16th. April, 2015.
The Vietnam Customs have reported that the country’s coffee exports of mostly robusta coffees for the month of March were 52.4% lower than the same month last year, at a total of 2,175,000 bags.  This volume is higher than general trade and industry expectations which had foreseen exports to register between 1,50 and 1,83 million bags but is in line with the government projection for the same month.  This sees the exports for the first six months of the present October 2014 to September 2015 coffee year at a total of 10,833,333 bags and a decline on that of the same time in the previous coffee year, at 25.40%.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 116,443 bags or 2.31% during the month of March, to register these stocks at 5,035,109 bags at the end of the month.   These stocks do not include the in transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is fed by these stocks of 490,000 bags per week, would conservatively have been at least 1 million bags.  These stocks include the certified coffee stocks that were being held in U.S.A. warehouses for the exchange at the end of the month, at a relatively modest total of 693,243 bags on the day. 

The arbitrage between the markets has broadened yesterday to register at 54.43 usc/Lb., while this equates to a now less attractive 40.07% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,929 bags yesterday; to register these stocks at 2,305,013 bags.   There was meanwhile 3,463 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 18,362 bags.

The commodity markets were mixed yesterday, with some degree of buoyancy returning to the Oil markets with the release of lower than anticipated crude oil inventory data in the leading US consumer market.  The US Dollar meanwhile, initially firmer in morning trade, to apply pressure on US Dollar priced commodities, slipped back toward the latter half of the day.  It was a firmer day for Oil, Natural Gas, Copper, Orange Juice, Corn, Soybean, arabica Coffee, Gold, Silver, Platinum and Palladium.  It was a softer day for Sugar, Cocoa, robusta Coffee, Cotton and Wheat markets, which tended easier for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.73% higher to see this Index registered at 422.00.  The day starts with the U.S. Dollar steady and trading at 1.483 to Sterling and 1.069 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 63.15 per barrel.   

The coffee markets started the day yesterday in a relatively muted tone, in low volume and with trade mildly to the positive in London and narrowly softer in New York.  The morning progressed in a lacklustre manner lacking directional news to provide inspiration to the speculative sector, whereas the softer US Dollar in latter day trade provided impetus to the arabica market.  This market gathered momentum as the Americas’ came to the floor and after a hefty volume day of trade, settled on a positive note.  It was an inside day for London however, which continued to trade within a mostly positive but narrow range, to set the close marginally softer on the day, to register the close on both markets against the prices set yesterday, as follows:

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

MAY     1794 + 1         MAY 135.80 + 1.30 
JUL      1818 – 2 JUL 137.35 + 0.70 
SEP      1841 – 4 SEP 140.00 + 0.55
NOV     1855 – 5 DEC 143.70 + 0.40
JAN      1865 – 5 MAR    147.50 + 0.35
MAR     1878 – 8 MAY    149.80 + 0.35
MAY     1894 – 8 JUL     151.55 + 0.30
JUL      1910 – 8 SEP     152.95 + 0.30
SEP      1928 – 8 DEC    154.65 + 0.45
NOV     1931 – 8 MAR    157.45 + 0.60

15th. April, 2015.
The Brazilian Institute of Geography and Statistics have come forth with their latest forecast for the new Brazil coffee crop at a very modest 42,525,683 bags, which is 2,624,751 bags or 5.81% lower than their assessment of the previous 2014 crop.   This forthcoming new crop they relate to 31,342,467 bags of arabica coffees and 11,183,216 bags of conilon robusta coffees, which is a forecast in terms of the arabica coffees that falls well below most others, while the conilon robusta figure is in line with many others that have come into play over the last month.

This forecast follows the latest forecast by Citi Commodity News which has significantly increased by 7.3% its previous forecast at the beginning of December 2014 for a new 2015 Brazil crop, to now forecast the new Brazil coffee crop at 48 million bags.   Thus adding to the wide range of forecasts that over the past few weeks indicate new crop figures that range between 42.7 million and 49.75 million bags, as against a combined domestic market and export market demand that one might foresee to be approximately 53 million bags.

This latter demand figure for Brazil coffees in the coming twelve months and including approximately 21 million bags of coffee for their domestic market has been lowered in terms of the export market demand over the previous twelve months, as this demand included relatively high volumes of surplus to domestic market demand conilon robusta coffee exports.  Thus with the generally agreed perception that conilon robusta crop this year shall be lower and advantageous international buyers of these robusta coffees over the past year shall revert back to the Asian and African robusta coffees, while one might expect to see arabica exports to remain relatively steady to the fore.

The International Coffee Organisation have forecasted that for the present October 2014 to September 2015 coffee year that the world production is approximately 142 million bags and therefore, shall result in an 8 million bags deficit production.   This figure does however include a Brazil 2014 crop of 45,342,000 bags, which is approximately 2.5 million bags to 3.5 million bags below many leading and well respected trade house estimates and might by nature; lessen the deficit to a more modest 4.5 million to 5.5 million bags. This is really a deficit factor that shall easily be covered by the substantial world coffee stocks that were on hand, at the start of this present crop year.  

The arbitrage between the markets has broadened yesterday to register this at 54.10 usc/Lb., while this equates to a now less attractive 39.59% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 598 bags yesterday; to register these stocks at 2,308,942 bags.   There was meanwhile a larger in volume 6,405 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 21,825 bags.

The commodity markets were mixed yesterday, with some degree of support coming to many markets from a marginal easing of the value of the dollar.  The Oil, Natural Gas, Sugar, Cocoa, Coffee, Orange Juice, Corn and Soybean markets had a day of buoyancy, while the Cotton, Copper, Wheat, Gold, Silver and Platinum markets tended easier for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.61% lower; to see this Index registered at 417.03.   The Reuters Equal Weight Commodity Index that is made up from 17 markets is 0.46% higher; to see this Index registered at 418.97.   The day starts with the U.S. Dollar steady and trading at 1.476 to Sterling and 1.064 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 58.20 per barrel.   

The London market started the day on a softer note, while the New York market started the day on a hesitantly steady note.  The New York market did however soon start to show some modest buoyancy, while the London market remained south of par and with the New York market faltering and joining the London market on a modestly negative track into the afternoon trade.  Both markets did however recover and move back into positive territory as the afternoon progressed, albeit a very erratic time for the New York market which struggled to maintain the new found gains.   The day progressed with erratic trade and the London market ended the day on a modestly positive note and with 31.2% of the earlier gains of the day intact, while the New York market ended the day with likewise modest gains and with 23.1% intact.    This provides little in the way of direction and one might think that there shall be only a hesitantly near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1793 + 4                                                 MAY     134.60 + 0.85
JUL      1820 + 5                                                  JUL     136.65 + 0.45
SEP      1845 + 6                                                 SEP     139.45 + 0.40
NOV     1860 + 8                                                  DEC    143.30 + 0.35
JAN      1870 + 8                                                 MAR    147.15 + 0.35
MAR     1886 + 8                                                 MAY     149.45 + 0.30
MAY     1902 + 8                                                  JUL     151.25 + 0.30
JUL      1918 + 8                                                  SEP     152.65 + 0.35
SEP      1936 + 8                                                  DEC    154.20 + 0.40
NOV     1939 + 8                                                  MAR    156.85 + 0.30

14th. April, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net short sold position within this market by 53.47% in the week of trade leading up to Tuesday 7th. April;  to register a net short sold position of 4,613 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market increased their net long position within the market by 0.75%, to register a net long on the day of 25,412 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market decreased their net short sold position within the market by 36.52%, to register a net short of position of 9,063 Lots.   This net short sold position which is the equivalent of 2,569,320 bags has most likely been increased over the period of mixed but overall more negative trade that has since followed and likewise, that of the Managed Money fund sector of the market.

The latest Commitment of Traders report from the London robusta coffee has reported that the more speculative Managed Money sector of this market decreased their net long position within this market by 1.27% in the week of trade leading up to Tuesday 7th. April, to see this long position registered at 11,218 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 1,869,667 bags has most likely been little changed, over the period of mixed but overall relatively steady trade that has since followed.

The National Coffee Council in El Salvador have announced that the countries coffee exports for the month of March were 22,914 bags or 27.08% higher than the same month last year, at a total of 107,530 bags.   This improved performance has contributed to the countries cumulative exports for the first six months of the present October 2014 to September 2015 coffee year to be 39,870 bags or 15.25% higher than the same period in the previous coffee year, at a total of 301,307 bags.

These figures based on the month by month announcements from the El Salvador Coffee Council, as in yesterday’s report there have been some marginal historic adjustments to bring the exports for the first six months to be marginally higher, at a total of 303,065 bags.   They are nevertheless positive numbers for this small Central American producer, which was particularly devastated by the Roya or Leaf Rust infestation over the previous two years and is now on an upside recovery track.

The Department of Agriculture of the Chinese province of Yunnan have reported in a press interview that the province that accounts for over 85% of Chinese coffee production had last year 124,667 hectares of coffee farms, which produced 1.97 million bags of coffee in 2014.   Of this they report 807,150 bags or close to 41% of the production of mostly washed arabica coffee, was exported during the year and with earnings of 141.91 million U.S. dollars, which made coffee the provinces third largest agricultural export income earner, after vegetables and tobacco.    One cannot however confirm how accurate these quoted figures are, as they do exceed many other private trade and industry figures, but there remains no doubt that China is both steadily increasing its arabica coffee production, as has it become an active exporter of arabica coffees to the consumer markets.   

Within the report, they also note that there is a slow but steadily growing domestic coffee market and that the forecast are that with Yunnan’s coffee farmers presently gaining relatively reasonable financial returns from coffee and gaining technical support from international consumer market companies such as Nestle and Starbucks and some of the international coffee traders, that the province is due to see many more farmers coming into the industry.  In this respect they forecast that over the next five years that coffee farms shall expand to cover approximately 166,667 hectares and with a potential production by 2020, which shall exceed 3.3 million bags per annum.

The arbitrage between the markets has narrowed yesterday to register this at 53.87 usc/Lb., while this equates to a now less attractive 39.55% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,049 bags yesterday; to register these stocks at 2,308,344 bags.   There was meanwhile a smaller in volume 4,734 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,230 bags.

The commodity markets were mixed yesterday but are now not only under pressure from the muscle of the U.S. dollar, but also from indications of less than forecasted growth for the Chinese economy.   The Oil, Sugar, Cocoa and Cotton markets had a day of buoyancy, while the Natural Gas, Coffee, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.61% lower; to see this Index registered at 417.03.   The day starts with the U.S. Dollar steady and trading at 1.466 to Sterling and 1.055 to the Euro, while North Sea Oil is steady in early trade and is selling at 57.65 per barrel.

The London market started the day on a marginally softer note, while the New York market showed some modest buoyancy, but with both markets tending softer in early afternoon trade.   The New York market did however pick us some support as the afternoon progressed and recovered its losses of last Friday, while the London market remained under pressure and extended the earlier losses.  The New York market continued to extend its recovery but faltered later in the afternoon and to tumble back to join the London market in negative territory.  The London market continued to end the day on a soft note and with 64.7% of the losses of the day intact, while the New York market ended the day on a likewise softer note and with 71.7% of the earlier losses of the day intact.   This overall soft close is unlikely to inspire and is most likely to influence a follow through 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     1789 – 24                                               MAY      133.75 – 1.35
JUL      1815 – 22                                                JUL      136.20 – 1.65
SEP      1839 – 21                                               SEP      139.05 – 1.70
NOV     1852 – 23                                                DEC     142.95 – 1.70
JAN      1862 – 25                                               MAR     146.80 – 1.65
MAR     1878 – 25                                               MAY     149.15 – 1.65
MAY     1894 – 25                                                JUL     150.95 – 1.60
JUL      1910 – 25                                                SEP     152.30 – 1.20
SEP      1928 – 25                                                DEC     153.80 – 0.75
NOV     1931 – 25                                                MAR     156.55 – 0.60

13th. April, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market decrease their net short sold position within the market by 36.52% during the week of trade leading up to Tuesday 7th. April;  to register a net short sold position of 9,063 Lots.   This net short sold position which is the equivalent of 2,569,320 bags has most likely been increased over the period of overall negative trade, which has since followed.

The repetitive forecasts for a lower Brazil new crop by many trade and industry players and repeated on Thursday last week by the Florida based coffee traders with Wolthers Douque USA, as they are not unsurprisingly supported by the traditionally conservative official forecasts, are presently not have too much in the way of supportive influence within the New York arabica coffee market.   This is perhaps related to the fact that these forecasts mostly indicate a larger new arabica crop is due this year and with the their foreseen dip in production being related to a sharp dip in conilon robusta production from within the province of Espirito Santo, which experienced an approximately six weeks dry spell at the  start of this year.

The New York market with the Brazil new crop factor aside thus ended the week on the back foot last week, with the firm U.S. dollar and the soft macro commodity index having a negative impact, while in terms of fundamentals there are still relatively large stocks of new crop Central American coffees still due to come to the market and with the resulting negative impact of price fixation hedge selling that shall come with these coffees.    While on the near horizon is the larger new Peru fine washed arabica coffee crop which shall come into play with the potential for a large new Mitaca crop from Colombia, to add to potentially add to the producer selling activity over the market.

With the prospects for a sharp dip in conilon robusta exports from Brazil as the year progresses and with continued price resistance on the part of farmers within Vietnam who have been slowing the delivery of their new crop robusta coffee stocks, there remains a degree of buoyancy for the London robusta coffee market.    The question in this respect remains with the pending selling activity that can be expected to come with the prospects for a larger new Indonesian robusta coffee crop that is soon to start coming to the market in more volume and shall the competition of these coffees, finally start to trigger some more selling aggression within the internal market in Vietnam.  

Meanwhile with these activities within the internal market in Vietnam contributing to relatively firm asking differentials for exporters of robusta coffees, the consumer market industries only have to work on a need to buy basis and maintain a steady fill in buying policy.   In this respect one should keep in mind that finally with the forecasts for the prospects for another larger new robusta crop due for the last quarter of this year and the possibility that should the summer rain season in Vietnam prove to be normal and support such forecasts, that this might aside from rising supply from Indonesia, influence more internal market supply within Vietnam and more market related export differentials for medium to longer term robusta supply from the country.  Thus it would seem that while Vietnam is still showing price resistant restraint and so long as there are no weather issues for the country in the coming months, that there has to be a break to this resistance due on the medium term.    
 
