tending softer and is selling at $100.40 per barrel. The New York market started the day yesterday with some early low volume buoyancy and followed by a positive start in the London market, but with the New York market soon starting to lose its way and drifting back into negative territory for the early afternoon’s trade. This was followed by a short term dip for the London market and a recovery back into positive territory, while the New York market remained on its softer track and started later in the afternoon, to shed some more weight. The London market with the negative influences of the New York market in play dropped back into negative territory and ended the day on a soft note and with 75% of its earlier losses of the day intact, while the New York market started to trigger sell stops in late trade that saw the market extend its losses and end the day on a very soft note and with 95.5% of its losses of the day intact. This unexpected extremely soft close for the New York market cannot be good for confidence and one might expect a very hesitant and sideways track in thin trade is due for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1966 – 5 22nd. May, 2013. Meanwhile with coffee production on a recovery mode the Colombian Coffee Federation is looking at plans to further promote Colombian fine washed arabica coffee and not only within the traditional North American and Western European markets, but also within the wide range of new markets in South America, Eastern Europe, Middle East, Australasia and Asia. These promotional activities to include the expansion of the countries Juan Valdez coffee shop chain that presently has 172 coffee shops, of which 43 are operating within overseas countries. There has been an unofficial forecast yesterday from the United States Department of Agriculture, which has estimated that due to the Roya or Leaf Rust infestation in Central America and with 65% of the coffee farms in Costa Rica suffering from this disease, that the country can expect to see a 15% decline in production for the next October 2013 to March 2014 harvest. This next crop that follows what they report to be recently completed 6% lower than the past 2011/2012 harvest new crop, they foresee to fall to 1.42 million bags and to thus impact negatively upon coffee exports for the next October 2013 to September 2014 coffee year. A further unofficial United States Department of Agriculture report has with the new crop presently in harvest in India, forecasted that this new crop shall be little changed, at approximately 5.2 million bags. This crop with the country allowing for cheap imports from other producers to supplement export demand for value added Indian soluble coffee products, shall allow for the country to maintain its market share within the traditional markets for Indian coffees. With farmers and internal traders continuing to show price resistance to the softer prices that are dictated by the flat to soft nature of the reference prices of the London robusta coffee market, there is relatively slow selling activity out of Vietnam for the present. This resistance is expected by the countries traders to see exports for the month of May struggle to exceed 1.67 million bags and to perhaps fall on average to approximately 1.33 million bags per month, from June to September. Vietnam has however already reported exports for the first seven months of the present October 2012 to September 2013 coffee year to have been 623,397 bags or 4% higher than the same period in the previous coffee year, to total 16,208,333 bags of exports of mostly robusta coffees for the October to April period. Thus with trade forecasts for exports of close to 7 million bags for the final five months of the present coffee year, it would indicate the probability for exports to total 23.2 million bags for this coffee year, of which 22.5 million bags would be related to robusta coffees. These forecasted exports from Vietnam if one is to believe the figures would result in a dip in robusta coffee supply from the country, which despite increased supply from Indonesia and Uganda this year, shall maintain a tight hand to mouth market for the now more popular robusta coffees. Thus while the New York arabica coffee market remains under something of a dismal cloud of Brazil surplus arabica coffee supply, the prospects are for continued buoyancy for the London robusta coffee market for the foreseeable future. This London robusta coffee market following yesterdays mixed close, now offering a 31.36% price discount to the New York arabica coffee market. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 798 bags yesterday, to register these stocks at 2,751,486 bags. There was meanwhile a 4,159 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 11,635 bags. The commodity markets lacked directional input from the leading economies yesterday, while players await the latest news on policy that is due out of the Federal Reserve Bank of the U.S.A. today. The Oil, Cotton, Copper, New York arabica Coffee, Orange Juice, Wheat, Corn, Gold, Silver, Platinum and Palladium markets experienced a softer day, while the London robusta Coffee, Sugar, and Soybean markets showed buoyancy and the Natural Gas and Cocoa markets posted good gains. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% lower, to see this Index registered at 531.29. The day starts with the U.S. Dollar taking a sideways track and trading at 1.515 to Sterling and 1.291 to the Euro, while Brent Crude is tending softer and is selling at $102.90 per barrel. The New York market started the day yesterday in quiet trade with predictable buoyancy and followed by a firmer opening for the London market, but with the New York market running out of steam and slipping back into negative territory into the afternoon’s trade. This negative track for the New York market was followed by a dip for the London market that likewise slipped back into negative afternoon trade, but soon encountering something of a support base and a after an afternoon of erratic and mostly negative trade, to end the day with a recovery and something of a buoyant close. The New York market however never recovered from its despondent and bearish track and carried on to end the day on a soft note, with 83% of its earlier losses of the day intact. This close is unlikely to inspire much better than a hesitantly steady start for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1971 – 9 21st. May, 2013. Following the export reports from neighbouring Central American producers with increased volumes reported by Guatemala, Costa Rica, El Salvador and Nicaragua and a lower volume from Honduras, the National Coffee Organisation of Mexico have reported that the country’s exports in April were 16,432 bags or 4.42% higher than the same month last year, at a total of 387,867 bags. This positive figure does however follow a slow start to exports for the last quarter of last year and thus the cumulative exports from Mexico for the first seven months of the present October 2012 to September 2013 coffee year are still 51,376 bags or 2.99% lower than the same period in the previous coffee year, at a total of 1,667,107 bags. With all the April export reports from Central America and Mexico now in, the cumulative exports from this producer bloc that accounts for approximately 20% of world arabica coffee supply for the first seven months of the present October 2012 to September 2013 coffee year are seen to be 142,967 bags or 1.6% higher than the same period in the previous coffee year, at a total of 9,081,637 bags. This figure which is 7,579,754 bags or 45.49% less than the impressive 16,661,391 bags exported over the full 2011 to 2012 coffee year, thus indicates that so far coffee supply from the region remains on track to more than adequately satisfy consumer market demand for these fine washed arabica coffees. One must further comment that these marginally higher exports for the coffee year so far from Mexico and Central America are despite the negative effects of Roya or Leaf Rust that is being experienced within most of the Central American producers, which has been forecasted to have reduced regional production by approximately 2.7 million bags. These issues of Roya damage did however only become clearly evident three months into the new coffee year and during mid-new crop harvest for Guatemala and El Salvador who are the most affected of the producers and thus while overall regional coffee supply has so far not been dented, one might still expect to see a dip in regional supply by the end of this coffee year. This dip in supply however which might not be as high as the forecasted 2.7 million bags, can be expected to be countered by the prospects for an up to 2 million bags increase in fine washed arabica coffee supply from the steadily recovering Colombian crop. The prevailing improved Colombian coffee supply is now being joined by the new fine washed arabica crop from Peru, which is harvested over April to August and thus the emotive issues of Roya in Central America have yet to have any impact upon speculative sentiment within the related New York market. While the value of the New York market might be presently wallowing in the doldrums for the present and having an influence upon more affordable arabica coffee supply, the relatively buoyant London robusta coffee market still offers an attractive 32.7% price discount to the New York washed arabica coffee market. Thus with such a discount in hand that does likewise offer a fair discount of approximately 25% to the weight of Brazil natural arabica coffee stocks that hang over the market, there remains good demand for the relatively tight in supply robusta coffees from within the consumer markets. Thus one must assume that with the majority of the main consumer market roasters now being much more flexible in terms of blend components that it is unlikely that robusta coffees shall see their much improved share within the market being threatened, for the foreseeable future. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 5,418 bags yesterday, to register these stocks at 2,752,284 bags. There was meanwhile a 7,613 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 15,794 bags. The commodity markets experienced something of a whiplash recovery for the metals markets yesterday, but with the soft commodities despite a weakening dollar, having a flat day. The Gold, Silver, Platinum and Palladium markets were firm for the day and the Oil and Copper markets registered good buoyancy, while the Cocoa and Soybean markets remained in positive territory. The Natural Gas and Orange Juice markets were steady, while the Sugar, Coffee, Cotton, Wheat and Corn markets had a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.43% higher, to see this Index registered at 532.92. The day starts with the U.S. Dollar tending softer and trading at 1.525 to Sterling and 1.289 to the Euro, while Brent Crude is near to steady and is selling at $104.55 per barrel. Predictably following the soft nature of the coffee markets on Friday and with the majority of the European industry players on holiday yesterday, both the New York and London markets opened the day marginally softer. This remained the track into the afternoon’s trade, when further pressure started to come into play and to extend the losses for both markets and with the London market continuing to slide and to finally end the day very soft and having retained 94% of its losses of the day. There was however something of a late in the day recovery for the New York market which clawed its way back up from the lows and while ending the day on a soft note, did manage to recover 40% of its earlier losses of the day. The overall soft close does little to inspire but one might expect that with the Europeans back to their desks and including many leading coffee industry players and with the softer dollar in play, that light catch up price fixation buying into a thin market might encourage a degree of corrective buoyancy for early trade today, against the soft prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1980 – 27 MAY 133.85 – 1.75 20th. May, 2013. During this week of trade the Non Commercial Speculative sector of the New York market is seen to have decreased their net short sold position within the market by 44.42%, to register a net short sold position of 11,531 Lots. This speculative net short sold position which is the equivalent of a much reduced 3,268,987 bags is likely to have since been increased creased in line with the negative trade that followed last week and likewise, the Managed Money Funds can be expected to have again increased their net short sold position within the market. Following the export reports from neighbouring Central American producers with increased volumes reported by Guatemala, Costa Rica and El Salvador and a lower volume from Honduras, the Coffee Export Association of Nicaragua have reported that the country’s exports in April were 52,589 bags or 24.47% higher than the same month last year, at a total of 267,467 bags. This positive figure along with sales late last year of carryover stocks from the past crop has resulted in the cumulative exports from Nicaragua for the first seven months of the present October 2012 to September 2013 coffee year being 330,639 bags or 43.72% higher than the same period in the previous coffee year, at a total of 1,086,981 bags. The respected agriculture analysts Safras & Mercado in Brazil have reported that as at the end of the end of last week only 83% of the previous 2012 crops coffees had been sold, as against a five year average of 93% having been sold by this time of the year. This report and if one were to apply it against the largely accepted 2012 crop of 56 million bags, would indicate that only two weeks ahead of the official start of the new 2013 arabica coffee harvest, that farmers and cooperatives are still holding past crop stocks of approximately 9.5 million bags of mostly arabica coffees. The evidence of these Brazil arabica coffee stocks with the new crop so close on the horizon, continue to create a bearish cloud over sentiment within the New York arabica coffee market, which remains within a relatively soft trading range. The latest coffee export figures from Bank Indonesia indicate that coffee exports for March were 106.67% higher than the same month last year, at a total of 516,667 bags. This figure added to the higher export performances for the previous two months, would indicate that the cumulative exports for the first three months of this year were 850,000 bags or 113.33% higher than the same period in the previous year, at a total of 1.6 million bags. These exports with the country producing an approximate 85 to 15 ratio of robusta and arabica coffees would be expected to be heavily weighted towards the robusta coffees, but with last month having seen some degree of internal market price resistance, one might expect to see some slowing in the export volumes for April and May. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 2,275 bags on Friday, to register these stocks at 2,746,866 bags. There was meanwhile a 725 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 23,407 bags. The Certified robusta coffees held against the London market were seen to have risen by a very modest 19,500 bags or 0.93% in the two weeks of trade leading up to Monday 13th. May, to register these stocks at 2,121,167 bags on the day. The flat nature of these stocks was to have been expected, in terms of the relatively restrained price resistant origin selling that prevails, from the leading Asian producers. The commodity markets seesaw continued on Friday, with improved economic indicators from the U.S.A. and China coming into play. The markets did however with the U.S. dollar showing some muscle, show mixed fortunes for the day and ahead of a long weekend for most of the leading European countries, with many taking their Pentecost or Phingstmontag holiday today. The Oil, Natural Gas, Sugar, Cocoa, Copper, Corn and Soybean markets had a day of buoyancy, while the London robusta Coffee, Cotton and Palladium markets tended softer and the New York arabica Coffee, Orange Juice, Wheat, Gold, Silver and Platinum markets had a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.03% lower, to see this Index registered at 530.65. The day starts with the U.S. Dollar steady and trading at 1.519 to Sterling and 1.284 to the Euro, while Brent Crude is steady and is selling at $104.25 per barrel. The New York market started the day quietly firmer on Friday and followed by hesitant buoyancy for the London market, but with both markets coming under pressure into the afternoon’s trade. The New York market never recovered from its negative track and while this market continued to shed weight the London market managed to restrain its losses and continued to end the day tending softer, but having recovered 31% of its earlier losses of the day by the close. The New York market continued to suffer from speculative and technical selling pressure to end the day and the week on a soft note and with 95% of its losses of the day intact, which does little to inspire confidence. This overall soft close one might think, shall do little more than inspire a close to steady start for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 2007 – 9 MAY 135.60 – 2.75 17th. May, 2013. It is likewise the case within Vietnam, where the internal market price resistance is reflecting itself in positive export differentials being demanded by exporters, but with minimal impact upon the main industry players within the consumer markets, as they are mostly well covered with short to medium term forward contracts for the present. The question remains how long the farmers and internal market traders can resist the negative influences of the relatively soft London market, before they have to accept the reality of the market and start to release stocks to the exporters in higher volumes, which shall see the differentials start to ease. The authorities in Burundi have reported that export income from their April to August harvested 2012 crop was 8.3% higher than the previous 2011 crop, at a total of 66.3 million U.S. dollars. While a positive factor for the country, it has to be considered that this crop was 169,600 bags or 74.86% higher than the previous crop, at a total of 396,167 bags. Therefore in terms of unit prices, the soft nature of the reference prices of the New York market has had a severe impact upon the internal market prices. More of a concern for the coffee farmers in Burundi is that this year’s new coffee crop that is once again in a down year, is only forecasted to be approximately 217,000 bags, which shall be 179,167 bags or 45.22% lower than the past crop and is so far a crop, which shall be sold against a relatively soft and lacklustre New York market. Thus one might foresee that the Burundi coffee industry is due for a very tough economic year, which shall be mirrored in neighbouring Rwanda. The weather conditions in Brazil have been mostly dry and sunny over the main central and southern arabica coffee districts for the past three weeks, which is accelerating the ripening of new crop cherries and bringing forward the potential delivery of the large new crop. This is seemingly reflecting itself in the evidence of more active internal market trading activity, as exporters have been taking on good volumes of past crop arabica coffee stocks over the past week. It is not however the same for the new crop Brazil conilon coffees from the northern coffee districts of the country, as with little in the way of carryover stocks of these coffees into the new crop harvest, the farmers have been holding out for relatively premium prices for their new crop coffees. Thus with a much weighted demand for Conilon Robusta coffees from the over 20 million bags per annum domestic coffee market in the country, the farmers are able to restrain sales and add value to their new crop which is for the present, relatively unattractive in price for the consumer market buyers. The port reform bill for Brazils ports that had triggered the two day strike on the part of the stevedores within the three main export ports in Brazil earlier this week, was passed by the countries congress yesterday. This bill is designed to privatise and make more efficient much of the operations within the countries ports, but is seen to be threatening by the unions who fear job losses on the longer term. Thus one might expect that on the longer term, that there might be further strikes coming into play within the countries ports, as and when the dictates of the bill start to become reality. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 3,480 bags yesterday, to register these stocks at 2,744,591 bags. There was meanwhile a further 755 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 24,132 bags. The commodity markets were in receipt of some poor economic indicators from the U.S.A., with evidence of rising unemployment and slowing industry and housing growth, which had an impact upon overall confidence within many markets. Nevertheless the Oil, Copper, Soybean and Palladium markets had a positive day, while the Sugar, Coffee, Cotton, Orange Juice, Gold, Silver and Platinum markets tended softer and the Natural Gas, Cocoa, Wheat and Corn markets had a soft day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.42% lower, to see this Index registered at 530.81. The day starts with the U.S. Dollar steady and trading at 1.524 to Sterling and 1.286 to the Euro, while Brent Crude is showing early buoyancy and is selling at $103.95 per barrel. The New York market started the day quietly firmer yesterday, but followed by a relatively flat to soft start for the London market. The New York market held its buoyancy within an environment of extremely thin and lacklustre trade into the early afternoon, when with the negative influences of an overall soft macro commodity index in play, the market dipped back to join the London market in negative territory. The London market continued through the day on its softer track to end the day on a soft note, but having recovered 64% of its earlier in the day losses by the close, while the New York market mirrored this partial recovery from the earlier sell off, to end the day soft but with only 30% of its earlier losses of the day intact. This soft close but with some reasonable recovery from the earlier in the day losses might well restrain bearish activity on the opening of the markets and one might expect to see a steady to modestly buoyant start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 2016 – 11 MAY 138.35 + 0.35 16th. May, 2013. Thus in terms of stock in hand in North America as at the end of last month, these stocks would equate to at least the equivalent of a very safe and substantial 12.5 weeks of summer roasting activity. Even if one were to deduct the sometimes questionable in quality certified coffee stocks of the New York exchange held within the U.S.A. warehouses of the exchange, the overall North American stocks would still equate to at least 11.6 weeks of roasting activity and therefore with new coffees continuing to flow into the market, there is really no concern over foreseeable coffee supply for this large consumer marker of close to 25 million bags per annum. The evidence of these stocks and ahead of the potential surge of new crop coffee supply from Brazil that shall be added to the already substantial carryover stocks of mostly arabica coffees in this country, one must see to be a bearish factor for speculative sentiment within the New York market. Especially so as aside from Brazil there are still substantial Mexican and Central American new crop stocks still to come to the market, along with the new crop Colombian and Peru fine washed arabica coffees. There are concerns in Kenya over the significant 33.72% decline in the value of the country’s coffee sales for the first six months of the present October 2012 to September 2013 coffee year, which have been reported at 67.34 million U.S. dollars. This value of exports for the first half of the year is a disturbing sign, in terms of the budgeted sales for the coffee year of 215.2 million U.S. dollars, which did not anticipate the on-going soft nature of the reference prices of the New York market, against which the country’s coffees are sold. The added problem for Kenya that twenty five years ago produced close to 2.17 million bags of coffee per annum is that the relatively lower value does not assist the authorities in their bid to inspire recovery from the industry, which is expected to produce a 60.8% lower than the peak but 13.3% higher than last year, 850,000 bags of coffee for the present coffee year. This industry not only suffering from disappointment on the part of the small scale farmers in the potential returns from coffee, but also from a large percentage of the relatively higher yielding commercial farming sector of the industry, who have been selling coffee farms for urban development. The Customs Department in Vietnam have reported their updated April export figures of mostly robusta coffees, which they now estimate to have been 29.9% lower than the same month last year, at a total of 1.85 million bags. This decline which is well down on many private trade estimates has seen the cumulative exports for the first four months of this calendar year to be 16.3% lower than the same period last year, at a total for the four months of 9.8 million bags. This slowing of export volumes is not however seen to be any indication of shortages in available coffee, but is more related to the price resistance within the internal market in Vietnam, which has restricted the buying activity from within the consumer markets. Albeit that while there is no doubt that there remains surplus world arabica coffee supply, the overall world supply of robusta coffee remains relatively tight. The strike on the part of the stevedores within the three main export ports in Brazil came to an end yesterday and was seen to have had little impact upon export activity, over these two days of labour dispute. There is however still debate and union protest to some of the issues related to privatisation of port activities, which means that there are possibilities of further protest activities in the coming months. The Certified washed Arabica coffee stocks held against the New York market were seen to decline by 401 bags yesterday, to register these stocks at 2,741,111 bags. There was however a 1,210 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 23,377 bags. The commodity markets were in receipt of mixed signals yesterday, with positive economic figures coming out of Japan and modestly so from Germany and the U.S.A., which are being countered by slower growth in China and news that France has joined many of the other European countries by slipping back into recession. The Oil, Natural Gas, London robusta Coffee and Palladium markets showed buoyancy, while the Cotton, Cocoa, Sugar, Corn, Soybeans, Copper and Platinum markets tended softer and the New York arabica Coffee, Orange Juice, Wheat, Gold and Silver markets had a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.88% lower, to see this Index registered at 533.05. The day starts with the U.S. Dollar showing some buoyancy and trading at 1.521 to Sterling and 1.286 to the Euro, while Brent Crude is close to steady and is selling at $103.35 per barrel. The New York market started the day quietly firmer yesterday, but followed by a softer start for the London market. This latter market did however soon recover and head back up into positive territory and while London maintained its buoyancy from thereon, the New York market that seemingly was reacting to the later in the afternoon negative nature of the macro commodity index, slipped back into negative territory and started to trigger stop loss sell stops, to accelerate the losses. The London market continued to end the day on a modestly positive note and with 44% of its gains of the day intact, while the New York market ended the day on a very soft note and with 87% of its earlier losses intact. This soft close for the latter market is unlikely to inspire support and one might expect to see little better than a steady to soft start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 2027 + 22 MAY 138.00 – 3.65 15th. May, 2013. Weather forecasts that have indicated the possibility for some more aggressive cold fronts over Brazil this year are likely to cause a cautious stance to be taken by the speculative bears within the market for the coming weeks, albeit that the chance of severe frost damage for the main south and central arabica coffee districts is still seen to be unlikely. There is in terms of these frost factors the fact that these more vulnerable districts have recently been in receipt of relatively good late summer and autumn rains, which have assisted to build up the ground water retention levels, which assist the trees to counter the negative effects of mild cold snaps. But one can expect that there shall be some added caution in terms of the markets around the more vulnerable full moon periods over the Brazil winter season, that occur on the 25th. May, 23rd. June and 22nd. July. Yesterday saw a sudden walk out by stevedores within the three main export ports in Brazil, in protest to unexpected changes to the reform program to modernize the ports, which is related to privatisation. This short six hour strike at a time when the ports are already under severe pressure from a flood of commodity exports has not caused any disruption to exports but is threatening in terms of the possibility of further and longer term strikes, if there is not long term agreement between the authorities and the unions. There is positive speculation in terms of both the future coffee production and domestic coffee consumption from within Indonesia, with suggestions that there are already early forecasts for the next October 2013 to September 2014 coffee year shall be 3% higher than this year’s improved coffee crop, at a total of 11.2 million bags. There are however against this improved coffee supply, further forecasts for an over 15% increase in domestic coffee consumption, which is being reported presently at approximately 3.7 million bags and can be expected to rise to in excess of 4.07 million bags for the next coffee year. Thus in terms of Indonesian coffee supply to the consumer markets and with domestic consumption expected to continue to rise in the coming years, these reports would indicated flat supply for the foreseeable future. Meanwhile there is evidence of much improved farm husbandry on the part of many of Indonesia’s coffee farmers and new farms also coming into production, which would indicate that while the domestic consumption is on the rise, the potential production is likewise taking a positive track. Thus with domestic consumption proving to be something of an inspiration for the Indonesian coffee farmers, one might expect to see this already leading coffee producer maintain a positive growth track in the coming years and maintain its fourth place market share within the consumer markets. The Certified washed Arabica coffee stocks held against the New York market were seen to decline by 3,050 bags yesterday, to register these stocks at 2,741,512 bags. There was however a sharper 9,917 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 22,167 bags. The European warehouses of the New York exchange in Antwerp, Barcelona, Bremen and Hamburg presently account for 2,072,871 bags or 75.61% of these certified stocks, as against the relatively modest percentage being held within the U.S.A. based warehouses of the exchange, in Houston, Miami, New Orleans and New York. While in terms of the bags pending grading for this exchange, they are all being held within the European warehouses and thus despite the recent increase in costs that have been announced for the dominant Antwerp warehouses, there would appear to still be no incentive to tender coffees via the U.S.A. warehouses. The commodity markets remained under some pressure from the weak factory data for the month of April in China and from some uncertainty as to the direction that new economic data due this week from Europe, might dictate. The Oil, Sugar, New York arabica Coffee, Sugar, Cotton, Corn, Gold and Silver markets were softer, while the Sugar market was sharply lower against news of a bumper crop in Brazil, while the London robusta Coffee, Soybeans and Wheat markets were near to steady and the Natural Gas, Cocoa, Orange Juice, Platinum and Palladium markets had a day of buoyancy. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.10% lower, to see this Index registered at 537.81. The day starts with the U.S. Dollar showing some buoyancy and trading at 1.522 to Sterling and 1.291 to the Euro, while Brent Crude is steady and is selling at $102.65 per barrel. The New York market started the day quietly firmer yesterday and followed by a similar buoyant start for the London market, but with the New York market starting to come under pressure as the day progressed, to drift back into negative territory during the afternoon’s trade. The London market finally followed the negative track of the New York market but managed to recover by the close and to end the day near to steady, while the New York market ended the day on a soft note and having retained 90% of the losses of the day. This soft close for the New York market does not inspire much in the way of confidence and one might expect to see the New York market taking a steady to soft stance and the London market that has the fundamentals of tighter supply behind it taking as steady to buoyant stance for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 2005 unch MAY 141.65 – 2.90 14th. May, 2013. Following the positive April export figures from Guatemala and Costa Rica and the negative export figure from Honduras, neighbouring El Salvador have reported a modestly positive monthly export figure. In this respect, the El Salvador National Coffee Council has reported that the country’s exports for the month of April were 1,295 bags or 1.07% higher than the same month last year, at a total of 121,993 bags. However El Salvador has experienced a slow start to the present October 2012 to September 2013 coffee year and thus despite an improved performance last month, the cumulative exports for the first seven months of this coffee year are still 29,964 bags or 4.28% lower than the same period in the previous coffee year, at a total of 670,842 bags. The International Coffee Organisation have once again addressed the issues of Roya or Leaf Rust in Central America where Guatemala and El Salvador are the most affected of the Mexico and Central American fine washed arabica coffee producer bloc, with their latest assessment that this disease that first entered the region in 1979 has resulted in a 2.7 million bags or 17% decline in potential production from the recently completed crop. It has however to be noted that this official ICO new crop forecast is a conservative 15.88 million bags, whereas most private trade and industry forecasts had talked about a combined crop of closer to 18 million bags. Meanwhile with Colombia potentially looking at an approximately 2 million bags plus increase in their coffee supply for the present coffee year, this very much negates the dip in supply that is coming from the Mexico and Central American producer bloc. Earlier in the year the ICO has forecasted that the longer term negative effects of Roya for the Mexico and Central American producer bloc shall result in a 4 million bags dip in potential production for the forthcoming October 2013 to March 2014 harvest. Few would dispute such a figure, as aside from the disease itself, there shall be many farmers who shall take a more aggressive stance towards controlling the problem, by stumping or retuning badly effected trees and looking to take a gap year of lower input requirements, to look to a fresh growth recovery of the next 2014/2015 harvest and hopefully by then, to sell into an improved value market. There shall be a keen interest shown in the announcement later today by the Brazil government on the latest official new crop forecast, which can be expected as is tradition, to be a conservative discounted figure. In the meantime a poll taken from seven leading Brazil coffee cooperative, exporters and analysts has suggested that the new crop shall total 51.75 million bags. This figure is very much in line with earlier private trade and industry forecasts for a new crop of approximately 52 million bags, which against a combined export and domestic market demand of approximately 50 million bags, should result in a modest surplus. However with this small surplus added to carry over stocks of approximately 7 to 9 million bags of mostly arabica coffees, there is presently no fear over arabica coffees supply for the coming coffee year. The Ugandan Coffee Development Authority have following the recent months of improved exports and the good weather conditions that have supported the production that has fuelled these exports, increased their forecast for the present October 2012 to September 2013 coffee year. In this respect they have raised their earlier forecast by 6.7% to a figure of 3.2 million bags, which will see the country retain its dominant position as Africa’s leading coffee exporter. The Certified washed Arabica coffee stocks held against the New York market were seen to be unchanged yesterday, to register these stocks at 2,744,562 bags. There was however a 4,155 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 12,250 bags. The commodity markets were overall more settled yesterday, with the rise in the value of the U.S. dollar tending to falter. There remains however mixed signals from the flatter growth for the Chinese economy, which is countered by the improved employment data from the U.S.A., while many players await this week’s latest reports that are due out of the Euro zone. The Natural Gas, Cocoa, Coffee, Orange Juice, Copper, Wheat, Corn, Soybean, Silver and Palladium markets showed buoyancy, while the Oil, Sugar, Cotton, Gold and Platinum markets had a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.43% higher, to see this Index registered at 538.33. The day starts with a softer U.S. Dollar trading at 1.532 to Sterling and 1.302 to the Euro, while Brent Crude is steady and is selling at a steady $102.60 per barrel. The New York market started the day quietly softer yesterday and followed by a similar softer start for the London market, but with both markets soon recovering in quiet trade into positive territory. This recovery was sustained throughout the rest of the day, albeit that the New York market did come under some price fixation pressure within the afternoon’s trade. The London market continued to end the day on a positive note and with 83% of its earlier gains of the day intact, which was followed by a positive close for the New York market which ended the day with 67% of the earlier in the day’s gains intact. This overall positive close can be expected to inspire a steady start for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 2005 + 24 MAY 144.55 + 0.75
13th. May, 2013.
The latest Commitment of Traders report from the New York fine washed arabica coffee market has seen the shorter term Managed Money Fund sector of the market decrease their net short sold position within this market by 53.29% in the week of trade leading up to Tuesday 7th. May, when this net short sold position was registered at 8,812 Lots. Over the same period the longer term in nature Index Fund sector of this market decreased their net long position within the market by 0.24% to register a net long position of 56,744 Lots, on the day. During this week of trade the Non Commercial Speculative sector of the New York market is seen to have decreased their net short sold position within the market by 32.94%, to register a net short sold position of 20,745 Lots. This speculative net short sold position which is the equivalent of a much reduced 5,881,116 bags is likely to have been marginally decreased in line with the mixed trade that followed last week and likewise, the Managed Money Funds can be expected to have marginally decreased their short position within the market. One might suspect however that following the evidence of the sharp negative correction in the Managed Money and Non-commercial short sold positions within the New York market, that some be inspired to take the short selling route for trade today. The potential for a negative track might also be inspired by the passing of the relatively modest support program that was announced by the Monetary Council in Brazil, which has set a relative modest minimum price for arabica coffees of the equivalent of 115.30 usc/Lb. This price which is anyhow not compulsory for internal market coffee sales, is not expected to not do much to stall the steady flow of the large volumes of unsold 2012 crop arabica coffee stocks into the market and ahead of yet another, good to modestly surplus new arabica coffee crop that is starting to be harvested shortly. Meanwhile the New York arabica coffee market ended the day on Friday with the value of the London robusta coffee market offering an attractive 52.33 usc/Lb or 36.23% price discount, which is a factor that continues to encourage the main industry players within the price competitive consumer markets, to look to ways to take advantage of the use of increased volumes of robusta coffees. Thus for the present one cannot foresee any reason to believe that the robusta coffees that only a few years ago accounted for less than 35% of global coffee exports and still well on track to very shortly account for a 45% market share, which is unless there are some unforeseen disasters to reduce robusta coffee supply, something of an irreversible market share track for these coffees. The internal markets in both Vietnam and Indonesia are both experiencing price resistance, as farmers and internal traders look to pressure some more value out of the short sold millers and exporters within both countries. This is slowing the short term export selling activity for Asian robusta coffees, as exporters bid to cover their existing export commitments and look for positive differentials of new business. It is however the slow summer roasting season for the main northern hemisphere consumer markets and with most industry players already well covered with short to medium terms contracts in hand, there remains no concern or excitement within the robusta coffee market. The Minister of Agriculture in Colombia who had taken the lead in negotiating more favourable price support programs for the countries coffee farmers in February has announced his intent to resign on Friday, which would indicate that as the country heads into its smaller Mitaca harvest, that there is no chance of further price support inputs for the short term. Thus the Colombian National Coffee Federation can only look to the potential for increased yields to assist to reduce the unit costs of the new crop coffees, so as to along with the existing price support program, to bring some value for the farmers. The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 432 bags on Friday, to register these stocks at 2,744,562 bags. There was a further decrease of 4,305 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 8,095 bags. The commodity markets mostly reacted negatively to the rising value of the U.S. dollar on Friday, while there was additional negative pressure on the oil markets from rumours of rising U.S. crude stocks and likewise for the corn and wheat markets, from a forecast of a record new corn crop for the U.S.A. this year. The Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Orange Juice, Wheat, Corn, Gold, Silver, Platinum and Palladium markets had a soft day, while the Soybean market was steady and the Copper market showed some modest buoyancy for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets 1.19% lower, to see this Index registered at 536.00. The day starts with the U.S. Dollar near to steady and trading at 1.538 to Sterling and 1.299 to the Euro, while Brent Crude is marginally softer and is selling at a steady $102.30 per barrel. The New York market started the day quietly softer on Friday and followed by a similar softer start for the London market, but with both markets soon recovering in quiet trade into positive territory. This recovery was not however sustained within the New York market which in line with the negative influences of the macro commodity index and seemingly some speculative exhaustion, soon moved back into negative territory. The London market managed to sustain its recovery for a longer period but finally slipped back to close off the afternoons trade taking a softer track and to end the day with 75% of its losses of the day intact and followed by a soft close for the New York market that ended the day with 88% of its earlier losses of the day intact. This overall soft close and with seemingly little to inspire the bulls within the market, is likely to see the markets open the day on a steady to soft note for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1981 – 11 MAY 143.80 – 2.00 10th May, 2013.