The arbitrage between the markets has narrowed on Friday to register this at 54.53 usc/Lb., while this equates to a now less attractive 39.56% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,391 bags on Friday; to register these stocks at 2,302,295 bags.   There was meanwhile a larger in volume 10,632 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,964 bags.

The commodity markets were mixed on Friday and with many markets still under pressure from the firm U.S. dollar, but with fundamentals seemingly assisting to support many of the markets, to steady the overall macro commodity index for the day.  The Oil, Natural Gas, Sugar, London robusta Coffee, Copper, Wheat, Gold, Silver and Platinum markets had a day of buoyancy, while the New York arabica Coffee, Cocoa, Cotton, Orange Juice, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher; to see this Index registered at 419.60.   The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.458 to Sterling and 1.058 to the Euro, while North Sea Oil is steady in early trade and is selling at 57.30 per barrel.

The London market started the day on a steady note on Friday and the New York market with a degree of buoyancy, but this was short lived and while the London market maintained a steady stance the New York market slipped back into negative territory and started to experience increasing selling pressure and further losses as volume picked up through the afternoon trade.    The London market shrugged off any negative influences coming from the soft New York market and started to build on its gains through the afternoon and to end the day on a positive note and with 83.3% of the gains of the day intact, while the New York market ended the day on a soft note and with 63.9% of the losses of the day intact.   This mixed close likewise provides mixed signals, but with the apparent softness seen within the New York market one might expect to see a marginally softer start for the London market and perhaps a hesitantly steady start for the New York market for early trade today against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1813 + 22                                               MAY      135.10 – 2.35
JUL      1837 + 20                                                JUL      137.85 – 2.30
SEP      1860 + 19                                               SEP      140.75 – 2.25
NOV     1875 + 19                                               DEC      144.65 – 2.25
JAN      1887 + 19                                               MAR     148.45 – 2.25
MAR     1903 + 19                                               MAY     150.80 – 2.20
MAY     1919 + 19                                                JUL     152.55 – 2.20
JUL      1935 + 19                                                SEP     153.50 – 2.10
SEP      1953 + 19                                                DEC     154.55 – 2.05
NOV     1956 + 19                                                MAR     157.15 – 2.10

10th. April, 2015.
The Florida based coffee traders with Wolthers Douque USA who have a traditionally strong Brazilian relationship have forecasted that the new Brazil crop that is already starting in terms of the conilon robusta harvest, shall be 3.14% higher than their estimate for the past 2014 crop, at a total of 45.6 million bags.   There is however already some question on their assessment of the previous crop being approximately 3.5 million to 4 million bags lower than many other reliable private trade and industry assessments of the past crop and therefore, there might be some question on the relatively modest figure that this trade house is forecasting for the new crop.   

Meanwhile within Brazil the internal market supply of stock coffees has slowed, with a the firmer nature of the Brazil Reais contributing to price resistance and thus impacting upon very short term selling activity on the part of the exporters.   Most exporters do however already have good volumes of forward sales commitments to still fulfil, as have most consumer market industries got good short to medium term cover on their books and this slowing of sales activity has no significant impact upon global supply of Brazil coffees.  But it is something of a problem for consumer buyers looking for short term fill in supply of Brazil coffees, as they have to pay up relatively high differentials to secure such coffees.

There are no weather issues presently coming to the markets from Brazil, following the past few weeks of good rains and to contrary and while there are many months still to the fore in terms of weather, the trees are looking to be in very good shape for the prospects for a good flowering in October and a good follow on crop in the coming year.    These are however early days and with the unlikely to be damaging frost season on the nearby horizon aside, the big question shall be what will be the quality of the new spring and summer rain season that comes into play late in September, which shall be critical for the prospects for the next 2016 crop.  

The well-respected Climate Prediction Centre in the USA has raised their potential for the pending El Nino phenomenon to a 70% factor, which might contribute towards a degree of confidence in the prospects for a normal to good spring and summer rain season for South Eastern Brazil and including the main coffee growing districts.   Traditionally an El Nino within the Pacific Ocean, brings with it higher rainfall for this region in Brazil and therefore, lessens the risk of a delayed start to the next rain season.   It might however as this phenomenon is expected to come into play in the coming month or two, bring rains into play during the traditionally relatively dry winter harvest season in Brazil, which might cause interruptions during this harvest and some risk of damage in quality rather than volume, for harvest coffees in their patio drying process.  

The pending joining of the Mondelez International and D. E. Master Blenders 1753 coffee business in Europe which is still awaiting approval by the EU competitions board is seemingly going to encounter further delays, as the sale of the Mondelez International Carte Noire Brand to Lavazza that would be expected to satisfy the competitions board, is apparently still some way from being concluded.    This indicated by a report yesterday that Lavazza only expects to make a decision on the matter by late June this year, which would most likely delay the prospects for the finalisation of an amalgamation of Mondelez International and D. E. Master Blenders 1753 into the second half of the year.   

The arbitrage between the markets has broadened yesterday to register this at 57.73 usc/Lb., while this equates to a now less attractive 41.19% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,912 bags yesterday; to register these stocks at 2,295,904 bags.   There was meanwhile a smaller in volume 222 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,596 bags.

The commodity markets were mixed yesterday, but with many experiencing a softer day’s trade and impacting negatively upon the overall macro commodity index for the day.    The Oil and New York arabica Coffee markets had a day of buoyancy and the London robusta Coffee market was steady, while the Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.65% lower; to see this Index registered at 419.42.   The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.469 to Sterling and 1.067 to the Euro, while North Sea Oil is steady in early trade and is selling at 55.90 per barrel.

The London and New York markets started the day on a softer track yesterday, which continued into the afternoon’s trade.    There was however support at the lows and the markets recovered in late afternoon trade, but while the New York market managed to hold on to its gains, the London market slipped back to par in late trade.   The London market continued to end the day on a steady note, while the New York market ended the day with modest buoyancy and with 66.7% of the gains of the day intact.   This rather uncertain close is unlikely to be supportive for confidence and one might expect that the markets are due for little better than a cautiously steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1791 + 1                                                 MAY     137.45 + 1.75
JUL      1817 unch                                               JUL     140.15 + 1.40
SEP      1841 + 1                                                 SEP      143.00 + 1.35
NOV     1856 + 2                                                  DEC     146.90 + 1.35
JAN      1869 + 3                                                 MAR     150.70 + 1.35
MAR     1884 + 3                                                 MAY     153.00 + 1.45
MAY     1900 + 3                                                  JUL     154.75 + 1.75
JUL      1916 + 3                                                  SEP     155.60 + 1.75
SEP      1934 + 3                                                 DEC     156.60 + 1.95
NOV     1937 + 3                                                  MAR    159.25 + 2.05

9th. April, 2015.
The National Coffee Organisation of Guatemala has reported that the country’s coffee exports for the month of March were 28,707 bags or 6.99% lower than the same month last year, at a total of 382,208 bags.   This poor performance follows many months of relatively low export volumes and the countries cumulative exports for the first six months of the present October 2014 to September 2015 coffee year are 226,167 bags or 18.02% lower than the same period in the previous coffee year, at a total of 1,028,901 bags.

It is difficult however to appropriate the relatively sharp dip in exports from Guatemala directly to the size of the just being completed new crop, as most forecasts have foreseen this crop to be similar to the last crop and one might rather appropriate the lower exports to the strong internal market price resistance that has this year inflated the asking export differentials for Guatemala coffees, relative to the competition of their neighbouring fine washed arabica coffee producers in Central America and Colombia.   While with a change to the VAT regulations within the country, there are prospects of lower volumes of neighbouring Honduras coffees crossing the border, to fly under the lower altitude grades but nevertheless relatively higher value Guatemala flag.

The Coffee Export Association of Brazil have reported that the country exported 213,000 bags or 8.4% more green coffee during the month of March than was exported during the same month last year, at a total of 2,749,000 bags.   The arabica coffee exports contributed 2,409,000 bags or 87.63% to this number, with conilon robusta coffees accounting for 340,000 bags or 12.37% of the exports.  

Meanwhile with these exports in March while taking place against a relatively soft market, were in terms of value related to the same month last year when prices were related to an even softer market start to 2014, the value of these exports were a greater 24% higher at 552.3 million U.S. Dollars.   However when one is to apply the fact that the Brazil Reais was trading at around 2.33 to the dollar during March 2014 as against and exchange rate of around 3.2 to the dollar during March this year, the value of exports in terms of local currency of the 8.4% increase in exports during March this year would have been approximately 70% higher in value than the same month last year.   A factor that clearly illustrates the supportive effects of the weaker Brazil Reais for the Brazilian coffee industry, as it sells against the price dictates of weakening international coffee prices.   Albeit that the Reais has since posted a modest recovery against the U.S. dollar this month and is presently trading at 3.05 to the dollar.

The European Coffee Federation port warehouse stocks were seen to increase by a modest 96,450 bags or 0.84% during the month of January, to end the month with stocks reported at 11,587,217 bags.    These stocks do not however include the onsite roaster inventory, bulk container transit and unreported private warehouse stocks which with the combination of west and east European consumption of around 980,000 bags per week, would most likely have been at least 2.5 million bags and therefore at a guess, total stocks as at the end of December of approximately 14 million bags.   Thus stocks that would exceed 14 weeks of the presently flat to often marginally lower roasting activity, which is a very safe level and allow for the European industries to be cautious rather than aggressive buyers.

The arbitrage between the markets has narrowed yesterday to register this at 56.33 usc/Lb., while this equates to a now less attractive 40.60% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,107 bags yesterday; to register these stocks at 2,299,816 bags.   There was meanwhile a smaller in volume 3,324 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,818 bags.

The commodity markets experienced a down day yesterday, with the macro commodity index taking a softer track for the day.   The Sugar, Cocoa, Cotton and Orange Juice markets had a day of buoyancy, while the Oil, Natural Gas, Coffee, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.15% lower; to see this Index registered at 422.16.   The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.486 to Sterling and 1.076 to the Euro, while North Sea Oil is steady in early trade and is selling at 55.55 per barrel.

The London market started the day on a near to steady note, while the New York market started with a degree of modest buoyancy and with the London market recovering to see both markets showing good buoyancy in early afternoon trade.   As the afternoon progressed however and with the negative nature of the overall macro commodity index in play and with the American trade coming into work, the New York market suffered from a relatively sharp reversal and with the dip in value triggering sell stops, to accelerate the losses and to influence a more modest reversal of fortunes for the London market.   The London market continued to end the day on a modestly softer note and with 88.9% of the losses of the day intact, while the New York market took as sideways soft track following it relatively high volume sharp dip and ended the day on a very soft note and with 91.7% of the losses of the day intact.   This overall soft close and one that was near to the lows of the day is likely to inspire a cautious and hesitant softer start relatively stable London market and perhaps a steady start for the New York market against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1790 – 16                                               MAY     135.70 – 6.25
JUL      1817 – 16                                                JUL      138.75 – 6.10
SEP      1840 – 15                                               SEP      141.65 – 6.00
NOV     1854 – 15                                               DEC      145.55 – 5.95
JAN      1865 – 17                                               MAR     149.35 – 5.95
MAR     1881 – 17                                               MAY     151.55 – 5.90
MAY     1897 – 17                                                JUL     153.00 – 5.75
JUL      1913 – 17                                                SEP     153.85 – 5.65
SEP      1931 – 17                                                DEC    154.65 – 5.70
NOV     1934 – 17                                                MAR    157.20 – 5.75

8th. April, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net short sold position within this market by 18.05% in the week of trade leading up to Tuesday 31st. March;  to register a net short sold position of 9,915 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market increased their net long position within the market by 1,71%, to register a net long on the day of 25,224 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market increase their net short sold position within the market by 6.8%, to register a net short of position of 14,275 Lots.   This net short sold position which is the equivalent of 4,046,899 bags has most likely been reduced over the period of mixed but overall more positive trade that has since followed and likewise, that of the Managed Money fund sector of the market.

The prevailing tight price resistance internal market in Vietnam where farmers and internal traders are holding back for higher value for their substantial stocks of new crop robusta coffee than what is being dictated by the reference prices of the London market, has traders predicting that the April export volumes might be from 15% to even as much as 53% lower than the exports last month, with estimates that vary between exports of 1 million to 1.83 million bags for the month.   There is however a perception on the part of many traders that no matter how good the finance facilities that are presently available to the farmers, that there has to be a break at some time in the not too distant future, which shall see the internal market conditions become somewhat easier.

In this respect with early spring and summer rains having fallen within many of the main coffee districts and contrary to earlier state forecasts for dry weather into the middle of next month, that this might suppress the fears of drought.  This being a factor that would be somewhat supportive for the many forecasts for a large new crop for the end of the year and by nature, might encourage farmers to become more willing sellers of their new crop stocks.

The new Brazil conilon robusta coffee crop has started to be harvested and is expected to be followed later on in May by the start of the new arabica coffee crop, with the conilon harvest from the farms within the state of Espirito Santo foreseen to be significantly lower due to the extended spell of dry weather during January and February this year.  However with the conilon robusta coffee harvest within the North West state of Rondônia expected to fare much better.   

A serious fire within the fuel storage depot in the leading Brazil port of Santos was in its sixth day yesterday, with the activities to counter the fire and to clean up where the fires have been contained, restricting many of the access roads to the port.    This is causing delays to many of the deliveries of commodities to the port and with the exports of soybeans and sugar having been highlighted to be particularly affected, but it is not clear as of yet how much it might disrupt scheduled coffee exports.     

The arbitrage between the markets has narrowed yesterday to register this at 61.71 usc/Lb., while this equates to a now less attractive 42.60% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,840 bags yesterday; to register these stocks at 2,294,709 bags.   There was meanwhile a larger in volume 9,415 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,494 bags.