The Uganda Coffee Development Authority has reported that the country’ coffee exports for the Month of April was 107,529 bags or 76.14% higher than the same month last year, at a total of 248,749 bags. This sharp increase in exports is related to favourable weather conditions over the recent months, which has been positive for production and for a good flow of new crop coffee arrivals. With exports picking up, the country should be on track to register exports for this coffee year to exceed the targeted 3 million bags mark. The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 2,608 bags yesterday, to register these stocks at 2,744,994 bags. There was a further decrease of 884 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 12,400 bags. It was another mixed day on the commodity markets yesterday, U.S. unemployment figures reported lower numbers, somewhat encouraging however, the US Dollar registered a firmer day. Oil markets posted a softer day with news that U.S. crude Inventories had touched a record high last week. It was likewise a softer day for Gold, Silver, Copper, Orange Juice and Cocoa. The Agricultural sector generally had a better day, with Corn, Coffee, Soybeans and Wheat registering a positive close. Platinum and Palladium were similarly firm, while Sugar settled much unchanged on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets recorded 0.37% higher, to see this Index registered at 542.46. The day starts with the U.S. Dollar trading at 1.5425 to Sterling and 1.301 to the Euro, while Brent Crude is selling at a steady $103.58 per barrel.
With many market players on holiday yesterday in observance of Ascension Day, the coffee markets opened on a steady note and in relatively thin volume. The New York Arabica market found support during midsession as speculative buyers returned to the floor in what was initially an environment almost completely devoid of producer participation. This bolstered the upside trend, which quickly gained momentum and further support from America at the start of their business day. The flurry in New York assisted to prop up an otherwise muted London Robusta market, to see both markets trigger stops and build upon earlier gains into the afternoon. The New York market continued to attract high volumes of speculative short covering, to attract producer sellers back to the floor and limit further gains on the day.
The late in the day news that overnight temperatures were measured at 3.1 degrees Celsius and a confirmation that there was no signs of any frost in the small area of Pocos de Caldas in Brazil, seemed to remove some of the lustre in New York which lost some ground toward the end of the session. Both markets registered a positive close on the day, with London near to the days’ highs and a close in New York near to the middle of the day, To set the close set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 1992 + 37 MAY 145.80 + 1.65 JUL 2043 + 37 JUL 147.90 + 3.75
SEP 2064 + 34 SEP 150.00 + 3.80
NOV 2078 + 29 DEC 153.30 + 3.65
JAN 2084 + 27 MAR 156.35 + 3.50
MAR 2094 + 27 MAY 157.70 + 3.25
MAY 2100 + 26 JUL 158.90 + 3.00
JUL 2122 + 28 SEP 159.85 + 2.80
SEP 2122 + 28 DEC 161.25 + 2.50
NOV 2122 + 28 MAR 162.75 + 2.35
9th. May, 2013. The International Coffee Organisation has announced that world coffee exports for the month of March were 3.9% lower than the same month last year, at a total of 9.6 million bags. This brings total cumulative exports for the first five months of the October 2012 to September 2013 coffee year to 56.10 million bags, an increase of 7% on that of the previous year. The more detailed April coffee export figures from Brazil were announced yesterday by the Council of Green Coffee Exporters, with green coffee exports for the month reported at 37% higher than the same month last year, at a total of 2,409,968 bags. The report also confirmed that the country’s exports of value added soluble coffees calculated in terms of their green coffee equivalent were 31,015 bags or 12.56% higher than the same month last year, at a total of 277,985 bags. The total cumulative exports for the month from Brazil, to include Conilon Robusta, 2.30 million bags of Arabica and Soluble exports in green bean equivalent, is registered at a considerable 2,687,953 bags.
The arrival of May each year bring with it a certain degree of frost speculation ahead of the Brazil winter, and the first of the weather forecasters came forth yesterday to indicate a weak possibility of an isolated frost occurring in the highlands of Pocos de Caldas, a region within Minas Gerais on Thursday. The forecast lists a possibility of temperatures as low as 2 degrees Celsius, within this specific area. This may have had a mildly buoyant influence on the market yesterday and provide inspiration to the shorter term speculative sector, which holds an overall short position in the market presently.
The Brazil frost season has however, been more of a non-event in recent years where global warming has become a reality and coffee producers within the few possible frost risk areas have long since moved their coffee away from high risk areas. The latest weather forecasts are meanwhile reporting seasonally normal cool overnight temperatures of between 4 to 11 degrees Celsius and highs of between 22 to 25 degrees in the main Brazil coffee districts.
The Certified washed Arabica coffee stocks held against the New York market were seen to increase by 2,411 bags yesterday, to register these stocks at 2,742,386 bags. There was a further decrease of 1,280 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 13,284 bags.
The European warehouses of this exchange in Antwerp, Barcelona, Bremen and Hamburg hold 2,069,376 bags or 75.45% of the certified stocks, a dominant percentage of these stocks against the U.S.A. based warehouses of the exchange, in Houston, Miami, New Orleans and New York. While the European warehouses of the exchange presently hold an even more dominant 100% of the coffees pending grading for the exchange.
It was a mixed day on the commodity markets yesterday, the release of Chinese trade data indicating a continuum of growth within this market but received with apparent caution by the markets. The US Dollar lost some ground on the day. It was a softer day for Oil, Sugar, Cocoa, Robusta Coffee, Corn, Wheat and Orange Juice. There was a more positive stance for Copper and a buoyant close for Soybeans, Arabica Coffee, Gold, Silver, Platinum and Palladium yesterday. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets recorded 0.56% higher, to see this Index registered at 540.44. The day starts with the U.S. Dollar trading at 1.5542 to Sterling and 1.315 to the Euro, while Brent Crude is selling at a lower $ 103.87 per barrel.
It was a mixed day for the coffee markets yesterday, which started the day mildly lower in New York and steady in London. The appearance of underlying buyer support in the New York Arabica market and a void of producer sellers within this market, assisted to buoy the day and the morning session within New York was on a positive track. London Robusta traded in fairly thin volume and a narrow trading range yesterday and most of the day in negative territory, but managed to clamber back towards unchanged near to the end of the day. It was a more active afternoon in New York however, with sellers coming in to cap the days and a choppy session with speculative buyer activity lending support, to register a positive close in this market, near to the days highs. With many countries observing Ascension Day as a holiday today, one might anticipate a restrained day in the markets today. With the close set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 1955 – 5 MAY 144.15 + 1.85 JUL 2006 – 4 JUL 144.15 + 1.45
SEP 2031 – 5 SEP 146.20 + 1.40
NOV 2049 – 5 DEC 149.65 + 1.40
JAN 2057 – 6 MAR 152.85 + 1.45
MAR 2067 – 5 MAY 154.45 + 1.45
MAY 2074 – 5 JUL 155.90 + 1.45
JUL 2094 – 5 SEP 157.05 + 1.45
SEP 2094 – 5 DEC 158.75 + 1.65
NOV 2094 – 5 MAR 160.40 + 1.65
8th. May, 2013
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market decrease their net long position within this market by 53.28% in the week of trade leading up to Tuesday 30th April, when this net long position was registered at 5,337 Lots.
The focus of the discussions in Brazil surrounding an increase on the benchmark price for Arabica coffee was confirmed yesterday by the Agricultural Ministry. The announcement was that the guideline price would be increased by 17% from the previous benchmark minimum price at 261.69 reais, to the now confirmed 307.00 reais as a benchmark minimum internal price for Brazil Arabica coffee. This price which was negotiated with the Finance Ministry is below the 340 reais that had been lobbied by the Ministry of Agriculture, but is nevertheless a supportive overture on the part of Government. There is meanwhile, no sign that the Brazil government will consider financial support measures at this stage however and in this respect the minimum price is not mandatory, but rather serves as a benchmark price against which producers can seek out lower interest loans with which to finance stocks, should coffee prices move below this benchmark price. This is a show of support but without any specific financial support from Government and will not detract from the weight of unsold coffees that one way or another will finally have to come to the market.
The New York Arabica market received this news with aplomb yesterday as the speculative sector had mostly already reacted ahead of the confirmation that was released during trade, with a continuation of short covering activity to assist to hold this market on a buoyant track.
In Brazil and following a good month of April rains for most of main Arabica coffee districts, the first week in May has been relatively dry with overnight temperatures in some areas of South Minas below 10 degrees Celsius, all normal for this time of the year. The new Conilon Robusta harvest is in full harvest in the northern districts meanwhile and one might expect that the new Arabica coffee crop harvest will soon be underway. There is some interest in the already delayed release of the publication of cooperative coffee stocks being held within Brazil at the end of March. This information is scheduled to be released on 14th May and ahead of the new crop harvest, is already anticipated by the market to reflect the significant stock of past crop Arabica coffees still in hand.
The Certified washed Arabica coffee stocks held against the New York market were seen to decrease by 2,670 bags yesterday, to register these stocks at 2,740,269 bags. There was a further decrease of 1,841 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 14,564 bags.
The London markets opened for the first session of the week yesterday, which was a generally lower day on the commodity markets. The markets generally lacked direction in anticipation of monthly trade data from China, due to be released today. The leading in influence, Oil markets took a softer turn, the US Dollar similarly lost ground on the day and a negative close for most markets including Gold, Copper, Corn, Wheat, Cocoa, Sugar, Orange Juice, Robusta Coffee, with the only exceptions on the day, a positive close for Arabica Coffee, Cotton and Soybean. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets recorded 0.37% lower, to see this Index registered at 537.45. The day starts with the U.S. Dollar trading at 1.5478 to Sterling and 1.309 to the Euro, while Brent Crude is steady at $ 104.73 per barrel.
The coffee markets started the day yesterday on a softer note in New York and a steady note in London. It was however a choppy session and in a relatively narrow range in the morning with a continuation of speculative and investor fund buying support in New York, assisted to bolster this market. The London Robusta market opened for the first trading session of the week to see this market easing into the midsession where the lack of underlying buyer support quickly triggered the market lower, to steadily register a recovery toward the end of the day. The New York market managed to stay within positive territory for the most part of the day albeit within a narrow range, despite the mostly negative influences of the macro commodity complex for the day. The London market finished the day in negative territory within the middle of the day’s trading range and after a somewhat choppy session, a positive close in New York, closer to the day’s highs, to set the close yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 1960 – 20 MAY 142.30 + 0.95 JUL 2010 – 10 JUL 142.70 + 0.95
SEP 2036 – 10 SEP 144.80 + 0.85
NOV 2054 – 8 DEC 148.25 + 0.80
JAN 2063 – 8 MAR 151.40 + 0.90
MAR 2072 – 11 MAY 153.00 + 0.85
MAY 2079 – 14 JUL 154.45 + 0.85
JUL 2099 – 11 SEP 155.60 + 0.75
SEP 2099 – 11 DEC 157.10 + 0.60
NOV 2099 – 11 MAR 158.75 + 0.60
7th. May, 2013
With improved weather conditions over most of last year and into this year, the Coffee Federation in Colombia have reported that coffee production during the month of April increased by 85% on that of the same month last year to register production at 1,075,000 bags. Similarly they have reported that the countries coffee exports for the month were 316,000 bags or 64% higher than the same month last year, at a total of 810,000 bags. This is the single largest month of production registered by the Federation for the past ten years and is indicative that Colombia is well on the way to recovery after the disastrous sequential and weather effected lower crops of the previous years. With the somewhat aggressive rehabilitation and earlier replanting programs now coming to fruition, in combination with prevailing conducive weather, overall production is forecast at a much improved in excess of 10 million bags, for the year.
Following the positive export reports from Costa Rica and Guatemala, Honduras have come forth with their April figures and have reported that their coffee exports for the month were 13.14% below that of the same month last year, at 598,328 bags. The cumulative volume of exports from Honduras for the present October 2012 to September 2013 coffee year is below that of the same seven months of the previous year to register exports at 2.97 million bags or 3.3% below that of the same seven months last year.
There were some conflicting reports overnight meanwhile, to indicate that there had been a decision made by the Brazil Monetary Council yesterday. However lacking any follow through news on the details of the matter at hand, one might presume that the reports were pre-emptively optimistic. The decision on the matter of raising the minimum internal coffee price is still pending and lacking a date by Brazil government officials as to when an announcement might be made.
The Certified washed arabica coffee stocks held against the New York market were seen to increase by 2,376 bags yesterday, to register these stocks at 2,742,645 bags. There was a decrease of 3,925 bags in the number of bags pending grading for the exchange, to register these pending grading stocks at 16,405 bags.
With a Bank holiday in London, the commodity markets hovered uncertainly with the Oil markets taking the lead on the news of the escalating tension in the Middle East, while the US Dollar registered a firmer day against other major currencies. It was a firmer day for Oil, Gold, Arabica Coffee Sugar, Platinum and Palladium. Corn registered a somewhat dramatic decline on the day at a 4% lower close on the day, and a softer close in Soybeans, Wheat, Cocoa and Copper. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets recorded 0.42% lower, to see this Index registered at 539.46. The day starts with the U.S. Dollar steady and trading at 1.553 to Sterling and 1.307 to the Euro, while Brent Crude is selling at a lower $ 104.95 per barrel.
The London Robusta market did not trade yesterday due to a Bank Holiday, leaving New York Arabica to trade alone and this market opened later in the day for a shorter session yesterday. New York started the day on a softer note with early selling pressure pushing this market lower but with a recovery registered toward midsession and gained momentum supported by speculative expectations that the Brazilian Government would increase its minimum floor price for coffee. The market remained buoyant into the afternoon and with the support it would seem, of speculative buyer participation in a lower volume day. The close in New York was on a positive note but off the day highs, to set the close yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
Close 03/05/2013
MAY 1980 MAY 141.35 + 1.05
JUL 2020 JUL 141.75 + 0.85
SEP 2046 SEP 143.95 + 0.90
NOV 2062 DEC 147.45 + 0.95
JAN 2071 MAR 150.50 + 0.95
MAR 2083 MAY 152.15 + 0.75
MAY 2093 JUL 153.60 + 0.50
JUL 2110 SEP 154.85 + 0.50
SEP 2110 DEC 156.50 + 0.55
NOV 2110 MAR 158.15 + 0.60
6th May, 2013.
The latest Commitment of Traders report from the New York fine washed arabica coffee market has seen the shorter term Managed Money Fund sector of the market increase their net short sold position within this market by 15.56% in the week of trade leading up to Tuesday 30th April, when this net short sold position was registered at 18,866 Lots. Over the same period the longer term in nature Index Fund sector of this market increased their net long position within the market by 2.01% to register a net long position of 56,880 Lots, on the day.
During this week of trade the Non Commercial Speculative sector of the New York market is seen to have increased their net short sold position within the market by 12.21%, to register a net short sold position of 30,937 Lots. This speculative net short sold position which is the equivalent of 8,770,502 bags is likely to have been significantly decreased in line with the sharp positive correction over the period of more buoyant trade for the last two days of last week and likewise, the Managed Money Funds can be expected to have decreased their short position within the market.
Following the report of the positive April coffee exports from Costa Rica, the Coffee Association in Guatemala have reported that the countries coffee exports for the month were 55,701 bags or 14.67% higher than the same month last year, at a total of 435,290 bags. The country has however had a slow start to the coffee year and therefore despite this improved performance in April, the cumulative exports for the first seven months of the present October 2012 to September 2013 coffee year are still only 5,091 bags or 0.28% higher than the same period in the previous coffee year, at a total of 1,839,408 bags.
It was another day of uncertainty for the coffee farmers in Brazil on Friday, who had been hoping for some decision to be made on the matter of a minimum arabica coffee price to be set by the countries Monetary Council, but by the close of business for the week, there was no announcement. There were however rumours that the minimum price would be raise, but by a more modest 17.3% rather than the requested by the farmers 29.92%, to the equivalent of 115.30 usc/Lb. This was however only speculation but with perhaps some inside information, while there is so far no indication that the government shall also address the matter of the excessive carryover farm stocks of arabica coffees ahead of the pending new crop, which is the main reason for the prevailing soft prices for the New York arabica coffee market and likewise as a reference, for the internal market coffee prices in Brazil.
Somewhat negative news for the Central American producers is the announcement on Friday by Kraft Foods in the U.S.A. that they are going to lower by 6% the list prices for their speciality coffee Gevalia Brand coffees, which hold a good market share within the higher end sector of the North American market. This decrease in price is the second for this year and will by nature force competitors in this leading market to also look to negative price adjustments, which shall reduce the premiums that they can afford to pay speciality coffee producers for their coffee supply. It is of course not only negative news for the Central Americans, but also for speciality coffee producers worldwide.