The commodity markets saw many markets once again encounter the hurdle of a firming U.S. dollar yesterday, but with mixed fortunes within the markets the overall macro commodity index did nevertheless retain some buoyancy for the day.   The Oil, Natural Gas, Sugar, London robusta Coffee, Cotton, Copper, Wheat and Platinum markets had a day of buoyancy, while the Cocoa, New York arabica Coffee, Corn, Soybean, Gold and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% higher; to see this Index registered at 427.08.   The day starts with the U.S. Dollar tending steady and trading at 1.484 to Sterling and 1.085 to the Euro, while North Sea Oil is steady in early trade and is selling at 57.25 per barrel.

The London market returned from a very long weekend Easter holiday and predictably opened with catch up buoyancy yesterday, while the New York market had a slightly softer start to the day.     This remained the track into the afternoon, with the London market maintaining its new found muscle, while the New York market remained below par.   As the afternoon progressed and with the U.S. dollar showing some renewed muscle the New York market attracted further selling pressure and moved into a steeper downside track, while the London market maintained a sideways track along its positive platform.    The London market continued to end the day on a positive note and with 80.6% of the gains of the day intact, while the New York market ended the day on a negative note and with 84.2% of the losses of the day intact.   The inability of the New York market to hold on to its six week high recovery of the previous day does little to inspire and one might expect to see at best a steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1806 + 28                                               MAY      141.95 – 4.25
JUL      1833 + 29                                                JUL      144.85 – 4.00
SEP      1855 + 30                                               SEP      147.65 – 3.90
NOV     1869 + 29                                                DEC     151.50 – 3.95
JAN      1882 + 27                                               MAR     155.30 – 3.80
MAR     1898 + 26                                               MAY     157.45 – 3.75
MAY     1914 + 23                                                JUL     158.75 – 3.75
JUL      1930 + 21                                                SEP     159.50 – 3.70
SEP      1948 + 21                                                DEC    160.35 – 3.60
NOV     1951 + 21                                                MAR    162.95 – 3.50

7th. April, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market increase their net short sold position within the market by 6.8% during the week of trade leading up to Tuesday 31st. March;  to register a net short sold position of 14,275 Lots.   This net short sold position which is the equivalent of 4,046,899 bags has most likely been reduced over the period of positive trade, which has since followed.

The latest Commitment of Traders report from the London robusta coffee has reported that the more speculative Managed Money sector of this market decreased their net long position within this market by 1.77% in the week of trade leading up to Tuesday 31st. March, to see this long position registered at 11,362 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 1,893,667 bags has most likely been little changed, over the period of mixed but overall more positive trade that has since followed.

The National Coffee Institute of Honduras has reported that the countries coffee exports for the month of March were 285,736 bags or 46.42% higher than the same month last year, at a total of 901,311 bags.  This positive performance which follows the preceding positive months of exports contributes to the countries cumulative exports for the first six months of the present October 2014 to September 2015 coffee year to be 710,707 bags or 35.88% higher than the same period in the previous coffee year, at a total of 2,691,670 bags.

This cumulative coffee export figure from Honduras is based on the month by month export figures reported over the past six months is marginally higher than the National Coffee Institute’s report, which talks in terms of a marginally more modest cumulative figure of 2.56 million bags.   This is however nevertheless a very positive figure and illustrates both the fact that Honduras has just completed a much better new crop and that the farmers within the countries internal market have not been showing as much price resistance towards the negative nature of the reference prices of the New York market this year as has been experienced within their neighbouring Central American countries, which has assisted to buoy buying interest from the consumer market industries.

The Coffee Growers Federation in Colombia has reported that the countries coffee production for the month of March was 28,000 bags or 3.38% lower than the same month last year, at a total of 800,000 bags.   This does however follow a string of positive months and therefore contributes to the countries cumulative production for the first six months of the present October 2014 to September 2015 coffee year to be 220,000 bags or 3.67% higher than the same period in the previous coffee year, a total of 6,219,000 bags.

Meanwhile the Colombian Coffee Growers Federation have reported that the countries coffee exports for the month of March were 156,000 bags or 16.81% lower than the same month last year, at a total of 772,000 bags.   This dip in March exports being related more to the internal market transport strike during last month, which has disrupted the flow of exports for the month and contributed towards many late shipments.   This dip in exports does however follow the preceding months of good volumes of exports and contributes to the countries cumulative exports for the first six months of the present October 2014 to September 2015 coffee year to still being 94,000 bags or 1.6% higher than the same period in the previous coffee year, at a total of 5,958,000 bags.

The arbitrage between the markets has broadened yesterday to register this at 67.02 usc/Lb., while this equates to a now less attractive 45.03% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 685 bags yesterday; to register these stocks at 2,291,869 bags.   There was meanwhile a larger in volume 1,266 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 49,909 bags.

Some of the European based commodity markets were on holiday yesterday for Easter Monday, but many of the U.S. markets gained some support from the weaker nature of the U.S. dollar, which seemingly reacted to the slower growth in U.S. employment in March.   The Oil, Natural Gas, Cocoa, New York arabica Coffee, Cotton, Wheat, Corn, Soybean, Gold and Silver markets had a day of buoyancy and the Platinum market was steady, while the Sugar, Copper and Orange Juice markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.63% higher; to see this Index registered at 426.91.   The day starts with the softer U.S. Dollar tending steady and trading at 1.491 to Sterling and 1.094 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 56.95 per barrel.

The London market was closed for the Easter holiday yesterday to see the New York market trade solo and start the day marginally softer, but to soon recover into positive territory.   Meanwhile with the weaker dollar relative to the Brazil Real inspiring confidence and volumes that were mostly related to U.S.A. funds surprisingly building up during the afternoon, the market started to trigger buy stops and to accelerate the gains.   The market did however hit a ceiling and attracted some selling pressure at the highs of what turned out to be a relatively high volume day’s trade and closed the day on a positive note, with 83.6% of the gains of the day intact.   This positive close is perhaps supportive for some catch up buoyancy for the London market and for a steady start for the New York market for early trade today against the prices set in London on Thursday last week and New York yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1778 + 28                                               MAY      146.20 + 5.30
JUL      1804 + 26                                                JUL      148.85 + 5.10
SEP      1825 + 24                                               SEP      151.55 + 4.85
NOV     1840 + 22                                               DEC      155.45 + 4.80
JAN      1855 + 20                                               MAR     159.10 + 4.75
MAR     1872 + 18                                               MAY     161.20 + 4.70
MAY     1891 + 18                                                JUL      162.50 + 4.75
JUL      1909 + 18                                                SEP      163.20 + 4.70
SEP      1927 + 18                                               DEC      163.95 + 4.60
NOV     1930 + 18                                                MAR     166.45 + 4.75

3rd. April, 2015.
The negative nature of the reference prices of the London robusta coffee market over the past few weeks is causing intense pressure for many of the exporters in Vietnam, with many short sold exporters struggling to find affordable coffees to cover their short term short sold contracts.   There might however be some slight relief coming with the pre long weekend bounce that was experienced yesterday, but it is perhaps not enough to counter the potential for a number of late shipments that might result during the month of April.

The more impressive recovery for the New York market might bring some small relief for exporters in Brazil in terms of the presently tight price resistant internal market in Brazil, but this recovery has been matched by a recovery for the Brazil Real, which counters in terms of domestic prices much of the advantage that the New York market might offer for the exporters and for the present the asking export differentials for new sales of Brazil coffee remain relatively firm.   This situation being very much the case for most arabica coffee exporters, with the Central American exporters having to pay up for new crop coffee within their price resistant internal markets and with the similar result of having to demand relatively firm export differentials, relative to the volatile and still relatively soft New York market.

In terms of the development of the questionable in size new crop in Brazil, the month of March has experienced good rains for all of the main coffee districts and the ground water retention levels with the farms is reasonably good, ahead of the May to September relatively dry winter season.   This shall not only assist to lessen the stress for the coffee trees during the forthcoming new crop harvest season, but shall assist the cherries to fill out ahead of the harvest and lessen to a degree the negative effects of the unseasonal dry month of January and might perhaps make one lean more towards some of the more positive new crop forecasts at around 49 million bags.   

There is now a relatively long Easter break for the coffee markets and commodity markets in general, as while the New York markets shall return to work for a short trading day on Monday following today’s Easter Friday long weekend break, the majority in terms of volume coffee producers and consumer industry roasters shall remain on holiday until Tuesday next week.    Not that one can expect much in the way of active physical trade for Tuesday, as both producers and consumers shall be awaiting further assessment of the direction that the New York and London markets might take, following yesterday’s relatively positive recovery for the markets.

The arbitrage between the markets has broadened yesterday to register this at 61.92 usc/Lb., while this equates to a now less attractive 43.07% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 5,054 bags yesterday; to register these stocks at 2,291,184 bags.   There was meanwhile a smaller in volume 2,804 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 51,175 bags.

Many of the commodity markets gained some degree of support from the marginally weaker U.S. dollar yesterday, but with the influential Oil markets tending to falter.    The Natural Gas, Sugar, Cocoa, Coffee, Cotton, Orange Juice, Wheat and Corn markets had a positive day’s trade, while the Oil, Copper, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.36% higher; to see this Index registered at 424.22.   The day starts with the U.S. Dollar tending steady and trading at 1.482 to Sterling and 1.088 to the Euro, while North Sea Oil was softer yesterday and selling at 54.10 per barrel.

The London and New York markets started the day on a steady to soft note yesterday, but both markets soon started to attract some support and entered the afternoon on a positive note.   This set a good pre long weekend platform for the markets, which started to build upon their gains as the afternoon progressed and with stop loss buy stops being triggered to accelerate the gains for the more volatile New York market.    The London market continued to end the day on a positive note, albeit that there was a modest reversal near to the close and with 74.3% of the gains of the day intact, while the New York market maintained its steady upward track and ended the day on a very positive note and with 91.2% of the earlier gains of the day intact.    This positive close is perhaps supportive for sentiment for what can be expected to be a thinly traded New York market on Monday, while the London market shall have to wait to see the direction that shall be taken within New York for the day, to set its mood for trade on Tuesday next week.   Thus we would expect that New York shall start the day on a steady to perhaps buoyant track on Monday against the positive prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAY     1778 + 28                                               MAY      140.90 + 6.05
JUL      1804 + 26                                                JUL      143.75 + 5.70
SEP      1825 + 24                                               SEP      146.70 + 5.70
NOV     1840 + 22                                                DEC     150.65 + 5.70
JAN      1855 + 20                                               MAR     154.35 + 5.65
MAR     1872 + 18                                               MAY      156.50 + 5.70
MAY     1891 + 18                                                JUL      157.75 + 5.85
JUL      1909 + 18                                                SEP      158.50 + 5.95
SEP      1927 + 18                                                DEC     159.35 + 5.80
NOV     1930 + 18                                                MAR     161.70 + 5.70

2nd. April, 2015.
With the month of March over the Indonesian island of Sumatra which dominates the nations robusta coffee production has reported that the islands robusta coffee exports for the month of March were 41,147 bags or 21.31% higher than the same month last year, at a total of 234,268 bags.   This follows a relatively dismal performance over the first four months of the present coffee year and therefore the cumulative robusta exports from Sumatra for the first six months of the present new October 2014 to September 2015 coffee year are still 930,842 bags or 35.3% lower than the same period in the previous coffee year, at a total of 1,705,871 bags.

This relatively poor five month performance on the part of robusta coffee supply from Sumatra is of course related to a greater degree to a poor weather related crop last year and one can expect that for the short term and ahead of the new crop that starts to come into play during the second quarter of this year, that the figures shall continue to be relatively flat for the next two to three months.   However the weather conditions have been much improved and the prospects are for a much improved new crop, which should see the Sumatran robusta coffee exports start to pick up and become more aggressive by the third quarter this year and thereon for the last quarter of the present coffee year.

The National Coffee Institute of Costa Rica has reported that the countries coffee exports for the month of March were 846 bags or 0.52% higher than the same month last year, at a total of 165,021 bags.   This does however follow five months of price resistant slow export activity and the cumulative exports for the first six months of the present October 2014 to September 2015 coffee year are 41,760 bags or 7.76% lower than the same period in the previous coffee year, at a total of 496,552 bags.

The preliminary coffee export figure for the month of March in Brazil have been announced and with the country reporting that the coffee exports in March were 400,000 bags or 16.26% higher than the same month last year, at a total of 2.86 million bags.   This figure by nature of the relatively large volume reported is somewhat bearish for market sentiment, as while it does of course confirm that Brazil despite a modest deficit 2014 crop has been able to use their significant carryover stocks from the previous years to maintain good coffee supply, that there is seemingly not fear of a significantly large dip in the size of the new crop that would justify holding back stocks from the market.

Adding confusion to the mixed nature of new crop forecasts from Brazil the prominent local exporter Comexim has forecasted that the new crop shall most probably be only marginally 1.52% lower than the previous crop, at a total of approximately 48.6 million bags.    This forecast estimating that while the new arabica coffee crop shall be 2.2 million bags or 6.72% higher at 34.95 million bags, the dry weather affected new conilon robusta crop shall be 2.95 million bags or 17.77% lower at 13.65 million bags.   

Perhaps the most important factor in terms of these forecasts is the fact that they mostly all indicate that there shall be some improvement in the size of the new arabica coffee crop and with the losses being related to the conilon robusta coffee crop, which is not a coffee that is of as much concern to the main consumer markets.   These conilon robusta coffees are mostly related to the price sensitive sector of the Brazil domestic market and with exports being more dedicated to the advantageous rather than dedicated consumer market buyers at such times as there is surplus conilon robusta supply.

Thus one might suggest that if these forecasts are correct that there shall now be less conilon robusta coffees available for export which shall be covered by the presently adequate Asian robusta coffee supply, while there shall be additional arabica coffee supply to reduce the risk of longer term tightness of Brazil arabica coffee supply to the consumer markets.   Arabica coffee supply that has so far since mid-last year and shall be for the next twelve months, been supplemented by the significantly large carryover stocks of arabica coffees into the last deficit 2014 crop.   