The Certified washed arabica coffee stocks held against the New York market which were seen to increase by 3,970 bags on Friday, to register these stocks at 2,740,269 bags. There was meanwhile a more modest 1,295 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 20,330 bags.
The commodity markets continue to seesaw and were buoyed on Friday by the news that U.S. unemployment had hit a four year low, to register a 7.5% unemployment factor for the country. This news along with a weakening U.S. Dollar, countered the negative influences that have been coming with talk of slowing economic growth for both China and the U.S.A., to buoy spirits in most of the markets for the end of the week. The Oil, Copper and Soybeans markets registered good gains and the Natural Gas, New York arabica Coffee, Cotton, Orange Juice, Corn and Silver markets showed buoyancy, while the Cocoa, London robusta Coffee, Gold, Platinum and Palladium markets were steady, but with the Sugar and Wheat markets tending easier for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.59% higher, to see this Index registered at 541.73. The day starts with the U.S. Dollar trading at 1.556 to Sterling and 1.31 to the Euro, while Brent Crude is selling at $ 105.31 per barrel.
There was a softer and hesitant start for both the New York and London markets on Friday, but with the New York market recovering back into positive territory into the afternoons trade and followed by a more modest recovery for the London market. The London market did not however manage to build upon the renewed confidence and traded either side of the line for the rest of the day, to end the day on a steady sideways note, while the New York market took some heart from the influences of the positive macro commodity index and maintained some of its new found muscle to end the day on a positive note and with 62% of its earlier gains of the day intact. This overall steady close one would think, shall inspire a steady start for early trade today, against the prices set on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 1980 – 3 MAY 140.30 + 1.35
JUL 2020 unch JUL 140.90 + 1.45
SEP 2046 + 1 SEP 143.05 + 1.55
NOV 2062 unch DEC 146.50 + 1.60
JAN 2071 + 2 MAR 149.55 + 1.55
MAR 2083 + 4 MAY 151.40 + 1.40
MAY 2093 + 4 JUL 153.10 + 1.20
JUL 2110 + 4 SEP 154.35 + 0.85
SEP 2110 + 4 DEC 155.95 + 0.60
NOV 2110 + 4 MAR 157.55 + 0.40
3rd. May, 2013 The preliminary April coffee export figures from Brazil have seen the country’s exports for the month to be an impressive 39.77% higher than the same month last year, at a total of 2.46 million bags. It has however to be noted that at this time last year and ahead of the delivery of the large new 2012 crop, that internal market price resistance and declining past crop stocks, had been slowing selling and export activity from the country. It is most certainly not the case this year and with farmers now holding large unsold stocks and starting to accept the reality that the reference prices of the international markets are unlikely to rally significantly for the short term, they are now much more active sellers. There was frustration within Brazil yesterday in that following the meeting of the countries Monetary Council and an indication that a decision upon a benchmark minimum price was due to be announced yesterday, that the countries Agricultural Ministry cancelled the announcement of the council’s decision. This delay in the announcement is causing speculation of indecision within the Monetary Council and many questions over what might be the final decision, when it is announced. The longer term problem is that if all that the council can forward in terms of support for the coffee farmers is the requested 29.92% increase in the minimum price for arabica coffees to the equivalent of 127.69 usc/Lb., is that the minimum price is not mandatory and is only a price that if not achievable by farmers, shall raise the bar for low interest loan assistance to carry stocks. This is of course of some assistance but with a large new crop soon to come in and on top of the existing stocks, it is unlikely to slow the potential flow of high volumes of arabica coffees from Brazil into the consumer markets for the rest of the year. However the delay in official news on the matter is allowing for some to speculate that perhaps there shall be more on offer and that after all and even though unlikely, the government shall come out with a state purchase stock retention scheme of some sort. This in reality would be the only way to truly buoy the markets internationally, thus it is not only the Brazilian farmers who are anxiously awaiting the outcome of the decision of their authorities, but arabica coffee producers worldwide and including many within the Mexico and Central American producer bloc, who have been holding back on new crop sales in the recent weeks, in the hope of some improvement in the reference prices of the New York market. The Certified washed arabica coffee stocks held against the New York market which were seen to increase by 2,051 bags yesterday, to register these stocks at 2,736,299 bags. There was meanwhile a similar 2,620 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 19,035 bags. The Certified robusta coffee stocks held against the London market are seen to have decreased by a miniscule amount of 2,500 bags or 0.12% in the two weeks of trade leading up to Monday 29th. April, to register these stocks at 2,101,667 bags on the day. This unseasonal lack of change in these stocks which would usually be attracting new crop coffees from Vietnam at this time of the year reflects the combination of both price resistant slower selling from Vietnam that is buoying prices and also, the increased demand for the price discounted robusta coffees within the main consumer markets. The commodity markets had a more exciting day yesterday, with the news that the European Central Bank had dropped interest rates by 25 basis points. This news accompanied by a commitment on the part of the ECB to provide Euro zone banks with as much liquidity as shall be required, to assist smaller companies to access affordable lines of credit. This news detracted from the news that factory activity in Germany fell in April and at a faster pace the fall in the previous month of March, which followed news on Wednesday of the slowdown in economic growth for both the China and the U.S.A. Thus one might see the positive reaction yesterday to be more a modest corrective bounce, than a change in direction. The Oil, Sugar, New York arabica Coffee, Cotton, Orange Juice, Corn, Gold, Silver, Platinum and Palladium markets had a strong day and the London robusta Coffee, Copper, Wheat and Soybean markets had a day of buoyancy, while the Cocoa market was steady and the Natural Gas market reacted to the fundamental news of high U.S.A. inventories and tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.03% higher, to see this Index registered at 538.56. The day starts with a steady U.S. Dollar that is trading at 1.553 to Sterling and 1.307 to the Euro, while Brent Crude is tending softer against yesterdays recovery and is selling at $ 101.95 per barrel. There was a slow but steady to firm start for the markets yesterday, but with the New York market in reaction to the speculation of a potential raising of the minimum arabica price in Brazil and the added positive influences of the macro commodity markets, rose to trigger technical and industry buy stops and active fund short covering, to start to surge in value during the early afternoon, which was followed by some more modest buoyancy within the London market. The later news that there was after all no news from Brazil came into play to dampen spirits and to result in some profit taking and a modest negative correction, for both markets. The London market continued to end the day on a positive note and with 68% of the gains of the day intact, while the New York market likewise ended the day on a firm note and with 83% of its gains of the day intact. The question is where to go today, but one might expect that the firm close and with most of the gains retained for both markets, that it shall inspire hesitant follow through buoyancy for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 2nd. May, 2013 Parts of Switzerland were however working yesterday and including the Canton of Vaud, where Nestle have their head office. Thus there was some news forthcoming with the announcement by Nestle that they shall start construction in August of a coffee factory in Cameroun, to process coffee for this country and eventually the regional markets. This new factory they say shall have a capacity of approximately 333,000 bags per annum, which with the Cameroun presently producing only 640,000 bags per annum of which 92% is made up by robusta coffees, would indicate that Nestle would be value adding approximately 52% of the country’s coffee crop. It is however positive news for the Cameroun coffee industry which back in the 1989/1990 coffee year produced a crop of 1,928,000 bags, of which 80% was robusta coffees, as one would think that a domestic industry buyer shall inspire and encourage farmers to once again look to grow higher volumes of coffee. It is however a long road back for the Cameroun coffee industry, which in the last 2011/2012 coffee year produced only 49,300 bags of arabica coffee, which is only 12.8% of their crop twenty two years ago and likewise only produced 586,150 bags of robusta coffees, which is 38% of their production twenty two years ago. It does however; provide some indication of the potential for this country, if it can once again start to give coffee farming more attention. There is not news as of yet on the issue of the delayed meetings of the Brazilian Monetary Council, who shall address the problems of the soft coffee prices and what can be done to provide support for their farmers, who have to finance both the carry of significant carry over 2012 crop stocks and the harvesting of their new and relatively large 2013 crop. This question continues to hang over the market and one would hope that with the Brazilians back from their May Day holiday today, that there might be some news forthcoming later today. One way or another the news once out, shall assist to provide some degree of direction for market sentiment and it is not only the Brazilians who are keen to hear of the decisions that shall be made, but the entire world industry. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 860 bags yesterday, to register these stocks at 2,734,248 bags. There was meanwhile a lager 3,770 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 21,655 bags. The commodity markets had a quiet day yesterday with many players off the field of play, but with the U.S.A. operating the markets took an overall dip, against worries over the slowing albeit still impressive growth in China and concerns over a potential lack of traction for growth in the U.S.A. There is of course the added negative factor that the month of May has traditionally been a slow and soft pre-holiday season month for the markets, which tends to dampen the spirits of speculative bulls within the markets, who remember the old adage Sell in May and Go Away. The Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Orange Juice, Wheat, Soybeans, Gold, Silver, Platinum and Palladium markets had a softer day, while the Corn market was steady and the Cocoa market had a positive day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.62% lower, to see this Index registered at 533.05. The day starts with a steady U.S. Dollar that is trading at 1.554 to Sterling and 1.317 to the Euro, while Brent Crude is tending softer and is selling at $ 99.15 per barrel. The markets started the day yesterday on a near to steady note, but with the London market tending to soften through the morning and joined in afternoons trade by a softer track being taken with the New York market and within an environment of lacklustre thin holiday trade. Both markets did however bounce back a little from their lows of the day by the close of trade, but with the negative influences of the softer macro commodity index in play, ended the day on a softer note. This close is unlikely to inspire active support and one might expect to see hesitant and lacklustre early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 1st. May, 2013 These lower world exports for the month of March were particularly influenced by the 10.53% lower robusta coffee exports of the month, which came with the slowing of export activity out of a price resistant Vietnam market, while the world arabica coffee exports for the month were a more modest 3.39% lower for the month, with the lower figure related to price resistant slower export activity out of Central America and Brazil. These lower export figures do not however indicate any tightening of supply, but rather the cautious stance that is being taken by the consumer market coffee industry players, who are more hand to mouth in nature in terms of their coffee purchases, as they await within the competitive consumer markets for what shall be perceived as the potential lows of the market, to take on longer term stock postions. With the month of April over and with an approximately 17% larger new crop starting to come into play, that Sumatra as the leading robusta coffee island in Indonesia has reported that the robusta coffee exports for the month were 70,558 bags or 41.93% higher than the same month last year, at a total of 238,837 bags. These monthly export volumes or Sumatra robusta coffees can be expected to start to increase steadily from June onwards, as with internal market price resistance for new crop coffees, exporters are being cautious over new forward contract commitments. While the island can be expected to register robusta coffee exports for this year, which shall be in excess of 3.65 million bags. The Coffee Federation in Colombia, where Roya of Leaf Rust has been historically prevalent, have announced that with the assistance of the past few years of farm renovation and replanting of aged trees with new higher yielding and disease resistant varieties, that four of the country’s coffee regions are free of Roya. This program that is designed to steadily increase Colombia’s crop over the coming years is already indicating that the country shall be able to export in excess of 10 million bags for the present October 2012 to September 2013 coffee year, with export volumes due to rise steadily in the follow on coffee year. Albeit that with the present low value of the reference prices of the New York market, the country is struggling to inspire farmer confidence in the industry and is only managing to maintain focus, by subsidy price support programs. The National Coffee Council in Brazil have delayed until the 14th. May, the publication of coffee cooperative coffee stocks as at the end of March that was due out yesterday, as they say that there are anomalies in the existing data. There is however no doubt that with official figures unclear that both the coffee cooperatives in Brazil and private farmers are still holding substantial stocks of mostly past crop arabica coffees, which continue to impact negatively upon speculative sentiment in the New York market. Meanwhile the northern conilon robusta districts of Brazil are in full harvest of their new crop, which is expected to bring in approximately 17 million bags, while the central and southern arabica coffee districts are now only a few weeks ahead of starting to harvest a new crop of approximately 35 million bags. These latter arabica coffees to join the existing past crop stocks, to guarantee with unforeseen negative climatic conditions aside, a good and steady supply of Brazil coffees through to the next 2014 crop, which in an biennially bearing up year, can be expected to exceed 56 million bags. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 8,812 bags yesterday, to register these stocks at 2,735,108 bags. There was meanwhile no change to the number of bags pending grading for the exchange, to register these pending grading stocks at 17,885 bags. The commodity markets yesterday and despite the support of a weaker U.S. dollar, were mostly lacklustre in nature yesterday, with perhaps the pending holiday today for over eighty countries, having some impact upon market sentiment and activity. The Oil, Natural Gas and Copper markets had a soft day, while the Orange Juice, Corn, Soybean and Palladium markets tended softer, with the London robusta Coffee, Silver and Platinum markets were steady and the Sugar, Cocoa, Cotton, Wheat and Gold markets had a positive day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% lower, to see this Index registered at 541.82. The day starts with a steady to soft U.S. Dollar that is trading at 1.553 to Sterling and 1.317 to the Euro, while Brent Crude is tending softer and is selling at 101.50 per barrel. The markets started the day yesterday with thin trade and with the New York market showing some buoyancy and the London market steady, but as the day progressed and the New York market maintained its buoyancy, the London market drifted back into negative territory to spend most of the day trading softer but to finally pull itself back and to end the day on a steady note. The New York market however maintained its positive stance and ended the day on a firm note, with 71% of the earlier in the day’s gains intact. This with most of the world on holiday to celebrate May Day is due to be a very quiet days trade for both markets and one would expect that they shall trade cautiously steady for early trade, but with thin trade likely to accentuate any moves against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 30th. April, 2013 The coffee growers association in Guatemala have reported that they now estimate that approximately 70% of the 276,000 hectares of land under coffee is suffering from various degrees of the Roya or Leaf Rust infestation, for which they are stepping in to assist farmers with fungicides to combat the problem. It is noted however that this assistance is presently related to farmers who account for only 70,000 hectares and therefore a modest 25% of the countries land under coffee, which would make one presume that the assistance might be related to only the most severely affected and or the more economically disadvantaged of the farmers. There are also similar assistance programs being put in place in the neighbouring countries, so as to fuel farmers with the means to fight the problems of Roya through the summer rain season, as there is regional cooperation in terms of how best to combat this disease. It remains however a topical matter for this important fine washed arabica producer bloc and one that shall no doubt bring forth regular market manipulative pessimistic new crop forecasts for the forthcoming October 2013 to March 2014 crop, until well post this crop. Albeit that no doubt that even if some if not most of these forecasts might be seen to be excessive, that Roya has significantly dented the potential of the next 2013/2014 harvest. Meanwhile the issues of Roya are having no marked influence upon the fortunes of the reference prices within the New York market, with the funds and speculative sector of this market maintaining focus on overall coffee supply, rather than the factor of tightening fine washed arabica coffee supply. This prevailing bearish sentiment is dominated by the threat of rising natural arabica coffee supply from Brazil, which can only be countered by Brazil government financed intervention to support the holding back of arabica coffee stocks form the market. News of what if anything the Brazil government shall contribute, is now only a day or two away and all within the market, await this directional news with bated breath. Physical coffee trade within the consumer markets today can be expected to be lacklustre, as while both the New York and London market shall not recognise the May Day holiday tomorrow, there are many major consumer markets that shall be taking this holiday. Thus unless there is some unforeseen striking news to come to the markets, one might expect that with only Denmark, Great Britain, Ireland and the Netherlands out of Europe working tomorrow and with the latter struggling through a hangover from today’s coronation of their new king, that it shall be a quiet day on the eve of this holiday. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 830 bags yesterday, to register these stocks at 2,743,920 bags. There was meanwhile a very substantial 7,360 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 17,885 bags. The European warehouses of this exchange in Antwerp, Barcelona, Bremen and Hamburg with 2,062,565 bags or 75.17% of the certified stocks, hold a dominant percentage of these stocks against the U.S.A. based warehouses of the exchange, in Houston, Miami, New Orleans and New York. While the European warehouses of the exchange presently hold an even more dominant 100% of the coffees pending grading for the exchange, with the present price resistant selling on the part of the Mexicans and Central Americans, tending to stall the potential growth of these stocks. The commodity markets were generally encouraged yesterday with the softening of the value of the U.S. dollar, which reacted negatively to the Euro, on the news that there has finally been a government established within Italy and one that is supportive of economic austerity programs. While in terms of fundamentals, the wet spring in the U.S.A. that has delayed the spring planting or the summer corn crop came into play, to buoy the corn market that was a feature for the day. The Oil, Natural Gas, Sugar, Cotton, Copper, Orange Juice, Wheat, Corn, Soybeans, Gold, Silver, Platinum and Palladium markets had a positive day, while the London robusta Coffee market was steady and the New York arabica Coffee and Cocoa markets tended easier for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.59% higher, to see this Index registered at 543.32. The day starts with a steady to soft U.S. Dollar that is trading at 1.550 to Sterling and 1.311 to the Euro, while Brent Crude is near to steady and is selling at 103.25 per barrel. The markets started the day yesterday with both the New York and London markets taking a slow and softer track, but with volumes of trade extremely thin. The London market did manage to make a brief mid-day recovery, while the New York market remained in the doldrums and was soon joined again by the erratic London market. The London market did however as the afternoon progressed manage to keep only modestly below the line and to carry on to end the day having crawled back into very modest positive territory, while the New York market ended the day on a marginally soft note, having recovered 72% of its earlier losses of the day. This lacklustre close and with tomorrows holiday tending to dampen trading spirits, can be expected to do little to inspire activity and one might expect to see the markets take a cautiously hesitant and slow sideways track for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 29th. April, 2013 During this week of trade the Non Commercial Speculative sector of the New York market is seen to have decreased their net short sold position within the market by 22.54%, to register a net short sold position of 27,571 Lots. This net short sold position which is the equivalent of a much more modes 7,816,256 bags is likely to have been significantly increased in line with the sharp negative correction over the period of negative trade for the last two days of last week and likewise, the Managed Money Funds can be expected to have increased their short position within the market. It is perhaps the awareness of the much reduced speculative and managed money funds short sold position within the surplus supplied arabica coffee market along with the awareness of the significant surplus arabica coffee supply from Brazil in particular, which has seen the speculative and fund sector of the market loose heart at the end of last week. This negative view being further influenced by the overall quiet and lacklustre stance being taken by the industry sector of the consumer markets, where underlying buying support remains slow and lacklustre, to limit support for the market. There is also speculation that if the forthcoming month end meetings on the part of the Monetary Council in Brazil is not forthcoming with a clear and definite price support program for its coffee farmers which really now can only be related to the finance of removing stocks from the market, that the relatively slow and restrained selling of past crop arabica coffee stocks on the part of the farmers, shall start to surge. These meetings which include the Brazil Finance Minister, Planning Minister and the head of the Central Bank of Brazil one can imagine, shall following Fridays negative close for the New York market, come under some pressure from the Brazilian coffee farmers to do something to add value to their arabica coffee stocks and likewise, the large new crop that is soon to start. But with so many other national programs and more widely related than one agricultural sector to finance and this aside from state funding commitments for forthcoming high profile events such as the World Cup and the Olympics, one would question if there can be funds available to buy in price supportive coffee stocks. Thus aside from the lacklustre nature of the consumer markets, one might speculate that there are far more pessimists than optimists in terms of the chances of the Brazil government coming in to underpin arabica coffee prices, which has contributed to speculative bears taking hold of the reins of the New York market on Friday and the resulting soft end to last week’s trade. The Certified washed arabica coffee stocks held against the New York market which were seen to increase by 2,029 bags on Friday, to register these stocks at 2,744,750 bags. There was meanwhile a very modest 226 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 10,525 bags. The commodity markets were disappointed on Friday by the news that the U.S.A. GDP annual growth rate had slowed to 2.5% during the first quarter of this year, from and expected 3% factor, but there was at least some supportive news that unlike the Europeans this leading economy is nevertheless showing modest buoyancy. It was news that fuelled concerns that the this more modest trend might continue for the second quarter, which bucked the usually supportive nature of a softer U.S. dollar and assisted along with some profit taking within the oil markets, to a an overall soft end to the week. The Cocoa, London robusta Coffee, Cotton, Soybeans and Platinum markets did however register a day of buoyancy, while the Palladium market was steady and the Oil, Natural Gas, Wheat, Corn and Gold markets tended softer, with the Copper, New York arabica Coffee, Orange Juice and Silver markets having a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.56% lower, to see this Index registered at 534.83. The day starts with a steady to soft U.S. Dollar that is trading at 1.552 to Sterling and 1.306 to the Euro, while Brent Crude is near to steady and is selling at 101.95 per barrel. The markets started the day on Friday with hesitancy and with both markets drifting back into negative territory within an environment of thin and lacklustre trade, but with both markets recovering during the afternoon and heading back into positive territory. The London market managed to retain its new found gains and to end the day on a positive note and at its highs of the day, with a healthy 96% of its earlier gains of the day intact. It was however a short lived recovery of the New York market which while reacting to the negative nature of the macro commodity index, started to trigger speculative and producer price fix sell stops and took a sharp downside move towards three year lows and prices not seen for the second position in the market since May 2010. There was however as is the nature of such sharp moves some small correction on the close, but the New York market nevertheless ended the day having recovered only 24% of its earlier losses of the day and on a soft note. This mixed close but with the London market having closed well ahead of the New York market might set for a steady to corrective buoyancy track for the New York market and a steady to softer stance within the London market in quiet and hesitant early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 26th. April, 2013 Meanwhile in its program to steadily raise production levels the Ugandan Coffee Development Authority have undertaken to provide 20 million seedlings to their small scale farmers, which is aside from the many private trade and industry programs, which are assisting Uganda’s farmers to apply improved farm husbandry and inputs. Thus for the present this the leading coffee exporter in Africa would seem to be on track towards a much improved share of the African coffee production, which might well see exports rise to in excess of 4 million bags per annum, over the next five to six years. Following a good month of autumn rains for most of the main arabica coffee districts in Brazil, it is forecasted that they are now due for a couple of weeks of dry weather which shall assist the maturing cherries and one might expect that the new arabica coffee crop harvest shall soon start to come into play. This new crop and with the significant stocks of past crop arabica coffees still in hand, remains a concern for the countries farmers, as they continue to create a cloud over the international market and threaten modest profits for the new crop sales. Meanwhile farmers shall be concentrating upon the forthcoming monthly Monetary Council meetings that shall take place on Monday, which shall consider options to try to assist the coffee industry to buoy prices. In this respect there is much uncertainty as so far the only supportive measures that might be seen to be forthcoming is a raising of the minimum price that shall trigger special finance terms for farmers, to carry stocks. But this shall not detract from the weight of unsold coffees that shall be at hand, which one way or another shall finally have to come to the market and with the evidence of these stocks creating negative speculative sentiment for the reference prices of the New York market. This issue of surplus arabica coffee supply and with the main consumer industry roasters these days far more flexible in the coffees that they are prepared to use in their blends, continues to counter the almost daily reports from Mexico and Central America on the devastating effects of Roya for their forthcoming October 2013 to March 2014 new crops. These new crops with many districts over this important fine washed producer bloc having already experienced good flowerings, will with increased Roya or Rust control inputs and potentially lower yields, prove to be relatively expensive in terms of unit production costs. Thus one can foresee that unless there is a dramatic improvement in the reference prices of the New York market by the end of the year that many farmers within this producer bloc shall struggle to profit from their new crop, which is threatening for production levels for the future years. The consumer markets are meanwhile complacent and with the London robusta coffee market now trading at an attractive 34.5% price discount to the New York arabica coffee market, it allows roasters to look to the relatively inexpensive Brazil natural arabica coffees and robusta coffees as price discounters in their blends. While the competitive nature of the retail markets with many struggling within an environment of difficult economic times, forces roasters to have to look to such discounted blend components to maintain market share. The Certified washed arabica coffee stocks held against the New York market which were seen to increase by 3,637 bags yesterday, to register these stocks at 2,742,721 bags. There was meanwhile a similar 4,112 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 10,751 bags. The commodity markets experienced positive correction for many markets that had suffered from the negative sentiment of slowing growth in China and the U.S.A. and the on-going European debt crisis, which sees many countries back in recession. This was positive sentiment was further inspired by the weaker U.S. dollar and the oil markets, which had reacted to news of the probable use of chemical weapons by the Syrian government, which indicated a possible escalation of the problems within the Middle East, which is surprising in terms of the country not being related to oil supply. The Oil, Cocoa, Cotton, Copper, Wheat, Corn, Soybeans, Gold, Silver, Platinum and Palladium markets had a firm day, while the Natural Gas and Sugar markets were steady and the Coffee markets bucked the trend to have a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.38% higher, to see this Index registered at 53785. The day starts with a steady to soft U.S. Dollar that is trading at 1.545 to Sterling and 1.302 to the Euro, while Brent Crude is tending softer against yesterday’s positive close and is selling at 101.95 per barrel. The New York market started the day yesterday on a positive note and followed by a positive start for the London market, with both markets entering the afternoon on the same track but within an environment of thin and lacklustre trade. The afternoon brought with it the entrance of the North and South Americans and rising volumes that ignored the positive influences of the weaker U.S. dollar and the positive nature of the macro commodity index, to see selling pressure push the New York market back into negative territory and soon followed by the London market. The London market continued to remain soft for the rest of the day and ended the day on a soft note, but having recovered 53% of its earlier losses of the day by the close and mirrored by the New York market that likewise ended the day on a soft note and having recovered 56.5% of the earlier losses of the day. This soft close might however inspire some degree of roaster buying interest and one might think to see a steady to buoyant start for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 25th. April, 2013 It is however to be noted that this apparent slowdown in coffee exports from Vietnam this year, follows a relatively early start to the new crop in October, good carry over stock support and therefore a much more active export performance for the last quarter of 2012. While in the last quarter of 2011 the crop was not so early and the carryover stocks not as large, to see the first four months of 2012 new crop export sales from Vietnam in something of a catch up scenario and therefore, understandably higher than they are at present. Meanwhile the official state weather bureau in Vietnam have repeated their forecast that the countries traditional rain season shall start a week or so earlier this year in the second week of May, to bring support to the countries agricultural industry and including the coffee farmers. The early start to the rains would normally indicate a likewise early start to the new coffee crop harvest in October this year, but only so long as the summer rain season shall cease by early October, to allow for farmers to harvest and dry their coffees. It is however news that for the present indicates that it shall be business as usual for Vietnam and that for the foreseeable future, there is not threat to supply from the world’s leading robusta coffee supplier. The earlier in the year surge in pre new crop selling activity in Indonesia has dried up for the present, as exporters with good volumes of speculative forward sales in hand, are struggling to cover their commitments with the internal traders showing price resistance and looking to force exporters to pay up for new crop stocks. This slowing of new crop robusta coffee sales from Indonesia might therefore, be expected to see some more active interest being shown for short term fill robusta coffee supply from Vietnam and even though the main consumer markets are now heading into the slower summer roasting season, one might expect to see more active trade for Vietnam coffees in the coming weeks. Robusta coffees aside the big question remains what might happen with the significant stock of mostly arabica coffees that are being held by farmers and coffee cooperatives in Brazil, as with their new conilon robusta coffee harvest already well on the way and early pickings of the new arabica crop due to start at the end of next month, there shall be some pressure on farmers to liquidate some stocks. Both to free up space for new crop coffee stocks and to raise cash, to pay the labour to harvest this new crop. Thus there shall be keen interest in the pending month end meetings to discuss economic issues as related to agriculture and including the requests for the finance of price support programs for the coffee farmers, with many living in hope of a strong price support program which could only be related in Brazil’s government taking over coffee stocks. It is however very questionable that the government with so many other financial demands in hand will be prepared to make such a radical move and one might expect that should there be no significant support program coming into play, that it shall see Brazilian internal market selling activity start to become more active in the coming month and likewise, on the part of the countries exporters. This might likewise pressure some catch up selling from the Central Americans who have so far been showing some degree of price resistance and hiding behind the Roya curtain as an excuse, which with the slower summer market ahead, would indicate that so long as the Brazil government does not step in, the New York market is likely to maintain its soft trading range. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 1,547 bags yesterday, to register these stocks at 2,739,084 bags. There was meanwhile a larger 4,380 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 14,873 bags. The commodity markets tended to steady yesterday with the Oil markets taking the lead against news of lower U.S.A. gasoline inventories and a softer U.S. dollar assisting to buoy buying activity, for some markets. It was however not an exciting day, as the news of Great Britain heading into triple dip recession along with all the other dismal economic news from Europe, assists to maintain a pessimistic cloud over most markets. The Oil, Copper, Cocoa, New York arabica Coffee, Orange Juice, Corn, Gold, Silver and Platinum markets had a day of buoyancy, while the Natural Gas, Sugar, London robusta Coffee, Cotton, Wheat, Soybeans and Palladium markets had a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.38% higher, to see this Index registered at 530.53. The day starts with a steady U.S. Dollar that is trading at 1.532 to Sterling and 1.302 to the Euro, while Brent Crude is near top steady and is selling at 101.55 per barrel. The New York market started the day yesterday with some modest corrective buoyancy, following the previous day’s negative dip and followed by a steady start for the London market. The London market very quickly came under fund liquidation pressure and reversed into negative territory which was this markets track for the day and through to a soft close, but having recovered 28.5% of its earlier losses of the day by the close. The New York market maintained its positive stance and ended the day with modest gains, but having shed 59.5% of its earlier gains of the day, by its close. This mixed close provides little direction, but one would think that there might be a hesitant steady to soft start due for the markets as players look for direction against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 24th. April, 2013 One must however comment that this report is despite the fact that Mexico has reported increased volumes of new crop coffee exports and into a soft price market, with the countries coffee exports in February 32.43% higher than the same month last year and their coffee exports in March 5.7% higher than the same month last year, which does not really reflect a tighter supply of coffee. This is aside from the fact that Mexico’s cumulative coffee exports for the first six months of the present coffee year are 20.58% higher than the same period in the previous coffee year. Of course softer prices and lower profit margins can have a negative effect on farmer’s ability to finance the carry of stocks and to accelerate sales, but with the evidence of export volumes so far; one might regard this significantly lower 2012/2013 crop report to be somewhat market manipulative in nature. There is however some merit in forecasting that the forthcoming 2013/2014 new crop at the end of this year might be a more modest crop, as aside from the issues of Roya which so far have not affected Mexico as much as it has its southern neighbours, the prevailing low prices and reduced profits for the present crop, has to have some negative effect upon the levels of farm inputs towards the development of the next crop. Thus one might think that a forecast for a 400,000 bags lower crop from Mexico for the coming year, might well be on the cards. It has been a dismal coffee year so far for the Cameroun, whose Robusta coffee year is calculated on the basis of a December to November period. In this respect their National Cocoa and Coffee board have reported their robusta coffee exports for the first four months of this year up until the end of March to have been 71,800 bags or 60.48% lower than the same period in the previous coffee year, at a dismal total of only 46,217 bags. The situation for the relatively small and thus much less important arabica coffee crop from the Cameroun, whose arabica coffee year runs on a more conventional October to September basis, presents a somewhat better picture. In this respect the report that their arabica coffee exports to have been 4,383 bags or 48.7% higher than the same period in the previous coffee year, at a total of 13,383 bags. This is of course a volume of little significance other than an indication that there have been no negative weather issues for the country and that the dismal export performance so far for their more important robusta coffees is more likely to be related to price resistance slow selling, rather than to overall production volume issues. Internal market trade in Vietnam has been slow for the past few weeks, as farmers have shown price resistance to the negative influences of the slightly softer nature of the reference prices of the London market and thus one would think that following yesterday’s rather dramatic negative dip in this market, that the internal market sales might stall for a day or two, while farmers try to get a grip on the new price levels. However if they do not quickly recover it might trigger some degree of acceptance of reality and one would foresee that even if there is no significant recovery for the London market over the next few weeks, that it shall not really impact on a significantly tighter supply of Vietnam robusta coffees. However one could speculate that with tighter and or higher differential origin supply of robusta coffees that comes with internal market price resistance with the major producers, that it shall assist to attract further buying interest in the certified robusta coffee stocks of the London market and by nature of their decline, it shall be supportive for prices within this market. Thus one might remain somewhat positive towards the medium term future of the London robusta coffee market, which can be expected to show some muscle for the second half of the year. The Certified washed arabica coffee stocks held against the New York market which were seen to increase by 3,490 bags yesterday, to register these stocks at 2,740,631 bags. There was meanwhile a more modest 2,195 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 10,493 bags. The commodity markets continue to look with concern to the prospects for overall anaemic growth potential for this year, with the latest data from Germany pointing to its private sector shrinking this month for the first time in five months and flat to slower economic figures from China. Thus with the added negative impact of a firmer U.S. dollar, it was an overall soft day yesterday. The Cocoa and Soybeans markets showed buoyancy, while the Oil markets were steady and the, Natural Gas, Sugar, Wheat, Corn and Gold markets tended softer, but the Copper, Coffee, Orange