The arbitrage between the markets has broadened yesterday to register this at 55.47 usc/Lb., while this equates to a now less attractive 41.13% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 10,231 bags yesterday; to register these stocks at 2,296,238 bags.   There was meanwhile a larger in volume 35,284 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 53,979 bags.

The commodity markets gained some degree of support from the news of slower growth for the U.S. economy for the first quarter of this year and a marginally weaker U.S. dollar, which buoyed the macro commodity index for the day.  The Oil, Sugar, Cocoa, Coffee, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Natural Gas, Cotton and Orange Juice markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.33% higher; to see this Index registered at 422.71.   The day starts with the U.S. Dollar tending steady and trading at 1.483 to Sterling and 1.078 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 55.95 per barrel.

The London market started the day on a steady note yesterday, while the New York market kicked off with a degree of buoyancy and with the New York market extending its gains into the afternoon’s trade and to be followed by modest buoyancy for the London market.    Later on in the afternoon and with volumes of trade building, the New York market started to react to the firmer nature of the Brazil Real and the prospects of slowing Brazil sales and extended its gains, which triggered buy stops to accentuate the rally, with the London market starting to likewise add some more weight.   The markets did however soon hit a ceiling and encountered profit taking selling to settle back from the highs, but to maintain along with the support from the overall macro commodity index a positive track through to the end of the day.    The London market continued to end the day on a positive note and with 77.8% of the gains of the day intact, while the more volatile New York market ended the day on a positive note and with only 28.26% of the earlier gains of the day intact.   The inability of the New York market to hold onto the major part of the rally might be a concern to the chartists and one might expect to see only a cautious steady pre long weekend start for the markets for early trade today, against the prices set yesterday, as follows:  

LONDON ROBUSTA US$/MT                          NEW YORK ARABICA USc/Lb.
                                                
MAY     1750 + 21                                              MAY      134.85 + 1.95
JUL      1778 + 20                                               JUL      138.05 + 1.95
SEP      1801 + 17                                              SEP      141.00 + 1.85
NOV     1818 + 17                                               DEC     144.95 + 1.85
JAN      1835 + 16                                              MAR     148.70 + 1.90
MAR     1854 + 19                                              MAY     150.80 + 2.00
MAY     1873 + 21                                               JUL     151.90 + 2.20
JUL      1891 + 21                                               SEP     152.55 + 2.20
SEP      1909 + 30                                               DEC    153.55 + 2.45
NOV     1912 + 30                                               MAR    156.00 + 2.70

1st. April, 2015.
Trade within the internal market in Vietnam was stalled yesterday, as the already price resistant and relatively high priced farmers and internal traders refused to follow the negative trend of the reference prices of the London robusta coffee market.  This is putting severe pressure upon such forward sold exporters who have yet to cover all the stocks required to cover their medium term commitments and there are fears being voiced that this might result in some delayed shipments, over the next couple of months.  

Many speculate that in excess of 50% of the new 27 million bags crop in Vietnam is still within the hands of the farmers and internal traders, which is a frightening factor in terms of the delivery potential of the exporters and their forward sold commitments.    While so long as the farmers hold out for higher relative to the London market and so long as there is no short term bounce, this situation might become much worse and for the present there are no signs that the farmers are ready to break and become more aggressive sellers.

Coex Coffee International with from its headquarters in Miami Florida have forecasted that the new Brazil crop shall be 6.18% lower than the previous 2014 crop, at a total of 45.08 million bags.    This relatively modest figure is very much in line with the recent forecasts that came from the brokers International F C Stone and the Neumann Gruppe Statistical Unit, but well below the earlier forecasts for the 2015 Brazil crop from Volcafe and Ecom, who have forecasted a new crop of in excess of 49 million bags.   

There is no question however that with a domestic coffee demand of close to 21 million bags and an export demand with a strong conilon robusta coffee domestic market component due to see lower conilon robusta exports dip over the next twelve months to possibly see overall export demand at around 32 million bags, that this shall be a deficit new crop.   The question is shall the deficit be 3.5 million bags or 8 million bags, which shall further deplete the diminishing carryover stocks into the new crop and by nature dictate the next 2016 crop shall have to well exceed 55 million bags, if there is not to be a severely tightening Brazil coffee supply for the 2016/2017 coffee year.

There is however with unforeseen damaging weather issues aside the prospects for a good recovery for the Brazil crop for next year and likewise, rising coffee production due for Central America, Colombia, Peru, Vietnam, Indonesia and Uganda and for the present, the indications are that there shall be good coffee supply for the follow on 2015/2016 and 2016/2017 coffee years.   But weather is unpredictable and while so for the present the prospects for longer term coffee supply might justify the soft nature of the New York and London coffee markets that are also being influenced by the soft nature of the bail out by the funds for commodities in general, one might expect that there is more chance of damaging weather issues to the fore than not and therefore, a good chance for a change in market sentiment and a recovery in prices for later in the year.

The International Coffee Organisation has reported that the world coffee exports for the month of February was 980,000 bags or 10.23% lower than the same month last year, at a total of 8.6 million bags.    This dip contributes to their figure for world coffee exports for the first five months of the present October 2014 to September 2015 coffee year to be 2.7% lower than the same period in the previous coffee year.   But this is not a reflection of tight coffee supply, but is rather the result of strong price resistance within the internal markets of most of the major producers, which is resulting in rising asking differentials for exports and less buying aggression on the part of the trade houses and consumer market industries.   A factor that is most probably resulting in a slow but steady liquidation of the still substantial consumer market coffee stocks, that are filling the gap created by lower overall volumes of producer coffee exports.  

The arbitrage between the markets has broadened yesterday to register this at 54.47 usc/Lb., while this equates to a now less attractive 40.99% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,271 bags yesterday; to register these stocks at 2,306,469 bags.   There was meanwhile a larger in volume 7,649 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 18,695 bags.

The commodity markets were mixed yesterday, but with the overall macro commodity index maintaining a softer track for the day.   The Natural Gas, Cocoa, Coffee, Cotton, Gold and Platinum markets had a day of buoyancy and the Soybean and Silver markets were steady, while the Oil, Sugar, Cotton, Orange Juice, Wheat and Corn markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.75% lower; to see this Index registered at 417.18.   The day starts with the U.S. Dollar tending marginally easier and trading at 1.485 to Sterling and 1.077 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 54.15 per barrel.

The London market started the day on a softer note yesterday, while the New York market had a steady start and while the New York market started to show some degree of buoyancy, the London market remained in negative territory into the early afternoon trade.   The New York market did however attract more support as the afternoon progressed and to add some more value, which seemingly had its influence to see the London market recover to just above par.    The New York market continued to show some muscle and with the London market adding some value as the afternoon progressed and with good volumes of trade coming into both markets, but with both the markets coming under pressure at the highs and reversing the trend later in the day.   The London market continued to end the day with modest buoyancy and with 53.8% of the gains of the day intact, while the New York market ended the day with only very modest buoyancy and only 15.3% of the earlier gains of the day intact.   This late in the day reversal in the fortunes of the markets is unlikely to inspire much 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     1729 + 7                                                 MAY      132.90 + 0.55
JUL      1758 + 7                                                  JUL      136.10 + 0.45
SEP      1784 + 7                                                 SEP      139.15 + 0.45
NOV     1801 + 5                                                 DEC      143.10 + 0.40
JAN      1819 + 5                                                 MAR     146.80 + 0.30
MAR     1835 + 3                                                 MAY     148.80 + 0.25
MAY     1852 unch                                               JUL      149.70 + 0.15
JUL      1870 – 3                                                  SEP      150.35 + 0.20
SEP      1879 – 3                                                  DEC     151.10 + 0.20
NOV     1879                                                        MAR     153.30 + 0.15

31st. March, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net short sold position within this market by 54.68% in the week of trade leading up to Tuesday 24th. March;  to register a net short sold position of 8.399 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market increased their net long position within the market by 10.35%, to register a net long on the day of 24,799 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market increase their net short sold position within the market by 26.03%, to register a net short of position of 13,366 Lots.   This net short sold position which is the equivalent of 3,789,202 bags has most likely been further increased over the period of mixed buy overall softer trade that has since followed and likewise, that of the Managed Money fund sector of the market..

The latest Commitment of Traders report from the London robusta coffee has reported that the more speculative Managed Money sector of this market decreased their net long position within this market by 8.27% in the week of trade leading up to Tuesday 24th. March, to see this long position registered at 11,877 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 1,979,500 bags has most likely been further decreased, over the period of mixed but overall softer trade that has since followed.

There was nothing in the way of striking news coming to the markets from any sectors of the coffee markets, which in terms of the negative track that the funds are presently taking the markets, tended to support the bearish sentiment of the speculative sector of the market.   Thus with the chartists very much in control and triggering sell stops later in the day yesterday, there was a return to the lows of earlier in the month for both markets.   A dip that with the potential for the charts to influence further selling on the part of the funds, is most certainly a frightening factor for the majority of the producers.

The question is how far albeit that already in terms of cost of production and despite prices being defined in terms of a firmer U.S. dollar might the funds take the markets as unless there is soon another correction, the downside could be quite severe.   Especially so as with the Central and South American producer bloc that still accounts of approximately 60% of world production already distracted by the forthcoming Easter holiday season, one cannot expect much in the way of supportive action coming forth from the producers.   Not that one can really think of much that could be done by any of the producers on the short term, to counter the negative pressure of the funds that is not only related to coffee, but to commodities in general.

This issue of soft commodity prices is well illustrated by the Sugar market that dipped yesterday to new six year lows, which further increases the problems for many large multi crop farmers in South East Brazil who farm coffee, sugar and citrus.  Farmers who traditionally in terms of the insurance provided by multi cropping, used to look to their alternative crops to counter the negative nature of prices for one or the other of their crops.   This will contribute to continued strong price resistance within the internal market on the part of Brazils farmers ahead of their new crop, as it does already within most other producer countries and with the resulting rising asking export differentials having to be demanded by most coffee exporters in general, but for many farmers the period of resistance might be limited by their ability to finance farm stocks.

The arbitrage between the markets has narrowed yesterday to register this at 54.24 usc/Lb., while this equates to a now less attractive 40.98% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 751 bags yesterday; to register these stocks at 2,309,740 bags.   There was meanwhile a larger in volume 4,284 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,344 bags.

The commodity markets maintained their overall soft stance yesterday, but with some exceptions.  The Natural Gas, Copper, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy and the Cotton market was near to steady, while the Oil, Sugar, Cocoa, Gold, Silver and Platinum markets had a softer day’s trade and the Coffee markets were big losers on the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.27% lower; to see this Index registered at 420.32.   The day starts with the U.S. Dollar showing some buoyancy and trading at 1.478 to Sterling and 1.078 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 54.10 per barrel.

The London and New York markets opened the day yesterday taking a modestly softer track, within an environment of thin and lacklustre trade.    There was the occasional support coming forth though for the thinly traded New York market that experienced the occasional recovery to par in the early afternoon, but as the afternoon progressed and with a little more volume coming into play, both markets extended their losses.   This remained the track for the rest of the day within both markets and with the markets lacking underlying industry support, taking a steady downside track towards the close.     The London market ended the day on a soft note and with 93% of the losses of the day intact, while the New York market ended the day on a similarly soft note and with 91.4% of the earlier losses of the day intact.  This soft close does little to inspire and one might expect with a firm U.S. dollar in play and the negative nature of the macro commodity index, 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.
                                                
MAR     1697 – 66  
MAY     1722 – 66                                               MAY     132.35 – 5.85
JUL      1751 – 65                                                JUL     135.65 – 5.85
SEP      1777 – 66                                               SEP     138.70 – 5.75
NOV     1796 – 66                                                DEC    142.70 – 5.75
JAN      1814 – 66                                               MAR    146.50 – 5.70
MAR     1832 – 67                                               MAY    148.55 – 5.80
MAY     1852 – 67                                                JUL     149.55 – 5.90
JUL      1873 – 67                                                SEP     150.15 – 5.95
SEP      1882 – 67                                               DEC     150.90 – 6.00

30th. March, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market increase their net short sold position within the market by 26.03% during the week of trade leading up to Tuesday 24th. March;  to register a net short sold position of 13,366 Lots.   This net short sold position which is the equivalent of 3,789,202 bags has most likely been little changed over the period of mixed but overall steady trade, which has since followed.

The General Statistical Office in Vietnam has announced on Friday that with most of the months export registrations in hand, that they foresee exports of mostly robusta coffees during the month of March to be 52.6% lower than the same month last year, at a total of close to 2.17 million bags.    This they say would contribute to the countries cumulative coffee exports for the first six months of the present October 2014 to September 2015 coffee year to be 25.5% lower than the same period in the previous coffee year, at a total of close to 10.83 million bags.

This forecast in terms of the March exports is however significantly higher than the earlier forecasts on the part of the Vietnamese traders, who have been talking of March exports due to total between 1.5 million and 1.84 million bags.   But whichever figures are correct they provide clear evidence that the prevailing price resistance within the internal market in Vietnam on the part of the farmers and internal traders, is tending to retard export volumes out of the country.

The largest coffee cooperative in Brazil Cooxupé and by nature of Brazil’s dominance in world coffee production and supply the world’s largest coffee cooperative, has reported that due to aggressive selling of their large 2013 crop coffee stocks along with their more modest crop in 2014, that they registered a 31.5% increase in revenue during 2014.   This surge in income which was buoyed by the buoyancy seen within the reference prices of the New York arabica coffee market during 2014, the say has seen the cooperative register a profit of the equivalent of 43 million U.S. dollars for the year.   

The reference prices of the New York arabica coffee market have however since softened during the first quarter of this year, but the negative bite of this dip in the value of the international coffee prices has been countered by the sharp fall in the value of the Brazil real and furthermore, the cooperative has been delivering coffees that were forward contract sold during last year and ahead of this year’s dip in the international prices and with these sales in hand they forecast a further 16% rise in Brazil Real revenue for this year.  It is however perhaps a questionable forecast as it is early days and ahead of the harvest of their new and forecasted repeat modest 2015 crop, while much of the cooperatives stocks would have by now been liquidated and one might foresee the forecast to perhaps be somewhat ambitious.

The report does nevertheless tend to squash fears that the lower international coffee prices might have a negative effect upon longer term farm inputs and production, as their members look towards the investment at the end of the year towards the follow on 2016 crop.   Thus one might see the report to be somewhat bearish in nature, in terms of speculative sentiment with the volatile and presently lacklustre and soft New York arabica coffee market.    

The arbitrage between the markets has narrowed on Friday to register this at 57.10 usc/Lb., while this equates to a now less attractive 41.32% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 15,099 bags on Friday; to register these stocks at 2,310,491 bags.   There was meanwhile a smaller in volume 5,488 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,628 bags.

The commodity markets experienced a soft end to last week, with the Oil prices leading the way for a softer stance within the overall macro commodity index.   The Cotton and Wheat markets had a day of buoyancy and the Corn market was steady for the day, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Copper, Orange Juice, Soybeans, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.93% lower; to see this Index registered at 421.48.   The day starts with the U.S. Dollar showing some buoyancy and trading at 1.486 to Sterling and 1.087 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 54.51 per barrel.

The London market opened the day on Friday on a near to steady note, while the New York market started the day with modest buoyancy but with the New York market soon slipping back into modest negative territory, while the London market extended its early losses.    Both markets maintained their soft stance through the afternoon of slow and lacklustre thin trade, with the negative influences of the soft nature of the macro commodity index contributing to the lack of support within the more volatile New York market.   The London market continued to end the day on a soft note and with 90.3% of the earlier losses of the day intact, while the New York market ended the day on an equally soft note but with only 55.4% of the earlier losses of the day intact.   This close does little to inspire confidence, but perhaps with the evidence of the extended net short sold position of the speculative sector of the New York market and the fact that the New York market managed to partially bounce back from its lows, there may be a hesitantly cautious steady start for early trade today against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1763 – 28  
MAY     1788 – 28                                               MAY      138.20 – 2.05
JUL      1816 – 28                                                JUL      141.50 – 2.00
SEP      1843 – 28                                               SEP      144.45 – 2.05
NOV     1862 – 27                                                DEC     148.45 – 2.00
JAN      1880 – 26                                               MAR     152.20 – 1.95
MAR     1899 – 25                                               MAY     154.35 – 1.80
MAY     1919 – 20                                                JUL     155.45 – 1.70
JUL      1940 – 13                                                SEP     156.10 – 1.65
SEP      1949 + 2                                                 DEC     156.90 – 1.60

27th. March, 2015.
The National Coffee Organisation of Guatemala has reported that the country’s coffee exports for the month of February were 81,745 bags or 25.02% lower than the same month last year, at a total of 244,959 bags.   This poor performance follows many months of relatively low export volumes and the countries cumulative exports for the first five months of the present October 2014 to September 2015 coffee year are 197,460 bags or 23.39% lower than the same period in the previous coffee year, at a total of 646,693 bags.

It is difficult however to appropriate the relatively sharp dip in exports from Guatemala directly to the size of the just being completed new crop, as most forecasts have foreseen this crop to be similar to the last crop and one might rather appropriate the lower exports to the strong internal market price resistance that has this year inflated the asking export differentials for Guatemala coffees, relative to the competition of their neighbouring fine washed arabica coffee producers in Central America and Colombia.   While with a change to the VAT regulations within the country, there are prospects of lower volumes of neighbouring Honduras coffees crossing the border, to fly under the lower altitude grades but nevertheless relatively higher value Guatemala flag.

There is seemingly no let up to the regular spells of rainfall over the main Brazil coffee areas and with more rains forecast for the leading  arabica coffee districts for early next week, which shall see this leading producer having experienced good rainfall for the month of March.  But more important is the fact that these rains shall have assisted to build up the ground water retention levels within the coffee farms, ahead of the relatively dry May to August winter harvest season.    This moisture not only conducive to relieving the stress for the coffee trees that comes with the relatively aggressive strip harvesting methods applied by most farmers, but also in terms of the forthcoming frost season, to provide tree moisture that is assists the trees to counter the negative effects of any mild frost occurrences.

The big question however still remains with the Brazil new crop as while the cherry counts upon the trees might support some of the higher new crop forecasts, albeit that none of these dispute the fact that there shall be another deficit crop, there is no certainty over the bean yield per cherry.   The big question being the effects of the relatively dry conditions experienced during the traditionally wet month of January and carrying on into the first half of February for many areas within south east Brazil, which might influence relatively small beans and by nature, a lower weight yield from the cherries.   This factor perhaps the justification for some of the more modest new crop forecasts that have been coming from not only the traditionally conservative official bodies within the country, but also from some leading coffee trade houses and international futures brokers.

The clarity of this new Brazil crop factor shall really only be forthcoming by the third quarter of this year, as and when there are more specific and accurate hulling and grading outturn reports coming forth from the coffee mills.    In the meantime though and once the early new crop coffees start to come to the mills in Brazil, one might expect some low yield scare stories to start coming to the market, even though some of these might be market manipulative in nature.

The arbitrage between the markets has broadened yesterday to register this at 57.88 usc/Lb., while this equates to a now less attractive 41.27% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,799 bags yesterday; to register these stocks at 2,325,590 bags.   There was meanwhile a larger in volume 11,093 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,140 bags.

The commodity markets were mixed yesterday but with most markets lacklustre and generally softer in nature, but with the macro commodity index nevertheless being buoyed but the strong Oil markets, which were reacting to the fears over the entry of Saudi Arabia and some of the Gulf states into the conflict situation in Yemen.  The Oil, markets had a strong day and the New York arabica Coffee, Copper, Gold, Silver and Platinum markets had a day of modest buoyancy and the London robusta Coffee market was steady, while the Natural Gas, Sugar, Cocoa, Cotton, Orange Juice, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.11% higher; to see this Index registered at 425.42.   The day starts with the U.S. Dollar steady and trading at 1.485 to Sterling and 1.088 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 56.60 per barrel.

The London market opened the day yesterday on a steady note and the New York market with some degree of buoyancy to enter the afternoon on a positive track, but to come under pressure amid thin and lacklustre trade as the afternoon progressed and with both markets briefly moving back into negative territory.   There was however a recovery and with the New York market posting modest gains, while the London market returned to just above par but struggling to build upon its recovery and with trade within both markets remaining thin and lacklustre in nature.    The London market continued to end the day on a hesitantly steady note, while the New York market shed most of its gains to end the day on a modestly buoyant note and with only 10.5% of the earlier gains of the day intact.    This close does little to inspire but shall perhaps be sufficient to inspire a slow and steady start for the markets for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1791 unch
MAY     1816 unch                                              MAY      140.25 + 0.30
JUL      1844 unch                                               JUL      143.50 + 0.30
SEP      1871 + 1                                                 SEP       146.50 + 0.30
NOV     1889 + 1                                                  DEC      150.45 + 0.25
JAN      1906 + 1                                                 MAR      154.15 + 0.25
MAR     1924 unch                                              MAY      156.15 + 0.35
MAY     1939 unch                                               JUL      157.15 + 0.45
JUL      1953 unch                                               SEP      157.75 + 0.45
SEP      1947 + 9                                                  DEC      158.50 + 0.45

26th. March, 2015.
The well respected commodity futures brokers forecasted yesterday that the new Brazil coffee crop shall be close to 44 million to 45.5 million bags and picking up some degree of respect, as the higher figure is somewhat in line with the Neumann Kaffee Gruppe Statistical Unit figure of 45.3 million bags that came to the markets last week.  This latest F C Stone forecast that has indicated a new arabica coffee crop of between 32.5 million and 33.5 million bags and a much reduced new conilon robusta crop of between 11.5 million and 12 million bags, with their latest negative adjustment to conilon robusta crop being related to the overly dry weather during January and half of February, within the state of Espirito Santo

One might suggest that this latest F C Stone forecast while already coming forth from a well-respected institution, gains further respect from the reports not so conservative reference and acknowledgement of the previous year’s crop having been between 48 million to 49 million bags.   This figure is well above official figures out of Brazil and is very much in line with many if not most, of the very well respected private trade and industry assessments of the last 2014 crop.

The implication of this latest forecast and one that follows on from the similar in number forecast from a usually reliable source is that one might now be looking at Brazil coming in with a significant deficit production this year.   In this respect and with there no doubt that this year shall most certainly see a smaller conilon robusta crop and one that has a dedicated domestic demand, one might expect to see Brazil’s overall coffee export demand dip back towards 31 million bags per annum.   However even with the possibility of this dip in exports that shall be added to the approximate 21 million bags of domestic market demand, these latest reports now indicate a deficit supply which would most probably exceed 7 million bags and therefore, one that would nearly eliminate Brazil coffee stocks by the start of the follow on 2016 Brazil crop.

The scheduled auction yesterday of 40,809 bags of aged Brazil Government coffee stocks proved to be a failure, as there were no bidders prepared to pay up over the approximate 101 usc/Lb. to 118 usc/Lb. minimum price levels that were set for individual lots within this overall offering.   The comments being that while these minimum price levels were relatively expensive, they were not so in terms of the quality of these over ten year old coffees.   There is nevertheless another auction that is scheduled for Wednesday next week, which shall offer approximately 40,800 bags of these aged coffees and with the minimum prices for these lots to be announced on Monday.

With the prevailing price resistance within the internal market in Vietnam which has resulted in exporters having to demand high positive differentials for new robusta coffee business, the Ministry of Agriculture and Rural Development have with the evidence of exports so far this month; estimate that this shall be another month of relatively modest exports.   The effects of this to see the countries coffee exports of mostly robusta coffees for this first quarter of 2015, to be over 40% lower than the same period last year.   Thus further illustrating or confirming that with the new crop having been only marginally lower than the previous crop, the significantly high levels of new crop stocks that are still being held by farmers and internal traders in Vietnam.

Contrary to the comments on the part of the Indonesian Coffee Exporters and Industries Association on Monday that they foresee coffee production from Indonesia for this year shall be marginally lower than last year; there are many local and international trade and industry players who are actively involved within the country who seemingly do not agree.   In fact the perspective is that due to generally favourable weather conditions that the new robusta crop this year that shall start to build up in volumes by May, shall be in excess of 15% larger than the previous crop and one would expect that by the third quarter of the year that there shall be more aggressive robusta coffee selling activity out of Indonesia.  Albeit that presently there is no surety of this, while the price resistance within the tight internal market continues to inflate asking export differentials for Indonesian robusta coffees.

The arbitrage between the markets has broadened yesterday to register this at 57.58 usc/Lb., while this equates to a now less attractive 41.14% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 14,750 bags yesterday; to register these stocks at 2,318,791 bags.   There was meanwhile a smaller in volume 13,925 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,233 bags.

The commodity markets were mixed yesterday but with most remaining within a narrow trading range, while with the overall macro commodity index was assisted by the weighted oil markets that took a positive track to show some buoyancy for the day.  The Oil, Sugar, Cocoa, New York arabica Coffee, Orange Juice, Corn, Gold, Silver and Platinum markets had a day of buoyancy and the London robusta Coffee market was steady, while the Natural Gas, Cotton, Copper, Wheat and Soybean markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.23% higher; to see this Index registered at 424.97.   The day starts with the U.S. Dollar near to steady and trading at 1.488 to Sterling and 1.098 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 56.85 per barrel.

The London market started the day yesterday on a softer note, while the New York market had a steady start, but with the New York market soon joining the London market in negative territory and into the early afternoon trade.  The New York market did however seemingly react to the latest International F C Stone Brazil new crop forecast and moved back into positive territory, while the London market moved back to close to par and finally with the New York market retaining its new found buoyancy to join New York in positive territory.   The London market did not however manage to hold on to its gains that peaked at $ 15.00 per Mt and faltered near the end of the day to end on a near to steady note, while the New York market maintained a positive stance through to the end but only retaining 52.5% of the earlier gains of the day by the close.  This was however something of a positive day and one might think that with a marginally softer U.S. dollar in play and trade thin that the markets shall encounter a steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1791 – 2
MAY     1816 – 2                                                 MAY      139.95 + 2.65
JUL      1844 – 1                                                  JUL      143.20 + 2.65
SEP      1870 – 1                                                 SEP      146.20 + 2.65
NOV     1888 – 2                                                 DEC      150.20 + 2.70
JAN      1905 – 2                                                 MAR     153.90 + 2.75
MAR     1924 unc                                                MAY     155.80 + 2.80
MAY     1939 unch                                               JUL     156.70 + 2.65
JUL      1953 unch                                              SEP      157.30 + 2.60
SEP      1938 + 4                                                 DEC      158.05 + 2.50

25th. March, 2015.
The export selling activity for mostly robusta coffees out of Vietnam is slow and lacklustre for the present, with farmers and internal traders still holding large volumes of new crop coffee stocks and showing strong price resistance towards the negative dictates of the reference prices of the London robusta coffee market.  This is however not completely stalling exporters selling activities as the very same soft London market prices allow for consumer roaster buyers to justify paying up high purchase differentials for need to have short term coffees, but it is most certainly dampening spirits in terms of longer term forward buying activity.

It is however proving to be difficult times for any short sold exporters, as they are obliged to pay up loss making prices for coffee stocks to cover such commitments and thus in the bid to recover losses, are obliging them to inflate differentials for new business.   Thus with only modest volumes of such business forthcoming and likewise from Indonesia where internal market price resistance is also very much in evidence, there is only lacklustre price fixation hedge selling coming in over the London market for the present and this is assisting this market to be relatively less negative in nature in comparison to the soft New York market.

Meanwhile the Brazil real has recovered some of its recent losses albeit still near to its recent over ten year lows and with farmers having already sold large volumes of their once significant arabica coffee stocks and the relatively soft nature of the reference prices of the New York arabica coffee market dampening selling spirits, there remains a good degree of price resistance within the internal market in Brazil.   Thus ahead of the new crop the new business export trade out of Brazil is lacklustre for the present, but with exporters still actively working on the exports of good volumes of their forward sales commitments.