Juice, Cotton, Silver, Platinum and Palladium markets had a soft day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.84% lower, to see this Index registered at 528.53. The day starts with a steady U.S. Dollar that is trading at 1.525 to Sterling and 1.300 to the Euro, while Brent Crude is showing some early buoyancy and is selling at 100.20 per barrel. The New York market started the day yesterday tending softer and followed by a similar start for the London market and this was the track taken by both markets into the afternoon’s trade, when a further dip in the fortunes of the New York market triggered Fund and light industry stop loss sell stops, to result in sharp and quite dramatic losses for the market and soon followed by a similar dip for the London market, which continued to trade sideways from thereon and end the day on a soft note and with 92% of its earlier losses of the day intact, while the New York market likewise ended the day on a soft note and with 85% of its losses of the day intact. This overall soft close might however inspire some industry price fixation and speculative corrective buying, to see the markets showing some degree of modest buoyancy for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 23rd. April, 2013 The fine washed arabica coffee producer bloc of Mexico, Central America, Dominican Republic, Colombia and Peru have reported their combined coffee exports for the month of March were 1% lower than the same month last year, at a total of 2.68 million bags. However in terms of the October 2012 to September 2013 coffee year and with the overall positive exports from Mexico and Central America and even more positive exports from a recovering Colombia, the cumulative exports from this producer bloc for the first six months of this new coffee year are 10% higher than the same period in the previous coffee year, at a total of 13.74 million bags. The International Coffee Organisation have increased their Roya or Leaf Rust related assessed losses for the present crop from the Mexico and Central American producer bloc to be 30% higher than their earlier assessment, at 3 million bags. This would under usual circumstances be seen to be a bullish comment, but the same report also made the point that these losses would be adequately covered, by increased coffee supply from other producers. This new ICO assessment of losses for the Mexico and Central American producer bloc is very much in line with the many reports emanating from the coffee officials within the region, which registered exports of 16,661391 bags during the last October 2011 to September 2012 coffee year. Thus if one is to believe the forecasts and there is no doubt that there is substance to the forecasts albeit that the figures are probably inflated for market manipulative reasons, the exports from this producer bloc of this present coffee year shall be below 14 million bags. However with this producer bloc having already exported close to 7.4 million bags over the first six months of the new October 2012 to September 2013 coffee year and with volumes traditionally higher during the last six months of the coffee year, one might suggest that the potential exports for this coffee year might still be in excess of 15 million bags. Especially so as while there have been significant Roya related losses recorded for El Salvador and Guatemala, the problem has not been as widespread for Honduras, Costa Rica and Nicaragua and even less so for Mexico, which would assist to limit the shorter term losses from the present crop. There is however no doubt that this is not a short term problem for the region and that while there are many programs being financed to assist the regional farmers to combat Roya, it is in the region to stay and while adding to the longer term costs of production and denting the already marginal profitability for coffee farmers, it shall likewise result in a lack of growth in regional yields for the next October 2013 to March 2013 crop. This dent being related to not only the bearing potential of stressed trees in the more affected areas, but also to the percentage of stressed and trees that shall have been stumped to more radically combat the effects of this disease, which are trees that shall only come back into production during the follow on 2014 to 2015 crop. The Indonesian new crop is still foreseen to be near to 17% higher this year due to much improved and near perfect weather conditions over the past year, but there are some hiccups with the new crop harvesting in the main robusta coffee island of Sumatra, due to regular scattered showers in the recent weeks, which are delaying the drying of newly harvested coffees. This with some exporters short sold in anticipation of the pending good flow of new crop robusta coffees, is resulting in some speculative holding back of stocks to pressure exporters prices higher, which is slowing short term trade volumes. The commodity markets had another mixed day yesterday, with most players taking a cautious view towards the uncertain economic indicators that prevail and especially so, with hints of a slowing Chinese economy and its potential impact upon demand. The Oil, Cotton, Gold, Silver, Platinum and Palladium markets had a day of buoyancy, while the Natural Gas, Copper, Sugar, Cocoa, Coffee, Orange Juice, Wheat, Corn and Soybean markets had a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.32% lower, to see this Index registered at 533.02. The day starts with a steady U.S. Dollar that is trading at 1.526 to Sterling and 1.304 to the Euro, while Brent Crude is tending softer post yesterday’s recovery to triple digit prices and is selling at 99.05 per barrel. The New York market started the day yesterday tending softer and followed by a similar start for the London market, but with both markets recovering back into positive territory for early afternoon’s trade. The recovery was however short lived for the New York market while the London market managed to retain its buoyancy and into later in the afternoon. There was however a change in direction for both markets later in the afternoon as the London market lost its way and drifted lower to end the day on a negative note but having recovered 47% of its earlier losses of the day by the close, while the New York market recovered back into positive territory but to shed its gains late in the day and to end the day on a near to steady note and having recovered 93% of its earlier losses of the day. This near to steady close for the New York market might assist to steady sentiment, but one would expect little better than a hesitantly steady start for early trade today within both markets, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. During this week of trade the Non Commercial Speculative sector of the New York market is seen to have increased their net short sold position within the market by 4.94%, to register a net short sold position of 35,595 Lots. This net short sold position which is the equivalent of a substantial 10,091,025 bags is likely to have been significantly reduced in line with the overall positive nature of trade that this market encountered for the latter half of last week and likewise, the Managed Money Funds can be expected to have reduced their short position within the market. Following the March export reports from their neighbours within the Central American and Mexico producer bloc, the Nicaraguan Export association have reported that their exports for the month were 14,567 bags or 7.48% lower than the same month last year, at a total of 180,177 bags. However with a good start to the present October 2012 to September 2013 coffee year, the country has reported that their cumulative coffee exports for the first six months of this new coffee year are 278,049 bags or 51.35% higher than the same period in the previous coffee year, at a total of 819,513 bags. This surge in the export volumes from Nicaragua for the first six months of this new coffee year has however been boosted by an carry over stock from the past crop of in excess of 300,000 bags, as the country looking for special price support from Venezuela had been showing price resistance to the declining value of the international markets last year. This special price support for Nicaraguan coffees from the state subsidised food and beverage Venezuelan market was not however not forthcoming in the volumes that were hoped for, which has left the Nicaraguan coffee industry to liquidate old crop stocks, once the new harvest started to come into full swing at the end of last year. Despite the Roya affected and price resistance dips in the recent export volumes for leading players within the Mexico and Central American producer bloc, such as Honduras, Guatemala, Costa Rica, El Salvador and now Nicaragua and countered only by an improved March figure from Mexico, the overall coffee supply for the first six months of the new coffee year are still positive. In this respect the combined cumulative exports from this leading fine washed arabica coffee producer bloc for the period of October 2012 to March 2013 are 397,155 bags or 5.68% higher than the same period in 2011 to 2012, at a total of 7,390,638 bags. Thus one would say that this relatively good volume of regional exports is contributing, along with the steadily improving export performance from Colombia, to the present soft trading range of the related New York market. The Certified washed arabica coffee stocks held against the New York market which were seen to increase by 2,562 bags on Friday, to register these stocks at 2,738,011 bags. There was meanwhile a similar in volume 1,942 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 6,795 bags. The Certified robusta coffee stocks held against the London market are seen to have increased by 64,167 bags or 3.15% in the two weeks of trade leading up to Monday 15th. April, when they were registered at 2,104,167 bags. This modest increase is despite the evidence of high volumes of robusta coffee exports from Asia during March, which would appear to be me mostly related to consumer market industry demand, than to speculative trade stocks. The commodity markets experienced a mixed but overall positive day on Friday, following a turbulent week of mostly uncertain trade, with mixed signals coming from the U.S.A. where some speculate a slowing of economic recovery traction and with some uncertainty, over the ability of China to maintain its present impressive levels of economic growth. The Oil, Natural Gas, Cocoa, Coffee, Sugar, Orange Juice, Corn, Wheat, Gold and Palladium markets had a positive day, while the Copper, Cotton, Soybeans, Silver and Platinum markets had a softer day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.12% higher, to see this Index registered at 534.71. The day starts with a steady U.S. Dollar that is trading at 1.523 to Sterling and 1.307 to the Euro, while Brent Crude is showing hesitant buoyancy and is selling at 99.55 per barrel. The New York market started the day on Friday with expected buoyancy and seemingly lending support for the less volatile and speculative London market, with both markets maintaining a positive track through the day and showing some muscle during the more active afternoons trade. There is however a producer price fixation hedge selling ceiling being encountered for both markets against any degree of rally, as there are considerable volumes of both Asian robusta and South and Central American coffees still to come to the markets, which attract step up sell stops and restrain the daily gains for the markets. Nevertheless following the positive nature of the close for both markets on Friday and with the New York market having retrained 79% of its earlier in the day’s gains by the close, one might expect to see a follow through steady start for the markets today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 19th. April, 2013 Thus with the new crop Conilon robusta coffee crop already starting to come to the domestic market by the mid this month and the new crop arabica coffees due to start coming to the market by early June and with a domestic market and export demand expected to rise to approximately 4.2 million bags per month, one would think that by June there shall be a carry-over stock of past crop coffees of close to 10 million bags. These stocks added to the new crop of 52 million bags, would indicate Brazil coffee supply from June to May next year of 62 million bags and therefore a follow on carry over stock of close to 12 million bags into the next 2014 Brazil crop. There might however with the reduced supply from Mexico and Central America as a result of the issues of Roya be some increase in demand for Brazil arabica coffees, but even with such increased demand, one might estimate a carryover stock of 10 million bags into the 2014 Brazil crop. This next crop and with unforeseen disruptive weather issues aside is an up year crop and in this respect, would be expected to easily exceed 55 million bags and therefore for the foreseeable future and with improving crop levels from countries such as Colombia and East Africa, world coffee supply cannot be seen to be threatened for the coming years. The question is however in terms of arabica coffee is what impact there shall be from the prevailing low value of the reference prices of the New York market, which do not encourage farmers to look to invest in the rejuvenation of existing farms and planting out new farms. This low market value is likely to see world arabica coffee production take something of a sideways direction and meanwhile with world coffee consumption rising by approximately 2.5 million bags per annum, to see robusta coffees continue to gain market share in terms of overall consumption. This is however not foreseen to be a problem issue, as most of the world coffee consumption growth and aside form producer domestic consumption growth is related to the new Asian and Eastern European markets, where the majority of consumption is related to low value robusta coffees. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 2,651 bags yesterday, to register these stocks at 2,735,449 bags. There was meanwhile a much more significant 7,751 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 8,737 bags. This halt in the past few months of steady increase in the certified stocks of the exchange, which is related mostly to the price resistant slowing of new crop sales and exports from Mexico and Central America who still hold a dominant 1,716,672 bags or 62.76% share of the stocks, can perhaps be seen as a positive factor for speculative sentiment within the market. It has to be noted however that Peru who with a 609,719 bags or 22.29% share of the stocks follow the dominance of Mexico and Central America, is now starting to harvest its large new crop and one might expect that by the second quarter of this year that more Peru coffees shall start to flow into these stocks and accompanied by catch up selling from Mexico and Central America, which should see these stocks start to increase significantly in the second half of this year. The commodity markets experienced corrective buying support within many markets, which had been seen to be oversold and this reaction further encouraged, by a slight weakening of the U.S. dollar. There was buoyancy for the Oil, Coffee, Cocoa, Copper, Soybeans, Gold and Palladium markets, but with the Natural Gas market near to steady and the Sugar, Cotton, Orange Juice, Wheat, Corn, Silver and Platinum markets tending softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.30% higher, to see this Index registered at 534.07. The day starts with a steady U.S. Dollar that is trading at 1.530 to Sterling and 1.307 to the Euro, while Brent Crude is tending softer against yesterday’s improved prices and is selling at 98.25 per barrel. The New York market started the day yesterday on a steady note and very quickly started to experience a degree of buoyancy, while the London market drifted back into negative territory. The New York market continued to enter the afternoon’s trade on a positive note while the London market briefly recovered into positive territory, but soon drifted back in value. There was however some encouragement for the New York market from the combination of the more positive macro commodity index and later in the afternoon this market with fund buying in play rose to trigger stop loss buy stops and took a step up in value, which was followed by a similar positive move within the London market. Both markets did however soon encounter something of a ceiling and with producer price fixation selling pressure coming into play, to see the markets take sideways track into the days close. The London market thus ended the day on a positive note and with 56% of the earlier gains of the day intact, while the New York market ended the day showing some degree of muscle and with 91% of the earlier in the day’s gains intact. This positive close one might see to be supportive for a steady to buoyant start for early trade today, but with the possibility of some producer price fixation hedge selling soon coming in to play and to limit gains against the positive prices set yesterday, as follows: 18th. April, 2013 In terms of Brazil coffee supply and aside from the significant past crop stocks of mostly arabica coffees that remain in the hands of farmers and coffee cooperatives, the weather is being kind to the prospects for the pending new crop that is forecasted to be in excess of 52 million bags. In this respect the rainfall reports for the month so far, has seen the main arabica coffee producing states of Minas Gerais, Sao Paulo and the Cerrado all reporting having received above average for the month rainfall so far, albeit that the averages for this tail end of the summer rain season month is a relatively modest 60 mm to 80 mm of rainfall. While farmers in the central and southern arabica coffee states of Brazil await the start of the new crop harvest that is due in approximately six weeks, the farmers in the northern conilon robusta coffee states have already started their new crop harvest. This new conilon robusta crop that one would expect to be between 16 to 17 million bags, is however mostly related to the demands of the domestic Brazil coffee industry and with only 5 to 6 million bags being exported annually and shall not for the short term impact upon the present relatively tight hand to mouth robusta coffee supply. Meanwhile and following some scattered rain showers over the past few weeks over the main central coffee districts in Vietnam, there have been further forecasts for the main summer May to September rain season to start approximately two weeks early. These rains shall no doubt not only dampen the coffee farms but also the spirits of the speculative bulls who have of late been liberally using the word drought and its potential to reduce the potential of the next crop, in an attempt to buoy robusta coffee prices. These forecasts for and early start to the rains have however so far, not changed the attitude of the farmers in Vietnam, who with good profits in hand from their earlier sales, continue to show price resistance to the recent softening of the reference prices of the London market, which is dictating firm differentials and slow selling activity for the present, on the part of the exporters in Vietnam. It is not only the Vietnamese robusta coffee farmers and likewise the Central American washed arabica coffee farmers who are showing price resistance to the soft nature of the international coffee markets and slowing physical coffee trading activity, but also there is a general cautious stance being taken by roasters within the main consumer markets. It would seem that while many producers of which many of the arabica producers are now struggling to make profits from their coffee sales are holding back in the hope of some recovery for the reference prices of the New York and London markets, that consumer market industries are looking for further dips in the markets, in line with the prevailing soft nature of the macro commodity index and in terms of the New York market, the negative effects of catch up selling of the considerable stocks of Brazil arabica coffees. Thus for the present the physical coffee markets are dull and lacklustre in nature, with many roasters tending to buy on a hand to mouth basis, as they await direction. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 16,503 bags yesterday, to register these stocks at 2,738,100 bags. There was meanwhile a much more modest 530 bags increase in the number of bags pending grading for the exchange, to register these pending grading stocks at 16,488 bags. The commodity markets had another mixed day yesterday, but with the cloud of negative concern over the economic prospects for Europe and the further rumours for a European Central Bank rate cut, which buoyed the value of the U.S. dollar, hanging over the market and dulling sentiment. The Oil, Copper, Silver, Platinum and Palladium markets suffered from sharp losses and the Sugar, Cocoa, New York arabica Coffee, Wheat, Corn, and Gold markets had a softer day, while the Natural Gas, London robusta Coffee, Cotton, Orange Juice and Soybeans markets had a day of buoyancy. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% lower, to see this Index registered at 532.49. The day starts with a steady U.S. Dollar that is trading at 1.525 to Sterling and 1.305 to the Euro, while Brent Crude is tending softer and is selling at 96.15 per barrel. The New York market started the day yesterday on a steady note but with some degree of buoyancy coming into play as the morning progressed and seeing this market maintain this positive stance into the afternoons trade, which was a similar track that was taken by the London market. The New York market did however start to falter in line with the negative influences of the macro commodity index later in the afternoon and while the London market managed to maintain its positive stance, the New York market dipped back into negative territory. The London market continued on its positive track to the end of the day’s trade, but to close with only 23% of its earlier in the day’s gains intact, while the New York market that had encountered a late in the afternoon positive bounce fell back to end the day on a soft note and having only recovered 62% of its earlier in the day’s losses by the close. This mixed close and with both markets presently within a relatively narrow trading range is likely to see traders taking a cautiously slow and hesitant view towards the markets for early trade today, which should see the markets take a steady and sideways track against the prices set yesterday, as follows: 17th. April, 2013 The Green Coffee Association of the U.S.A. have reported that the countries reported port warehouse green coffee stocks declined by 114,765 bags or 2.35% during the month of March, to see these stocks total 4,776,918 bags as at the end of the month. This decline was not to be unexpected in terms of the relatively slow delivery of coffees from Central America during the past two months, as farmers and exporters reacted to the issues of Roya and the low value of the reference prices of the New York market, with price resistant selling. Meanwhile one would comment that these stocks do not include the unreported bulk container transit stocks and the on-site roaster inventory stocks, which would be at a conservative guess the equivalent of at least two weeks of overall U.S.A. and Canadian roasting activity and therefore, approximately 940,000 bags. Thus if one were to apply this factor to the North American scenario, one would see the end March green coffee stocks to have been the equivalent of a more than sufficient 12 weeks of roasting activity. Even if one is to deduct the 691,822 bags of stocks that would be related to the official figure that were being held within the U.S.A. based warehouses of the New York exchange, the non-certified fresh green coffee trade and roaster green coffee stocks at the end of the month were the equivalent of approximately 10.7 weeks of combined U.S.A. and Canadian roasting activity. This two and a half month stock figure and with new coffees steadily flowing into the North American market that is anyhow heading for the slower summer roasting season, indicates no short to medium term coffee supply problems for the North American consumer market. The Customs Department in Vietnam have confirmed that the final tally for coffee exports of mostly robusta coffees for the month of March was 57.3% higher than the previous Tet New Year holiday disrupted short month, at a total of 2.63 million bags. This export performance exceeded the earlier in the month trade and industry forecasts for exports of 2.17 to 2.5 million bags, while despite this higher March performance the cumulative exports for the first three months of this year of 7,928,333 bags were 10.9% lower than the same period last year. However one might comment that the exports from Vietnam during the last quarter of 2012 were significantly higher than the last quarter of 2011 and therefore, overall robusta coffee supply from Vietnam remains relatively steady. Meanwhile and rather surprisingly as the new Ivory Coast robusta coffee crop is forecasted to be similar to last, the countries authorities have reported the their coffee exports for the first six months of the present October 2012 to September 2013 coffee year are 88,767 bags or 21.1% lower than the same period in the previous coffee year, at a total of 331,967 bags. This is with half the coffee year already passed, well short of the forecasts for official coffee exports for the present coffee year of approximately 1.54 million bags. Thus it would seemingly indicate that the country is due for something of a surge in export volumes, for the second half of this coffee year. The Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 1,018 bags from the last Friday’s level yesterday, to register these stocks at 2,754,603 bags. There was meanwhile a 3,906 bags decrease in the number of bags pending grading for the exchange, to register these pending grading stocks at 15,958 bags. The commodity markets had a mixed but overall positive correction day yesterday, following the rout that was experienced the previous day. There was aside from the corrective stance some support coming from the softer U.S. dollar and the improved housing data from the U.S.A., but this was countered by disturbing economic figures from Europe that point to anaemic global growth for this year. The Natural Gas, Copper, Sugar, Cocoa, Coffee, Corn, Wheat, Soybean, Gold, Silver, Platinum and Palladium markets had a day of buoyancy, while the U.S. Oil was steady and the Orange Juice and Brent Oil markets tended softer. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.83% higher, to see this Index registered at 534.17. The day starts with a near to steady U.S. Dollar that is trading at 1.534 to Sterling and 1.318 to the Euro, while Brent Crude is tending softer and is selling at 98.55 per barrel. The New York market started the day yesterday with some early buoyancy and followed by a similar positive start for the London market, but with both markets coming under some pressure later in the morning to shed their gains, but to very quickly recover back into positive territory. The London market continued to maintain its positive stance from thereon and taking a steady sideways track for the rest of the day, to end the day on a positive note and with 65% of its earlier in the day gains intact. The New York market did however post the recovery from it early afternoon dip, encounter some mid-afternoon pressure and a short visit to negative territory, but with the added influences of the positive nature of the macro commodity index soon recovered and to likewise end the day on a positive note and with 79% of the earlier in the day’s gains intact. This positive close one would think shall be conducive to a cautiously steady start for early trade today against the prices set yesterday, as follows: 16th. April, 2013 The London robusta market as the reference price for robusta coffee exports from the producer countries still offers a 31.4% discount to the New York arabica coffee market and thus despite the further decline in the reference prices of this latter arabica coffee market, the robusta coffees remain an attractive raw material option to the main consumer market blends and especially so, as these markets remain highly competitive in nature. This situation shall dictate continued strong demand for robusta coffees which not only contribute to the blends within the price sensitive traditional consumer markets, but dominate by far the development within the new markets and would indicate relatively tight supply of robusta coffees for the foreseeable future. Thus with the corresponding lack of growth in the certified robusta coffee stocks held against London market, which are presently sitting at a relatively modest 2,027,000 bags, one might expect to see speculative confidence being retained within this market. This potential for stability and possible buoyancy for the London market, is assisting to likewise buoy sentiment for the majority of robusta coffee producers, which is resulting in mostly slow hand to mouth trade for the robusta coffees for the present. Meanwhile with significant past crop arabica coffee stocks being held by farmers and coffee cooperatives in Brazil, there shall be keen interest in the month end discussions with the Brazil government, over the possibility of some further state funded price support for the Brazilian coffee farmers. In this respect and one might suspect in a bid to provide frightening figures to inspire their government to be financially friendly to the industry, the Brazil National Coffee Council have announced plans to reinstate the official quarterly coffee stock reports by the countries coffee cooperatives. It shall be interesting to see these figures which all members of the international trade and industry suspect to be substantial, while one would note that aside from the official cooperative stocks that the private farm stocks of unsold 2012 crop arabica coffees are likewise substantial, which shall contribute to an approximate carry over stock of 7 million bags into the new crop harvest. These stocks to contribute to an overall coffee supply of 59 million bags, as against a combined domestic market and export market demand for Brazil coffees over the twelve month period leading up to the follow of 2014 Brazil crop, of approximately 51 million bags. This 51 million bags demand factor one must note is approximately 2.5 million bags higher than the overall demand for the countries coffees, for the preceding twelve months. However with the earlier unforeseen Roya affected Central American dip in coffee supply and with the availability of relatively affordable Brazil arabica coffee stocks, one might expect to see the consumer market demand for Brazil arabica coffees increase for the coming year. Likewise over the 2014 to 2015 period, as the Mexican and Central American recovery from the radical surgical steps of coffee tree pruning that is taking place within this producer bloc, can be expected to fuel only modest crops from this producer bloc for at least three years. There was no report published yesterday on the Certified washed arabica coffee stocks held against the New York market which were seen to decrease by 275 bags on Friday, to register these stocks at 2,755,621 bags. There was likewise no report published on the number of bags pending grading for the exchange, which increased on Friday by 1,160 bags, to register these pending grading stocks at 19,864 bags. The commodity markets had a rough ride yesterday, with the negative news of less than expected Chinese GDP growth figures, which were accompanied by lower than expected housing data growth figures from the U.S.A., which had a negative impact upon most markets. This negative data is followed by fears that the Federal Reserve Bank in the U.S.A. might bring its market support programs to a close sooner rather than later, which does not inspire confidence for the markets today. The Oil, Natural Gas Copper, Sugar, Cotton, Corn, Wheat and Soybeans markets suffered significant losses, while the Gold, Silver, Platinum and Palladium market registered sharp losses for the day. The Coffee and Cocoa markets had a softer day, but with less significant losses that the majority of the markets, while the Orange Juice market bucked the negative trend and had a day of buoyancy. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 2.57% lower, to see this Index registered at 529.74. The day starts with a near to steady U.S. Dollar that is trading at 1.530 to Sterling and 1.308 to the Euro, while Brent Crude is tending softer and is selling at 98.80 per barrel. The New York markets had near to steady start for very early trade yesterday, but soon started to take a downside track as the morning progressed, while the London market immediately opened the day on a soft note and with relatively sharp losses. The New York market which remained in the doldrums of low value for the early afternoon’s trade did however buck the negative influences of the soft macro commodity index and posted a partial recovery for late afternoon trade and followed by a likewise partial recovery for the London market. The London market continued to end the day on a softer note, but having recovered 52% of its earlier losses of the day and likewise, the New York market ended the day on a soft note, but having recovered an even more impressive 71% of its earlier losses of the day. This was despite the recovery a nevertheless overall soft close and one might expect that it shall inspire little better than some hesitant modest buoyancy for early trade today against the prices set yesterday, as follows: 15th. April, 2013 The latest Commitment of Traders report from the New York fine washed Arabica coffee market has seen the shorter term Managed Money Fund sector of the market reduce their net short sold position within this market by 13,34% in the week of trade leading up to Tuesday 9th. April, with this short sold position registered at 20,940 Lots. Over the same period the longer term in nature Index Fund sector of this market increased their net long position within the market marginally to register a net long position of 54,691 Lots, on the day.
During this week of trade the Non Commercial Speculative sector of the New York market is seen to have reduced their net short sold position within the market by 6.78%, to register a net short sold position of 33,920 Lots.
The European Coffee Federation have reported that the continents port warehouse stocks held in Antwerp, Bremen, Hamburg, Genova/Savona Vado, Le Havre and Trieste rose by 1.40% during the month of February, to total 10.22 million bags at the end of the month. In combination, these stocks are around the equivalent of 10.50 weeks European roasting, but do not reflect the bulk container transit stocks and roaster on site inventory stocks, that would add a few more weeks of cover to these February European port warehouse stock figures.
Following the announcements by J. M. Smucker and Kraft Food Group of price discounts to their prominent retail coffee brands in North America; Starbucks have made a similar announcement and confirmed that their retail list prices for Starbucks and Seattle’s Best will be reduced by an average of 10% starting next month. This within the fiercely competitive retail sector as the leading coffee brands fight it out for market share on the supermarket shelves, Starbucks have excluded the coffee offerings within their own shops. This news is likely to be viewed with some some degree of bearish sentiment, with the indication that the North American roasters are limiting their ability to pay up for green coffee.
The Certified washed Arabica coffee stocks held against the New York market posted a decline by 275 bags on Friday, to register these stocks at 2,755,621 bags. There was meanwhile 1,160 bags increase in the number of bags pending grading for the exchange, which were registered at 19,864 bags.
The commodity markets were mixed on Friday, with generally weaker economic indicators released for the USA retail sector and Cyprus’s continuing financial woes, dampening speculative confidence and a softer day for the leading Oil markets. It was similarly a softer day for Gold, Copper, Arabica Coffee and Silver markets, although a firmer day in Cocoa, Sugar, Cotton, Orange Juice, Wheat, Corn, London Robusta and Soybeans. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.54% lower, to see this Index registered at 543.72. The day starts with a near to steady U.S. Dollar that is trading at 1.533 to Sterling and 1.308 to the Euro, while Brent Crude is tending softer and is selling at 101.97 per barrel.
The coffee markets opened the day on Friday hesitantly steady and with some degree of buoyancy coming into play in the early session in New York with London Robusta following suite after an initially softer start. After a mildly positive start in New York in narrow range producer and fund sellers weighed into the market to see sell stops quickly triggered and a lower and softer afternoon followed for New York. This market also weighed by the general and external gloomy sentiment lending a softer influence and a lower close on the day. The London Robusta market maintained a buoyant stance and built on to the morning gains in the afternoon, to see this market close in a positive range although off of the day’s highs, to see the markets register the close on Friday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAY 2030 + 24 MAY 135.25 – 1.55
JUL 2069 + 21 JUL 137.15 – 2.00
SEP 2082 + 20 SEP 139.70 – 2.05
NOV 2089 + 21 DEC 143.40 – 2.10
JAN 2085 + 21 MAR 147.10 – 2.10
MAR 2082 + 21 MAY 149.50 – 2.00
MAY 2094 + 21 JUL 151.50 – 2.00
JUL 2111 + 21 SEP 153.45 – 1.95
SEP 2111 + 21 DEC 155.75 – 1.95
NOV 2111 + 21 MAR 158.25 – 1.85
12th. April, 2013 More important in terms of the prevailing issues of Roya or Leaf Rust, is that heavy rains are conducive to the spread of this disease and likewise, the heavy rains have a negative impact upon the chemical spray controls for the preventative chemical controls being applied for this fungal disease. Thus in terms of the potential for these storms to be more violent ahead of the harvest of the majority of the new crop cherries having ripened, would increase the potential for Roya damage for this important fine washed arabica producer bloc’s next crop. Thus one might say that in terms of the market for the last quarter of this year and with undoubtedly increased storms aside that the Central American producers shall use Roya as reason to forecast market manipulative lower crop figures, that there is added potential for more bullish speculative sentiment for the New York arabica coffee market. We would therefore speculate that the might be good reason to forecast this related futures market to look break out of the present trading range and with the potential for improved value restraining Brazilian selling, to see this market trading in a much improved range of around 170 to 185 usc/Lb. by the last quarter of the year. In terms of weather and no doubt in resistance to the prevailing soft nature of the reference prices of the international coffee markets and with large stocks of past crop coffees in hand ahead of the new crop, there are statements of fear of weather issues being voiced from Brazil. This has resulted in repetitive comments that the good rains so far that have been experienced over the majority of the main arabica coffee districts, might be disruptive for the new crop harvest, which starts mid next month. One must however comment that looking at the rainfall reports for the month so far, that with the exception of South East Sao Paulo state and the Cerrado Mineiro, that all of the other coffee districts in Brazil have reported rainfall for the month so far, which is still less than the monthly average. Albeit that the coffee provinces in the main arabica coffee state of Minas Gerais are only 15% behind their modest 70 mm average rainfall for the month. Contrary to these fear stories of too much rain, the reality is that the favourable rains are in fact very beneficial for the development of the maturing coffee cherries, which would add to the potential weight of the coffee crop, which is presently foreseen to be a record down year crop at an overall 52 million bags. While the rains are assisting to build up the ground water retention levels with the majority of the main coffee districts, which adds to the ability of the coffee trees to resist the negative effects of any cold snaps during the cold June and July winter months, which would ensure that any mild frosts would be limited in their damage potential. There are meanwhile with internal market price resistance, only relative low volumes of trade for the existing Brazil stocks and with the prevailing low international coffee prices as a reference, slow forward selling of the new crop coffees. One might think that with new discussions due for the end of this month with their government authorities, that many farmers are living in hope that the evidence of the low international prices, that it might inspire their authorities to come forth with some form of buy in price support program. Such thoughts might be reason for many farmers taking a wait and see stance in terms of selling activity of stocks at hand and forward sales of the new crop, but should there be no such developments, it might inspire increasing levels of catch up selling for next month. In the meantime the slow selling activity and the resulting thin volumes of exporter hedge selling activity, is supportive for some degree of modest buoyancy for the New York market. Trade within both Vietnam and Indonesia for new crop robusta coffees has likewise slowed, in reaction to the recent decline in the value of the reference prices of the London market, with price resistance on the part of farmers and internal market traders. This is buoying exporter differentials for new business and with exporter price fixation hedge selling volumes relatively thin, it might be reason to believe in the potential for some modest buoyancy to soon come into play for the London market. The Certified washed arabica coffee stocks held against the New York market decreased by 275 bags yesterday, to register these stocks at 2,755,896 bags. There was meanwhile a 6,202 bags increase in the number of bags pending grading for the exchange, which were registered at 18,704 bags. The commodity markets were again mixed yesterday, albeit that the news of lower new jobless claims and the softer track of the U.S. dollar were supportive for sentiment within a number of the markets. The Natural Gas, Cocoa, Coffee, Copper, Cotton, Corn, Wheat, Soybeans, Gold, Silver and Platinum markets showed buoyancy, while the Oil, Sugar, Orange Juice and Palladium markets tended softer. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.07% lower, to see this Index registered at 546.69. The day starts with a near to steady U.S. Dollar that is trading at 1.539 to Sterling and 1.311 to the Euro, while Brent Crude is tending softer and is selling at 103.10 per barrel. The coffee markets had relatively steady start to trade yesterday, but with the markets trading within a narrow and generally sideways range into the afternoon. Later in the afternoon however and while the New York market tended to show steady buoyancy, the London market started to add some weight and take a more positive stance. The London market continued to end the day on a strong note and near to its highs, which was followed by the New York market ending the day with buoyancy and with 55.5% of the earlier in the day gains intact. This buoyant close and with the relatively soft dollar in play, would be seen to be supportive for a steady to buoyant start for early trade today, against the prices set yesterday, as follows: 11th. April, 2013 Meanwhile the National Coffee Council in El Salvador that had prior to the issues of Roya forecasted a 25% larger new crop to follow the relatively dismal weather affected 2011/2012 crop which would have been related to increased export volumes for this present coffee year, are now reporting that this new crop that has just been completed can now be expected to be 7.6% lower than the past crop, at a total of only 1.34 million bags. This report might be partially market manipulative in nature, but with an estimated 62% of the coffee farms in El Salvador suffering from Roya or Leaf Rust, there has to be some reality to the fact that this recent harvest must have experienced relatively severe damage and more so than most of the other producers in the region. The Uganda Coffee Development Authority has reported that the countries coffee exports for the Month of March was 123,695 bags or 65.94% higher than the same month last year, at a total of 311,290 bags. This sharp increase in exports is very much related to favourable weather conditions over the recent months, which has been positive for production and for a good flow of new crop coffees coming in to the countries exporters. While with exports picking up, the country should be very much on track to register exports for this coffee year, which shall exceed the targeted 3 million bags mark. The authorities in the Ivory Coast, who only produce robusta coffee, have reported that the countries coffee exports for the first five months of the October 2012 to September 2013 coffee year were 43,033 bags or 18.73% higher than the same period in the previous coffee year, at a total of 272,800 bags. This is a nice increase but is nevertheless a modest total, in terms of the forecasted 1.55 million bags of exports that are due for the present coffee year, which would indicate the potential for rising volumes of exports for the last seven months of this coffee year. It is always a question the production figures from the Ivory Coast that are related to the export volumes, as aside from the official coffee export figures that transit the countries mills within the port cities of Abidjan and San Pedro, there is the on-going matter of the unofficial exports of coffees smuggled through their neighbouring countries. These very much unquantifiable volumes of smuggled coffees might well still exceed 20% of total production and at a guess, the Ivory Coast can be expected to feed in excess of 2 million bags of robusta coffee per annum into the consumer markets. These Ivory Coast coffees having a strong support base from the North African countries and some of the Mediterranean rim markets in Europe. The Certified washed arabica coffee stocks held against the New York market increased by 6,862 bags yesterday, to register these stocks at 2,756,171 bags. There was meanwhile a 5,047 bags decrease in the number of bags pending grading for the exchange, which were registered at 12,502 bags. This somewhat stalled situation with the growth of the New York Certified stocks that had by now with the earlier forecasted overall increased new crop from Mexico and Central America been expected to be on a steady rise, reflects the past two months reaction to the incidence of the Roya or Leaf Rust infestation within this region. This issue has no doubt had an impact of perhaps an overall 2 million bags plus on potential production from this new crop, but more so has been the effect of this decline having inspired farmers and mills within the region to show price resistance to the negative nature of the reference prices of the New York exchange, which has resulted in thin selling activity of late. Thus one can expect that unless there is some presently unforeseen dramatic increase in the value of the New York market to inspire sales from the region that with a 61.72% share dominates these stocks, that these stocks are unlikely to start to build in any substantial manner before the third quarter of this year. The commodity markets were mixed yesterday, but with some markets suffering from the renewed muscle of the U.S. dollar. The U.S. Oil, Natural Gas, Sugar, New York arabica Coffee, Cotton and Corn markets had a firmer day, while the Cocoa, London robusta Coffee, Copper, Orange Juice and Soybeans markets tended softer and the Wheat, Gold, Silver, Platinum and Palladium markets were particularly soft for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.24% lower, to see this Index registered at 547.07. The day starts with a steady U.S. Dollar that is trading at 1.533 to Sterling and 1.306 to the Euro, while Brent Crude is relatively steady and is selling at 104.70 per barrel. The coffee markets had another mixed day yesterday and with the New York coffee market dominated by high volumes of switch trading from the prompt month, with both markets trading through the day on either side of the present trading range and with the London robusta coffee market having lost a little of its earlier in the year edge, and now only offering a relatively attractive 33.38% price discount to the New York arabica coffee market. The London market that had earlier in the day posted gains of $ 20.00 per Mt lost its way and ended the day on a softer note, but having recovered 58% of its earlier losses of the day by the close, while the New York market managed to retain its gains and ended the day on a positive note, but having shed 73% of its earlier gains of the day. This mixed close and with a steady U.S. dollar in play is likely to see a cautious and hesitant sideways stance taken for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 10th. April, 2013 It is by nature a relatively bearish report, as once adjusted by a couple of million bags higher in terms of the conservative nature of this report, it would indicate a surplus coffee supply for the present coffee year of approximately 7 million bags. The question now is how much effect upon longer term world coffee supply shall the forthcoming Roya affected October 2013 to March 2014 Mexican and Central American new crop have and on top of a potential 4 million bags lower new Brazil crop this year. The combined decline of these two factors of Central America and Brazil that could be as much as 7 million bags, is however potentially countered by the fact that there shall be a carryover stock into the new Brazil crop of close to 7 million bags of past crop arabica coffees and a potential 2 million bags increase in Colombia and Peru arabica coffee supply. This leaves the question over the potential for the next October 2013 to January 2014 harvest from Vietnam, which shall become a critical factor in terms of the longer term October 2013 to September 2014 coffee year world coffee supply. So far this crop is not foreseen to be realistically under threat, but the uncertainty of this should assist to buoy the markets to remain within the present trading range and potentially to assist to buoy value for the last quarter of the year. The official Coffee Institute in Honduras has meanwhile with the new crop harvest completed, reported that they have revised downwards their early in the year new crop forecast by 14.3%, as a result of the damage caused to their coffee farms by the Roya or Leaf Rust infestation. In this respect they now forecast that the country’s export potential for the present October 2012 to September 2013 coffee year shall be a relatively modest 4.2 to 4.3 million bags. Such a modest figure would result in exports for this coffee year being 21.5% to 23.3% lower than the 5,478,371 bags they exported in the previous 2011/2012 coffee year. One might question however with the earlier indications that only 25% of the coffee farms suffering from severe Roya infestation and with this problem not completely destructive for the crop, but only resulting in some losses, the somewhat extreme nature of this latest reduction in their crop forecast. Especially so as prior to the issues of Roya, the countries pre crop forecasts were rather for an approximate 5% increase and therefore an export potential of 5.75 million bags and in this respect one has to consider this latest forecast to be market manipulative in nature and related more to a reaction to the prevailing soft reference prices of the New York market, rather than to reality. Meanwhile there is a degree of internal market price resistance on the part of Vietnams farmers, who are tending to hold back new crop robusta coffee stocks with demands for relatively high prices, in reaction to the declining value of the reference prices of the London market and the resulting softer offers from the countries exporters. The farmers have some degree of muscle in this respect as with many exporters holding forward sale commitments to fulfil, they are under pressure to pay up to cover such sales and while paying up for new stocks. Thus exporters are being forced to inflate differentials for new business with the consumer market roasters, which is slowing selling activity for the present, from this leading robusta coffee supplier. The Certified washed arabica coffee stocks held against the New York market increased by 4,860 bags yesterday, to register these stocks at 2,749,309 bags. There was meanwhile a 5,445 bags decrease in the number of bags pending grading for the exchange, which were registered at 17,549 bags. The commodity markets gained some inspiration yesterday from the softer nature of the U.S. dollar and the news that China’s inflation was under control, which were factors that indicated positive demand. The Oil, Sugar, Cocoa, Copper, Orange Juice, Corn, Wheat, Soybean, Gold, Silver, Platinum and Palladium markets had a positive day, while the Natural Gas, Cotton, Coffee and Wheat markets bucked the trend and had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.57% higher, to see this Index registered at 548.41. The day starts with the U.S. Dollar tending to steady and trading at 1.532 to Sterling and 1.307 to the Euro, while Brent Crude is again tending softer in early trade and is selling at 104.80 per barrel. The New York coffee market started the day yesterday with some degree of buoyancy, while the London market followed with a softer opening. The New York market did however come under bouts of negative pressure through the morning and into the afternoon, which resulted in dips back into negative territory, while the London market remained on its softer track. Late in the afternoon however and contrary to the positive nature of the macro commodity index, the New York market fell back and joined the London market in negative territory, but while the London market ended the day on a soft note and with 90% of its earlier losses of the day intact, the New York market did manage to recover 58% of its earlier losses of the day by its modestly softer close. This overall soft close and with the U.S. dollar starting the day on a steadier note, is unlikely to be supportive for little better than a steady start for the markets today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 9th. April, 2013 The well respected German commodity analysts F. O. Licht contributed to negative market sentiment within the New York arabica coffee market, with their statement that due to near perfect weather conditions in Brazil, that the countries new 2013 crop that is soon to start being harvested, shall be a record down year crop for the country. There is no doubt amongst most world trade and industry players that this new Brazil crop shall be a good one, but such a statement from a leading and generally conservative forecaster has its impact. There is meanwhile continued frustration on the part of the coffee famers in Brazil over the inability of the state to have come forth with any real coffee price support formulae and program at their end March monthly meeting, which they had hoped would come forth in time to provide some degree of price support for their significant 2012 crop stocks of mostly arabica coffees. These stocks likely to fuel a carryover stock of in excess of 7 million bags into the new Brazil crop, which many are forecasting to be in excess of 52 million bags. The Brazil Ministry of Agriculture has however stated that the countries Federal Monetary Council shall once again have this matter on their agenda for the end April meeting and discussions, but this is no guarantee that there shall in fact be any price support plan forthcoming. The hope however of something supportive still to come does to a degree assist to inspire price resistance on the part of the more financially strong farmers and thus, delays the full potential of the negative impact of pre harvest Brazil stock liquidation upon the New York market. One might however speculated that if the end April meeting is seen to bring nothing new in the way of price support mechanisms for the countries arabica coffee farmers, that many exhausted farmers might start liquidating stocks and with the related negative pressure upon the New York market. Meanwhile the talk of drought with the Vietnam market that was in reality in terms of it being the dry season for the country very much market manipulative, is now that there have been some early rains, very much on the wane. There are some who still talk drought and very much so against any dip in value for the London robusta coffee market, but with forecasts that there is no reason to fear a normal May to September rain season, this issue of drought is presently not encouraging the speculative bulls. The new crop harvest in Mexico and Central America is over, but it is really only once the exports up to October have been recorded, that one shall really be able to accurately assess the approximate sizes of the individual crops from the producers within this region. Many are talking often excessive Roya related losses for the present crops, but one also suspects that there are considerable quantities of new crop coffees within the region, which are being held back in the hope of some improvement in the value of the reference prices of the New York market. Meanwhile there are frequent rain showers being experienced within the Central American region, which would be seen to be a near perfect start for the post-harvest flowerings for the next new, year end and early in the New Year crops. Rains do of course also assist the Roya fungal disease to spread, but the majority of Central American producer blocs governments already have finance allocated for farm input support programs to combat the disease and one might think that while there shall of course be some damage, that the degree of loss of crop shall be much less than many have been forecasting. Perhaps the more potentially damaging issue for this regions coffee is not the issue of the finance of controls for Roya, but the demotivation for many coffee farmers to want to invest in the support of their coffee, while they struggle with non-profitable prices for their present new crop coffees. The Certified washed arabica coffee stocks held against the New York market increased by 1,178 bags yesterday, to register these stocks at 2,744,449 bags. There was meanwhile a 2,790 bags decrease in the number of bags pending grading for the exchange, which were registered at 22,994 bags. The commodity markets while mixed encountered general support yesterday, as with a softer U.S. dollar and many markets being seen to have been over sold in the recent days of decline, it attracted selective technical buying support. The Oil, Sugar, Cocoa, Copper, Wheat, Corn, Soybeans, Platinum and Palladium markets registered a day of buoyancy, while the London robusta Coffee market was steady and the Natural Gas, Gold and Silver market were marginally lower, but with the New York arabica Coffee, Cotton and Orange Juice markets having a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.13% higher, to see this Index registered at 545.30. The day starts with the U.S. Dollar tending softer and trading at 1.527 to Sterling and 1.305 to the Euro, while Brent Crude is again tending softer in early trade and is selling at 104.05 per barrel. The New York coffee market started the day yesterday with some early modest losses and in thin trade, but very soon recovered back into modestly positive territory. This was followed by a similar pattern for the London market, which likewise soon after a softer opening, recovered back into positive territory but with the New York market settling back into mostly negative territory into the afternoons trade, while the London market maintained a mostly positive track. The New York market continued to lose some more weight which has some influence upon the London market that started to once again slip south, but to recover in the late afternoon and end the day on a steady note, while the New York market came under further pressure to end the day on a soft note and with 82.5% of its earlier losses of the day intact. This close does little inspire confidence, but one might expect that the sharp losses in New York might attract some roaster price fixation buoyancy for the New York market, while the London market might settle back a little for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 8th. April, 2013 During this week of trade the Non Commercial Speculative sector of the New York market is seen to have reduced their net short sold position within the market by 7.19%, to register a net short sold position of 36,188 Lots. This net short sold position which is the equivalent of a substantial 10,259,138 bags is likely to have been further reduced in line with the overall positive nature of trade that this market encountered for the latter half of last week and likewise, the Managed Money Funds can be expected to have reduced their short position within the market. With improved weather conditions over most of last year and into this year, the Coffee Federation in Colombia have reported that coffee production during the month of March was 41,000 bags or 7.12% higher than the same month last year, at a total of 617,000 bags. Similarly they have reported that the countries coffee exports for the month were 74,000 bags or 12.25% higher than the same month last year, at a total of 678,000 bags. This scenario of exports in excess of production for the month and despite the soft nature of the reference prices of the New York market, might be seen to reflect the countries farmers and exporters confidence in a larger new Mitaca crop due to be harvested from May to July this year. This crop expected to contribute to a much improved overall production for the year, of in excess of 10 million bags. The final and more detailed March coffee export figures from Brazil were announced on Friday by the countries Council of Green Coffee Exporters, with green coffee exports for the month reported at 230,000 bags or 11.5% higher than the same month last year, at a total of 2.23 million bags. The report also confirmed that the country’s exports of value added soluble coffees calculated in terms of their green coffee equivalent were 33,832 bags or 13.41% higher than the same month last year, at a total of 286,067 bags. The total coffee exports for the month were therefore 263,832 bags or 11.71% higher than the same month last year, at a total of 2,516,067 bags. The concern is for the countries coffee farming industry is that despite the significant rise in exports for the month and with still substantial stocks of unsold 2012 crop arabica coffees in stock, that the value of the coffee exports for the month of March was 99 million U.S. dollars or 17.52% lower than the same month last year, at a total of 466 million U.S. dollars. This lower value well illustrates the concerns of the farmers who have significant stocks of new crop coffees at hand and are being obliged to sell these coffees against the reference prices of the softer international coffee market, which is threatening profitability for sales of their coffee stocks that many would like to liquidate, ahead for the pending new crop harvest. The Certified washed arabica coffee stocks held against the New York market decreased by 673 bags on Friday, to register these stocks at 2,743,271 bags. There was meanwhile a 275 bags decrease in the number of bags pending grading for the exchange, which were registered at 25,784 bags. The Certified robusta coffee stocks held against the London market posted no change in the two weeks of trade leading up to Monday 1st. April, when these stocks were registered at 2,040,000 bags. This lack of change is despite the surge in export volumes of robusta coffees during the month of March, but follows a relatively low export performance in February and one might expect that despite the strong consumer market demand for robusta coffees that the March shipments might be seen to have modestly buoyed these stocks, when they are next reported on the 20th. of this month. The commodity markets were mixed on Friday, but with little in the way of emotive support following the news of much lower than expected rise in employment figures for the month of March in the U.S.A. These figures were however supportive for a modest reversal in the fortunes of the U.S. dollar, which did assist selected markets to add some value albeit that many speculate that the macro commodity index is still on a short term downside track. The Natural Gas, Sugar, New York arabica Coffee, Orange Juice, Wheat, Corn, Gold, Silver, Platinum and Palladium markets experienced buoyancy, while the Copper, Cocoa and London robusta Coffee markets tended softer and the Oil, Cotton and Soybean markets had a soft day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% higher, to see this Index registered at 544.61. The day starts with the U.S. Dollar tending to steady following Fridays losses and trading at 1.531 to Sterling and 1.297 to the Euro, while Brent Crude is tending softer in early trade and is selling at 103.65 per barrel. The New York coffee market started the day on Friday under pressure and with cautious and erratic trade taking both markets lower as the day progressed and to see the New York market at one stage posting losses of 1.55 usc/Lb. and likewise, the London market posting losses of $ 19.00 per mt. The markets did however and with some assistance from a softer U.S. dollar and underlying consumer roaster price fixation buying recover from the downside track and into positive territory, but with the London market floundering and ending the day on a softer note but having recovered 79% of its earlier losses of the day. The New York market fared better than the London market however, to end the day on a positive note, but having lost 46% of its earlier gains of the day. This mixed close and the steadier nature of the U.S. dollar is unlikely to do much more than inspire a steady close for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
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