There is likewise a degree of price resistance being shown within Colombia and Central America for the present, but with the latter Central Americans just completing their new crop harvest and with good volumes of new crop stocks in hand, perhaps not having the overall financial muscle to hold out for too long.  Thus these coffees along with the pending new Mitaca crop from Colombia and the new Peru crop on the horizon and the resulting price fixation hedge selling that they bring, do provide some degree of threat to the short to medium term fortunes of the related New York market.

With good rains of late the new Brazil coffee crop is steadily progressing towards harvest and with the northern conilon robusta districts soon to start bringing in new crop coffees, while the central and southern arabica coffee districts have their harvest starting in a couple of months’ time.    In the meantime all that can be said in terms of forecasts for this potentially relatively modest crop has been reported and with the prevailing and unthreatening normal weather conditions in play, there is nothing more in terms of market supportive fundamental news coming to the markets from Brazil.

This is likewise the case from all the other main producer blocs and the volatile fund playground of the New York arabica coffee market is devoid of supportive fundamental news for the present, to see this market maintaining its soft stance for the present.   One might however suggest that there is need to be cautious in terms of this market on the longer term, as there are many weather related hurdles to the fore and recent experience has shown that world weather conditions are erratic and with the soft nature of coffee prices despite the stronger nature of the U.S. dollar limiting the affordability of farm inputs for many producers, there is in many instances a longer term threat to coffee production.   Thus one might be safe to bet that on the longer term there shall be some degree of fundamental support coming to the markets, but where the funds might wish to take the markets down to prior to such events, is becoming frightening to the producers.

The arbitrage between the markets has narrowed yesterday to register this at 54.84 usc/Lb., while this equates to a now less attractive 39.94% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,905 bags yesterday; to register these stocks at 2,304,041 bags.   There was meanwhile a larger in volume 11,006 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,158 bags.

The commodity markets were mixed yesterday but with most remaining within a narrow trading range, as was the case of the seemingly steady U.S. dollar which had little influence within the markets.   The U.S. Oil, Natural Gas, Cocoa, Copper, Orange Juice, Corn, Gold, Silver and Platinum markets showed buoyancy, while the Brent Oil, Sugar, Coffee, Cotton, Wheat and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.06% lower; to see this Index registered at 423.99.   The day starts with the U.S. Dollar steady and trading at 1.486 to Sterling and 1.092 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 53.35 per barrel.

The London and New York markets started the day yesterday with some buoyancy and maintained this stance into the early afternoon’s trade, but with the New York market starting to falter and dip back into negative territory as the afternoon progressed.   The change in confidence within the New York market and with sell stops being triggered saw the market start to extend its losses and finally had its influence within the London market that followed suit in a less aggressive manner into negative territory.   The London market continued to end the day on a soft note and with 90.9% of the losses of the day intact, while the New York market ended the day on a very soft note and with 79.8% of the earlier losses of the day intact.   This overall soft close and with nothing in the way of supportive fundamental news in play does little to inspire confidence and one might expect to see a steady to softer start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1793 – 20
MAY     1818 – 20                                                MAY      137.30 – 4.55
JUL      1845 – 19                                                 JUL      140.55 – 4.60
SEP      1871 – 19                                                SEP      143.55 – 4.60
NOV     1890 – 20                                                 DEC     147.50 – 4.65
JAN      1907 – 21                                                MAR     151.15 – 4.70
MAR     1924 – 24                                                MAY     153.00 – 4.65
MAY     1939 – 23                                                 JUL     154.05 – 4.55
JUL      1953 – 23                                                 SEP     154.70 – 4.55
SEP      1934 – 23                                                 DEC    155.55 – 4.70

24th. March, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net short sold position within this market by 26.93% in the week of trade leading up to Tuesday 17th. March;  to register a net short sold position of 5,430 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 2.3%, to register a net long on the day of 22,473 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market increase their net short sold position within the market by 13.84%, to register a net short of position of 10,605 Lots.   This net short sold position which is the equivalent of 3,006,471 bags has most likely been somewhat reduced over the period of mixed but overall more positive trade which has since followed and likewise, that of the managed money fund sector of the market.

The latest Commitment of Traders report from the London robusta coffee has reported that the more speculative Managed Money sector of this market decreased their net long position within this market by 27.51% in the week of trade leading up to Tuesday 17th. March, to see this long position registered at 12,948 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,158,000 bags has most likely been little changed, over the period of mixed and overall steady trade that has since followed.

The National Coffee Council in El Salvador have forecasted with most of the new crop harvested that the new crop shall 688,500 bags, which is a figure that is well below some of the earlier private trade and industry forecasts of in excess of 800,000 bags.   However this relatively modest forecast until such time as all the new crop coffees actually come to the market has to be seen as something of a conservative estimate and one might think that in time, the evidence of exports shall support a higher new crop figure.

The Indonesian Coffee Exporters and Industries Association have forecast that the 2015 coffee crop shall be from 1.62% to 8.65% lower than the production in 2015, with estimates for this year’s production to be between 10,833,333 bags and 11,666,667 bags.   The report supports this conservative estimate with comments on the damaging effects of spells of modest rains, which have been experienced within many leading coffee districts.  But one might well suggest that the prevailing negative nature of the reference prices of the international coffee markets might have some influence in the timing and the negative nature of this report, which might be designed to buoy speculative spirits within the market.  

There is nevertheless no doubt that whichever of the forecasts that one would wish to believe in terms of the pending new Brazil crop, that it is due to be another relatively small deficit crop and aside from the possible market manipulative nature of reports coming forth from other producers, that coffee supply must tighten as the year progresses.   Thus while market direction as is dictated by the financial muscle of the funds is not always related to longer term market fundamentals, one might expect that in time there has to be support forthcoming from the forces of supply and demand.   Such a recovery in the markets is however presently being retarded by the evidence of more than adequate world coffee stocks and a degree of complacency on the part of the main consumer market industries, along with the negative nature of the macro commodity index.    

The arbitrage between the markets has narrowed yesterday to register this at 58.48 usc/Lb., while this equates to a now less attractive 41.23% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 13,414 bags yesterday; to register these stocks at 2,297,136 bags.   There was meanwhile a larger in volume 16,304 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,164 bags.

The commodity markets were seemingly buoyed yesterday by the marginally softer nature of the U.S. dollar, which saw the overall macro commodity index take a positive track.   The Oil, Sugar, London robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Natural Gas, Cocoa and New York arabica Coffee markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.99% higher; to see this Index registered at 424.24.   The day starts with the U.S. Dollar steady against its softer value on Friday and trading at 1.493 to Sterling and 1.092 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 53.75 per barrel.

The London market started the day yesterday with a degree of buoyancy, while the New York market started the day tending softer.   The afternoon however brought with it some negative pressure for both markets, to see the New York market lose a little more weight and the more resistant London market finally follow the trend in New York, to move back into negative territory.   This was short lived however as while the New York market continued to wallow within the doldrums of thinly traded negative territory, the London market recovered and regained its positive stance.   This remained the track for the rest of the day that was one of thin and lacklustre trade, with the London market gaining some support from producer price resistance and the resulting lack of price fixation hedge selling.   The London market continued to end the day on a positive note and with 72% of the gains of the day intact, while the New York market ended the day on a soft note and with 38% of the losses of the day intact.   This mixed close one would think shall inspire a degree of caution and result in a follow through thinly traded steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1813 + 17
MAY     1838 + 18                                                MAY      141.85 – 1.50
JUL      1864 + 18                                                 JUL      145.15 – 1.50
SEP      1890 + 17                                                SEP      148.15 – 1.50
NOV     1910 + 18                                                 DEC     152.15 – 1.50
JAN      1928 + 19                                                MAR     155.85 – 1.50
MAR     1948 + 18                                                MAY     157.65 – 1.30
MAY     1962 + 18                                                 JUL     158.60 – 1.30
JUL      1976 + 18                                                 SEP     159.25 – 1.35
SEP      1957 + 22                                                 DEC    160.25 – 1.35

23rd. March, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market increase their net short sold position within the market by 13.84% during the week of trade leading up to Tuesday 17th. March;  to register a net short sold position of 10,605 Lots.   This net short sold position which is the equivalent of 3,006,471 bags has most likely been somewhat reduced over the period of mixed but overall more positive trade, which has since followed.

The Uganda Coffee Development Authority have reported that the countries coffee exports for the month of February were 64,974 bags or 18.28% lower than the same month last year, at a total of 290,475 bags.   This relatively modest figure contributes to the countries cumulative exports for the first five months of the present October 2014 to September 2015 coffee year to be 202,719 bags or 13.71% lower than the same period in the previous coffee year, at a total of 1,275,493 bags.

Nevertheless despite this dip in exports from Uganda that are as much weather related as they are to some degree of price resistance, the over value of the coffee exports are still supportive and inspirational for the Ugandan coffee farmers and especially so, as the value is converted back into domestic currency from a significantly firmer U.S. dollar that is now in play.   In this respect the value of the February coffee exports was US$ 1,391,944.00 or 3.92% higher than the same month last year, while the value of the coffee exports for the first five months of the present coffee year is US$ 17,559,045.00 or 11.79% higher than the same period in the previous coffee year, at a total of US$ 166,544,027.00.

The dry weather in central and western Uganda is predicted to break in the coming week, but in the meantime the negative effects of the delayed start to the rain season has already had its effect and forecasts are that the follow on March coffee exports from Uganda are due to be over 25% lower than the same month last year, at approximately 260,000 bags.  This contributing to the already forecasted 8.6% dip in exports for the present coffee year, which is now expected to see exports of 3.2 million bags.

Meanwhile within the world’s leading robusta coffee producer and exporter the State Weather forecasters have reported that the countries spring and summer rain season that usually starts at the very end of April or early May might well be a little late this year, with the forecaster now talking in terms of mid-May or perhaps even as late as early June.   The prospects of a late start to the rain season and the possibility that it might have a negative effect upon the size of the next year end coffee crop that many forecast shall be close to 30 million bags, shall continue to inspire internal market price resistance towards the prevailing softer nature of the reference prices of the international coffee markets.  However the weather forecasts are by nature of being longer term and therefore not precisely accurate are uncertain and one would think that if the rains do actually prove to come into play by early May, that it might contribute to more aggressive internal market selling activity.

The arbitrage between the markets has narrowed on Friday to register this at 60.80 usc/Lb., while this equates to a now less attractive 42.41% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so as the price resistance within the majority of arabica producer countries, continues to buoy asking export differentials for new business.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,393 bags on Friday, to register these stocks at 2,283,722 bags.   There was meanwhile a larger in volume 6,360 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 77,468 bags.

The commodity markets were buoyed on Friday by a modest weakening of the U.S. dollar, which inspired more confident investment into the markets.  This likewise contributed to a good recovery for the overall macro commodity index, which has of late been rather lacklustre in nature.  The Oil, Sugar, Cocoa, London robusta Coffee, Copper, Orange Juice, Wheat, Corn, Soybeans, Gold, Silver and Platinum markets had a day of buoyancy, while the Natural Gas, New York arabica Coffee and Cotton markets tended softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.82% higher; to see this Index registered at 420.08.   The day starts with the U.S. Dollar steady against its softer value on Friday and trading at 1.493 to Sterling and 1.082 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 53.20 per barrel.

The London market started the day on Friday with a degree of buoyancy, but with the New York market starting the day taking a softer track.   The softer nature of the New York market and within an environment of thin and lacklustre trade saw the London market come under pressure and both markets taking a negative track as the afternoon progressed.  There was however some degree of support coming with the positive influences of the overall macro commodity index, which assisted both markets to bounce back off the lows and to take the London market back into modest positive territory and the New York market to limit its losses for the day.  The London market ended the day on a positive note and with 45.5% of the gains of the day intact, while the New York market ended the day on a softer note, but having recovered 78.1% of the earlier losses of the day, by the close.  This rather dull close and with volumes of trade for the day having been thin and lacklustre in nature is unlikely to inspire much in the way of direction and one might expect to see only a hesitant and cautious steady to softer start for early trade today against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1796 + 5
MAY     1820 + 5                                                 MAY     143.35 – 0.80
JUL      1846 + 4                                                  JUL      146.65 – 0.70
SEP      1873 + 4                                                 SEP      149.65 – 0.70
NOV     1892 + 5                                                  DEC     153.65 – 0.70
JAN      1909 + 3                                                 MAR     157.35 – 0.35
MAR     1930 + 3                                                 MAY     158.95 – 0.15
MAY     1944 + 3                                                  JUL     159.90 unch
JUL      1958 + 3                                                  SEP     160.60 + 0.10
SEP      1935 + 3                                                  DEC    161.60 + 0.15

20th. March, 2015.
The National Export Centre in Nicaragua have reported that the countries coffee exports for the month of February were 37,239 bags or 25.17% higher than the same month last year, at a total of 185,183 bags.   This export performance has contributed to the countries cumulative exports for the first five months of the present October 2014 to September 2015 coffee year to be 116,662 bags or 34.61% higher than the same period in the previous coffee year, at a total of 453,717 bags.

The Brazil government who are holding aged retention coffee stocks that are estimated to be approximately 1.61 million bags have announced that they intend to start auctioning off these stocks, to take advantage of the present price resistant tightening internal market supply.   In this respect they plan to auction 40,809 bags on Wednesday next week, which will most probably be targeted at the price sensitive players within the countries domestic roasting industry.

The coffee deliveries into the main export ports in Colombia are proving to be a problem at present, as the protests by truckers over the cost of diesel heads has now been going on for twenty four days and many estimate to include approximately 40% of the commercial truckers in the country.   While the impact of this and due to the capacity of the trucks involved, many estimate that it has reduced by as much as 60% of the commercial transport capacity is being effected.

The problem is being further exasperated by the fact that there are instances of blockades of the entrances to the ports, which are further stalling the movement of both export and import cargoes, which includes the contracted coffee exports.   These protests are resulting in delayed shipments and in terms of coffee with Colombia have been a relatively aggressive high volume forward contract export seller over the past few months, is becoming a problem for the consumer markets that had once again become supportive of high percentages of fine washed arabica Colombian coffees in their blends.

The National Union of Coffee Agribusinesses and Farm Enterprises has reported that due to a prolonged dry spell over the last three months within the South and South Western districts in Uganda, that they foresee a negative impact upon production for this year.   This dry weather they say has not only impacted upon short term production potential within these districts, but has also resulted in the death of a high percentage of new seedlings that had been planted out.   The outcome of these problems is a lowering of the coffee export potential for the present October 2014 to September 2015, which is now being forecasted 8.6% lower than the earlier forecasts and to total only 3.2 million bags.

This is an unfortunate hiccup in the Ugandan resuscitation program for its coffee industry, which has been supported by the combination of the Uganda Coffee Development Authority and a host of private trade and industry programs, which both supply millions of seedlings and sophisticated farm extension services.  These programs targeting a steady growth of the Uganda coffee industry and with the hope to see coffee exports increase over the next five years to in excess of 5 million bags per annum and with some, ambitiously talking of figures closer to 6 million bags.  

The arbitrage between the markets has broadened yesterday to register this at 61.82 usc/Lb., while this equates to a now less attractive 42.89% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,790 bags yesterday, to register these stocks at 2,280,329 bags.   There was meanwhile a similar in volume 2,530 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 83,828 bags.

The Certified Robusta coffee stocks held against the London market were seen to increase by 103,500 bags or 3.94% over the two weeks of trade leading up to Monday 16th. March, to see these stocks registered at 2,727,500 bags.  

The commodity markets were mixed yesterday, but with the overall macro commodity index tending to soften during the day.   The New York arabica Coffee, Cotton, Copper, Wheat, Gold and Silver markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, London robusta Coffee, Orange Juice, Corn, Soybean and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.18% lower; to see this Index registered at 412.56.   The day starts with the U.S. Dollar near to steady and trading at 1.476 to Sterling and 1.068 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 53.10 per barrel.

The London market started the day yesterday near on a steady note and with the New York market starting with almost immediate follow through from the previous day’s buoyancy, to have its influence upon the London market that soon joined New York in positive territory.   This positive track was maintained into the afternoon’s trade, but while the New York market resisted selling pressure as the afternoon progressed, the London market finally succumbed and slipped back into modest negative territory.   The London market continued to end the day on a softer note and with 36.4% of the losses of the day intact, while the New York market ended the day on a firm note and with 61.2% of the earlier gains of the day intact.   This mixed close but with some degree of confidence being seen within the recovering New York market might be conducive for a steady start for early trade today against the prices set yesterday, as follows:  

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1791 – 4                                                 MAR     140.00 + 3.75
MAY     1815 – 4                                                 MAY     144.15 + 4.10
JUL      1842 – 7                                                  JUL      147.35 + 4.00
SEP      1869 – 7                                                 SEP      150.35 + 4.05
NOV     1887 – 9                                                  DEC     154.35 + 4.05
JAN      1906 – 7                                                 MAR     157.70 + 3.75
MAR     1927 – 6                                                 MAY     159.10 + 3.50
MAY     1941 – 8                                                  JUL     159.90 + 3.45
JUL      1955 – 8                                                  SEP     160.50 + 3.40
SEP      1932 – 8                                                  DEC    161.45 + 3.30

19th. March, 2015.
The largest coffee cooperative in Brazil Cooxupe has forecasted that with their estimates on the prospects of the maturing cherries towards the new crop, that they do not foresee any chance for this year’s new crop to exceed the volumes of last year’s modest crop.   In this respect they cite the late start to the rain season last year, the three weeks dry spell in January as contributing factors to the prospects for a modest crop from their members and the neighbouring producers in south east Brazil.   While they further confirm their belief in the reality of the forecasts on the part of Brazil’s Agricultural Ministry who have forecasted this year’s crop at between 44 million and 46.6 million bags and perhaps even some merit in the National Coffee Federation forecast for a new crop of between 40.3 million and 43.3 million bags.

The cooperative has however contrary to many other official forecasts that indicated that damaged trees would impact negatively upon the prospects for the follow on 2016 crop, reported that good regular February and early March rains have been very beneficial for the recovery of the coffee trees and that these optimal conditions are conducive for the development of the trees towards a good 2016 coffee crop.   This next year’s crop that still has to live through the hurdles of the forthcoming June and July frost threatening season and the normal start for the new spring and summer rain season late in September and it is thus still early days, to be completely confident in the prospects for the next year’s crop.

However while most players no longer foresee any threat from frost for the dry winter season, the forecasts for the El Nino phenomenon to come into play are becoming more certain and with this phenomenon usually bringing increased summer rains to south east Brazil, the second hurdle is seemingly not so threatening.   Thus for the present and with world coffee stocks more than sufficient to cover short to medium terms world coffee demand and including demand for Brazil coffees, the markets have little reason to react to concerns over longer term coffee supply.

The Cameroun has reported that the countries robusta coffee exports for the month of February were 14,650 bags or 111.26% higher than the same month last year, at a total of 27,817 bags.  However the country that reported robusta coffee exports for January at 20,133 bags has reported no arabica coffee exports during the month of February and so far for the first five months of the present October 2014 to September 2015 coffee year, Cameroun have only exported 4,150 bags of arabica coffee.   Thus for the present with the unofficial exports into neighbouring Nigeria aside, the Cameroun are still reporting relatively modest overall coffee exports.

Officials in Indonesia’s high profile in terms of arabica coffee production districts in West Sumatra have estimated that the region has seventeen thousand hectares of arabica coffee farms and with average yields of a relatively modest 882 Kgs. per hectare, shall produce approximately 250,000 bags this year.   There has however in recent years been increasing support from the speciality coffee industries within the main consumer markets for these West Sumatra arabica coffees and with inspiration of the resulting relatively high prices and many extension service support programs coming into play, one might expect to see a steady increase in West Sumatra arabica coffee production in the coming years.

The arbitrage between the markets has broadened yesterday to register this at 57.54 usc/Lb., while this equates to a now less attractive 41.09% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,622 bags yesterday, to register these stocks at 2,277,539 bags.   There was meanwhile a larger in volume 5,238 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 86,358 bags.

The commodity markets were buoyed later in the day yesterday, with the softening nature of the U.S. dollar that assisted to support the overall macro commodity index.   The dollar now coming under some modest negative pressure from the news that the U.S. Federal reserve is unlikely to raise interest rates until at least June and with follow on interest rate hikes to be both slow and shallow, which remains modestly positive for commodities in general.  The Oil, Natural Gas, Coffee, Cotton, Orange Juice, Wheat, Corn, Soybeans, Gold, Silver and Platinum markets had a day of buoyancy, while the Sugar, Cocoa and Copper markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.88% higher; to see this Index registered at 413.29.   The day starts with the U.S. Dollar near to steady and trading at 1.490 to Sterling and 1.078 to the Euro, while North Sea Oil is tending a little softer in early trade and is selling at $ 53.55 per barrel.

The London market started the day yesterday near to steady, while the New York market took a softer stance from the start of trade.   The London market maintained its hesitant buoyancy into the afternoon’s trade, while the New York market shed some more weight and finally had some influence, to see the London market dip back into modest negative territory.   This negative dip was however short lived and with some support from the positive nature of the macro commodity index coming into play both market recovered and headed back into positive territory, but with selling pressure over the markets flattening them out to limit follow through gains.   The London market continued to end the day on a positive note and with 80.4% of the earlier gains of the day intact, while the New York market likewise ended the day on a positive note and with 56.7% of the earlier gains of the day intact.   This positive close is supportive for sentiment and one might expect to see a steady to perhaps buoyant start for early trade today against the prices set yesterday, as follows:  

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1795 + 41                                               MAR     136.25 + 2.30
MAY     1819 + 41                                               MAY     140.05 + 1.90
JUL      1849 + 43                                                JUL      143.35 + 1.95
SEP      1876 + 43                                               SEP      146.30 + 1.95
NOV     1896 + 44                                                DEC     150.30 + 2.00
JAN      1913 + 42                                               MAR     153.95 + 2.10
MAR     1933 + 41                                               MAY     155.60 + 2.00
MAY     1949 + 41                                                JUL     156.45 + 1.95
JUL      1963 + 41                                                SEP     157.10 + 2.00
SEP      1940 + 41                                                DEC    158.15 + 2.05

18th. March, 2015.
The concern within Vietnam over aging coffee trees and the impact that this might have upon longer term yields is being addressed by both the countries government and private industry and while the government is coming forth with special loan programs to support the replacement of aged trees with new seedlings, there is also a program being financed by Nestle to supply seedlings to the Vietnamese farmers.   These programs tend to counter the comments that have been coming forth in recent weeks, over the longer term threat to Vietnam’s production levels that might come from the declining yields of aged trees that has been illustrated by the estimate that 45% of the coffee trees are over fifteen years old.

Meanwhile in terms of Asian coffee production there are a number of Vietnam influenced investments into coffee farming projects in the neighbouring countries and with coffee farms being established in Laos, Myanmar and Cambodia, as there are both state and private trade and industry programs to rejuvenate the coffee farming industry in the Philippines.   Likewise there are many programs in play within Indonesia to inspire coffee farmers to try to follow the example of Vietnam and to increase what are presently overall relatively low yields, which on the longer term one would think shall contribute to Asia steadily increasing its present approximate 32% share of world coffee production.

The markets remain devoid of any supportive striking news for the present, albeit that there remains no doubt that with another relatively modest deficit crop on the cards for Brazil this year, the longer term perspective if or tightening coffee supply for the coming year.   This lack of news and in terms of the worry for producers over the presently soft reference prices of the international coffee markets, tending to confirm that there is in fact really nothing in the way of concerning news to be forwarded from any of the main producer blocs.   A factor that maintains complacency on the part of the consumer roasting industries, which is presently resulting along with the price resistance being shown within the internal markets of most producers, in a lacklustre physical coffee market.

The arbitrage between the markets has narrowed yesterday to register this at 57.50 usc/Lb., while this equates to a now less attractive 41.62% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,588 bags yesterday, to register these stocks at 2,272,917 bags.   There was meanwhile a larger in volume 10,462 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 91,596 bags.

The commodity markets had an overall soft and lacklustre day yesterday, with the macro commodity index tending softer for the day.  The Natural Gas and Coffee markets had a day of buoyancy, while the Oil, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.58% lower; to see this Index registered at 409.67.   The day starts with the strong U.S. Dollar steady and trading at 1.475 to Sterling and 1.059 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 52.30 per barrel.

The London market and New York markets both started the day yesterday with follow through buoyancy in thin trade and maintained some muscle through to the afternoon’s trade, but with the New York market starting to come under pressure and moving back into negative territory, while the London market moved back towards par.   There was however despite the negative influences of the soft macro commodity index a later in the day recovery for the both markets, which took the both markets back into positive territory.   The London market continued to hold on to its positive track and end the day with 48.4% of the earlier gains of the day intact, while the New York stuttered in near the end to finish the day on only a steady note and with only 6.9% of the earlier in the day’s gains intact.   The lack of sustainability of the follow through rally for the volatile New York market might however be reason for some caution and one might think that the markets might be due for 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.
                                                
MAR     1754 + 15                                               MAR     133.95 – 0.95
MAY     1778 + 15                                               MAY     138.15 + 0.10
JUL      1806 + 16                                                JUL      141.40 + 0.05
SEP      1833 + 17                                               SEP      144.35 + 0.05
NOV     1852 + 16                                                DEC     148.30 + 0.15
JAN      1871 + 18                                               MAR     151.85 + 0.10
MAR     1892 + 19                                               MAY     153.60 + 0.10
MAY     1908 + 22                                                JUL     154.50 + 0.10
JUL      1922 + 22                                                SEP     155.10 + 0.20
SEP      1899 + 22                                                DEC    156.10 + 0.35

17th. March, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net short sold position within this market by 171.45% in the week of trade leading up to Tuesday 10th. March;  to register a net short sold position of 4,278 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market increased their net long position within the market by 0.76%, to register a net long on the day of 23,003 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market increase their net short sold position within the market by 44.80%, to register a net short of position of 9,716 Lots.  This net short sold position which is the equivalent of 2,754,443 bags is most likely now little changed, following the mixed trade and finally the correction that came into play for the market yesterday.

The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market decreased their net long position within this market by 14.77% in the week of trade leading up to Tuesday 10th. March, to see this long position registered at 17,862 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,977,000 bags has most likely been further reduced, over the period overall negative trade that has since followed.

The Vietnam Customs have reported that the country’s coffee exports of mostly robusta coffees for the month of February were 30.3% lower than the same month last year, at a total of 1,537,383 bags.     This volume which falls very much within the trade and industry expectations means that exports for the first five months of the present October 2014 to September 2015 coffee year are 14% lower than the same period in the previous coffee year, at a total of 8,663,333 bags.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 156,448 bags or 2.95% during the month of February, to register these stocks at 5,151,552 bags at the end of the month.   These stocks do not of course include the in transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is fed by these stocks of 490,000 bags per week, would conservatively have been at least 1 million bags.

Therefore if one is to consider the additional unreported stocks and look to end August stocks in North America of at the very least 6,151,552 bags, it would have equated to at least a very safe 12.5 weeks of roasting activity and still a safe reserve, ahead of the pending delivery of increasing volumes of new crop coffees from Mexico, Central America, Colombia and Vietnam.  These new crop coffees and however not expected to surge in supply, as the North American roasters alike the consumer industries worldwide, remain slow and steady buyers against what is considered to be unrealistic premium differentials for new business, which are coming from the widely price resistant producers.

The arbitrage between the markets has broadened yesterday to register this at 58.08 usc/Lb., while this equates to a now less attractive 42.07% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,169 bags yesterday, to register these stocks at 2,268,329 bags.   There was meanwhile a larger in volume 70,344 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 102,058 bags.

The commodity markets with the exception of the Oil sector of the markets had a generally steady to positive day yesterday, but with most markets remaining somewhat hesitant in sentiment and failing to attract good speculative support.  The Sugar, Copper, Orange Juice, Wheat, Gold and Silver markets had a day of buoyancy and the Coffee markets surged in value, while the Natural Gas, Cocoa, Cotton, Corn and Soybean markets tended softer and the Oil markets took a sharp negative dip for the 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 412.07.   The day starts with the strong U.S. Dollar steady and trading at 1.482 to Sterling and 1.056 to the Euro, while North Sea Oil is showing some degree of buoyancy in early trade and is selling at $ 53.25 per barrel.

The London market and New York markets both started the day yesterday with immediate buoyancy, as both markets seemingly attracted some support from the evidence of the increasing short positions within the New York market, a slightly firmer Brazil Real to the dollar and some short covering on the part of both the speculative sector and the consumer market industries.  Albeit that the latter consumer market industries are apparently already holding relatively long cover in the markets, as a precaution against a longer term positive correction.   The somewhat unforeseen strong rally within the New York market held on to its gains and likewise influenced support within the London market, to see both markets add value as the afternoon progressed.   The London market continued to end the day on a positive note and with 77.5% of the gains of the day intact, while the New York market likewise ended the day on a positive note and with 82.9% of the earlier gains of the day intact.   This relatively sharp recovery for the markets yesterday is supportive for sentiment and one might expect to see a follow through steady start for the markets in early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1739 + 53                                               MAR     134.90 + 8.45
MAY     1763 + 55                                               MAY     138.05 + 8.25
JUL      1790 + 55                                                JUL      141.35 + 8.20
SEP      1816 + 56                                               SEP      144.30 + 8.15
NOV     1836 + 58                                                DEC     148.15 + 8.00
JAN      1853 + 57                                               MAR     151.75 + 7.85
MAR     1873 + 59                                               MAY     153.50 + 7.70
MAY     1886 + 60                                                JUL     154.40 + 7.55
JUL      1900 + 61                                                SEP     154.90 + 7.55
SEP      1877 + 61                                                DEC    155.75 + 7.60

16th. March, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market increase their net short sold position within the market by 38.84% during the week of trade leading up to Tuesday 10th. March;  to register a net short sold position of 9,316 Lots.   This net short sold position which is the equivalent of 2,641,045 bags has most likely been further increases over the period of mixed but overall softer trade, which has since followed:

The National Coffee Council of El Salvador have announced that the countries coffee exports for the month of February were 29,524 bags or 52.06% higher than the same month last year, at a total of 86,233 bags.   This has contributed to the countries cumulative exports for the first five months of the present October 2014 to September 2015 coffee year being 16,956 bags or 9.59% higher than the same period in the previous coffee year, at a total of 193,777 bags.

The U.S.A. Maryland Weather Services have forecasted that while the main coffee districts in Brazil shall continue to encounter fair rains during the month of March that dry autumn weather shall start to impact in April and into May, which is in reality normal conditions for this time of the year.   They have likewise forecasted that there shall be some rains for the southern coffee districts of Brazil, which shall cause some short hiccups for the new crop harvest.   This is however not a report that indicates anything unusual and for the present, does little to influence the prevailing bearish sentiment within the coffee markets.

The National Coffee Association of the U.S.A. has concluded a new National Coffee Drinking Trends survey and has established that the number of Americans drinking a cup of coffee daily has fallen this year to 59%, from 61% last year and 63% the previous year.    This survey further indicating that there is a related age trend, as while the overall cup a day factor is down to 59%, the Americans within the age group of 60 years or older there is a 65% factor that drinks a cup of coffee a day.   Overall the survey has established that Americans now only drink on average 1.85 cups of coffee per capita per day, from 2.01 cups a day last year.

Contrary to this seemingly stalled to even declining per capita consumption of coffee in the U.S.A., the consumption of tea is steadily rising and in this respect the imports of tea to the U.S.A. have risen by 29.09% over the past nine years.   This growth in tea consumption is further highlighted by a recent survey which indicated that from coffee and tea drinkers that 77% of the 66 years and older prefer coffee to tea, 69% of the 45 to 65 year group prefer coffee to tea, 59% of the 30 to 44 year group prefer coffee to tea and only 50% of the 18 to 29 year group prefer coffee to tea.   This rise in the interest in tea and particularly so within the younger sector of the market is not going unnoticed and there is a steady increase in the number of speciality tea shops in the U.S.A. and with leading members of the speciality coffee sector actively investing into this industry, as is well illustrated by Starbucks purchase of the Teavana chain of tea shops.

With the further decline in the reference prices of the New York arabica and London robusta terminal markets last week, the resulting price resistance from within the internal markets of most producers, has tended to stall physical coffee trade during last week.   This is however foreseen to be a temporary situation as finally producers have to cash in stocks and in this respect with the consumer markets still relatively well stocked, to chase the presently lacklustre consumer market industry buyers.        

The arbitrage between the markets has broadened on Friday to register this at 52.33 usc/Lb., while this equates to a now less attractive 40.32% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,175 bags on Friday, to register these stocks at 2,274,498 bags.   There was meanwhile a larger in volume 4,419 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,714 bags.

The commodity markets had a soft end to the week last week and with the Reuters CRB Commodity Index slipping to 6 year lows, as the funds continue to look elsewhere to invest.   The Copper, Gold, Silver and Platinum markets showed some buoyancy and the Natural Gas market was steady, while the Oil, Sugar, Cocoa, Coffee, Cotton, Orange Juice, Wheat, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.30% lower; to see this Index registered at 410.32.   The day starts with the strong U.S. Dollar steady and trading at 1.476 to Sterling and 1.053 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 53.60 per barrel.

The London market and New York markets both started the day on Friday on a steady note and developing a degree of buoyancy for early trade and into the afternoon, with the London market posting gains of $ 29.00 per Mt. and the New York market posting gains of 1.85 usc/Lb., but this was not sustained and as the afternoon progressed and with the negative influences of the soft macro commodity index in play, both markets slipped back into negative territory.  The London market continued to end the day on a soft note and with 72.3% of the losses of the day intact, while the New York market likewise ended the day on a soft note and with 69.6% of the earlier losses of the day intact.  This soft close maintains the negative nature of the charts for the markets, but one might think that there shall be concerns over the more positive longer term supply fundamentals and with the evidence of the rising speculative net short sold position within the New York market, that this might influence a cautious and thinly traded steady start for early trade today against the soft prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1686 – 65                                               MAR     126.45 – 2.40
MAY     1708 – 60                                               MAY     129.80 – 2.40
JUL      1735 – 60                                                JUL      133.15 – 2.30
SEP      1760 – 60                                               SEP      136.15 – 2.25
NOV     1778 – 59                                                DEC     140.15 – 2.25
JAN      1796 – 60                                               MAR     143.90 – 2.25
MAR     1814 – 62                                               MAY     145.80 – 2.40
MAY     1826 – 68                                                JUL     146.85 – 2.45
JUL      1839 – 72                                                SEP     147.35 – 2.45
SEP      1816 – 107                                             DEC     148.15 – 2.35

Kind regards,  
Lionel

13th. March, 2015.
The National Coffee Council of Brazil has reported that they expect the new coffee crop that is getting close to maturity shall be from 4.6% to as much as 11.1% lower than the previous year’s modest crop, which they have on record at 45.34 million bags.    The new crop which they estimate shall include between 30 million and 32.15 million bags of arabica coffee and 10.3 million to 11.1 million bags of conilon robusta coffees, shall result in a new crop of between 40.3 million to 43.25 million bags.

This forecast would indicate in terms of projected export demand and domestic market demand an enormous deficit supply from the new crop of between 10.75 million and 13.7 million bags of coffee, which they are already forecasting to be followed by another deficit crop in 2016 of between 46 million and 47 million bags.   However with the National Coffee Council crop assessments and forecasts being traditionally very conservative, the report is most likely not going to buoy speculative market spirits for the present.   It is however in terms of the negative and soft nature of the markets at present a not unexpected report, as producers are fishing for news that shall halt the present slide in the fortunes of the coffee terminal markets.  

Meanwhile the International Coffee Organisation have reiterated their view that with a modest new Brazil crop on the nearby horizon, that they foresee an 8 million bags deficit global coffee supply for the next October 2015 to September 2016 coffee year.   In this respect they have repeated their projection for coffee supply for the coming coffee year at only 142 million bags, as against steadily growing global consumption.

Meanwhile it has been a wet week for the main coffee districts in Brazil and this is assisting to build up ground water retention levels ahead of the dry winter harvest season, as it is to assist in the development of the coffee cherries towards this harvest.  However following the delayed start to the spring and summer rain season in October last year and a relatively dry month of January this year, the reservoirs in south east Brazil and including the main arabica coffee districts are mostly critically low and is a matter of considerable concern for the urban centres.

The Buon Ma Thuot Coffee festival in Dak Lak province which accounts for approximately 32% of the coffee farming land in Vietnam, has wrapped up yesterday and with the usual agreements to further improve the quality of coffee processing over the coming five years.   The festivities might not however have been as good as most would have wished, as in the meantime the mostly robusta coffee farmers in Vietnam have had to try to absorb the negative price dictates of the softening London market, which is a matter of significant concern and is presently resulting in disbelieving price resistance within the internal market in Vietnam.

The one factor that one has to consider however in terms of the London market is that not only is coffee consumption growth mostly related to the price sensitive new markets and by nature leans heavily upon the supply of the more affordable robusta coffees, but that over the past few years the traditional developed consumer market have looked to find ways to use higher percentages of lower priced robusta coffees within their blends.  These developments and despite the prevailing softer prices for arabica coffees are within these competitive markets foreseen to be irreversible and thus with the combination of these markets steadily increasing robusta coffee demand that shall be accentuated by the smaller conilon robusta crop in Brazil this year, one might think that supply shall remain relatively tight.   Therefore one might expect that as the year progresses and despite the negative pressure of the funds that are presently forcing the market lower, it should finally assist to buoy the spirits within the relatively soft London market.

The arbitrage between the markets has broadened yesterday to register this at 52.00 usc/Lb., while this equates to a now less attractive 39.33% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,809 bags yesterday, to register these stocks at 2,276,673 bags.   There was meanwhile a larger in volume 12,366 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,133 bags.

The commodity markets took a mixed steady to softer track yesterday, along with the lack of appetite for commodities on the part of the funds.   The Sugar, New York arabica Coffee, Cotton, Copper, Wheat, Gold, Silver and Platinum markets showed buoyancy, while the Oil, Natural Gas, Cocoa, London robusta Coffee, Orange Juice, Corn and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% lower; to see this Index registered at 415.71.   The day starts with the U.S. Dollar near to steady and trading at 1.486 to Sterling and 1.059 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 56.80 per barrel.

The London market and New York markets both started the day yesterday on a marginally softer note and continued on this track into the afternoons trade when the New York market picked up some support, to head back into positive territory.   This was however short lived and the New York market once again slipped back to join the London market that remained on a steady downside track, but with the New York market once again posting a recovery late in the afternoon.   The London market continued to end the day on a very soft note and with 81.2% of the losses of the day intact, while the New York market continued to end the day with modest buoyancy and with 15.5% of the earlier gains of the day intact.  One might think that the steadier nature of the New York market might have some influence for a degree of buoyancy for the London market and perhaps a near to steady start for the New York market for early thin trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1751 – 52                                               MAR     128.85 + 0.45
MAY     1768 – 52                                               MAY     132.20 + 0.45
JUL      1795 – 51                                                JUL      135.45 + 0.40
SEP      1820 – 51                                               SEP      138.40 + 0.45
NOV     1837 – 54                                                DEC     142.40 + 0.45
JAN      1856 – 54                                               MAR     146.15 + 0.45
MAR     1876 – 53                                               MAY     148.20 + 0.35
MAY     1894 – 52                                                JUL     149.30 + 0.25
JUL      1911 – 53                                                SEP     149.80 + 0.35
SEP      1923 – 53                                                DEC    150.50 + 0.45

12th. March, 2015.
The Brazilian Institute of Geography and Statistics IBGE has lowered their earlier forecasts for the pending new 2015 coffee crop in Brazil by 2.73%, to now forecast a new crop of only a modest 42.7 million bags.   In this respect they have reduced their arabica coffee harvest by 2.1% to 31.5 million bags and their conilon robust crop by 4.4% to 11.2 million bags, with the late start to the rain season in October last year and the only modest rainfall in January being cited as the reasons for a more modest forecast.

This IBGE forecast is however well below the many respected trade and industry forecasts, which still talk in terms of a much larger new crop of closer to 49 million bags, albeit that this would still in terms of the country’s exports and domestic demand, still be a deficit crop.   However in terms of this rather bullish for the market IBGE report the lack of reaction within the markets yesterday, would seem to suggest that there is no belief in such low numbers that many would suggest being somewhat market manipulative in nature.    One can however in terms of the prevailing soft trading range for the coffee markets, expect to see more such low forecasts coming forth from Brazil.

CECAFE the Brazilian Exporters Council have meanwhile forecasted that following aggressive coffee exports for the previous year and into this year that they expect with stocks declining, that exports for 2015 shall dip by 3 million to 4 million bags, with an estimate for exports for the year of between 32.3 million to 33.3 million bags.   These added to the forecasted domestic market demand of between 21 million bags would seemingly indicate a joint demand of approximately 54 million bags, which would with private trade and industry forecasts for a new crop of around 49 million bags, require stocks to cover the additional 5 million bags of demand.

What is however noticeable from within this report was the fact that CECAFE have estimated that Brazil was holding stocks of approximately 15 million bags of coffee as at the beginning of April 2014, ahead of what was seen by the traditionally more reliable private trade and industry figure of a new 2014 crop of approximately 48 million bags.   Therefore indicating that despite the high volumes of exports over last year and into the start of this year, that this year’s new crop shall be supplemented by approximately 6 million bags of carryover stocks which if the CECAFE export forecasts and private trade and industry new crop forecasts are correct, shall ensure sufficient coffee supply to maintain Brazil coffee supply through to the next 2016 crop.

The big question is however what shall be the prospects for the 2016 crop, which still has to encounter the hurdles of the forthcoming June and July frost season and the October to March rain season, if it is to be a large new crop to contribute to longer term Brazil coffee supply and likewise to rebuild what shall by then, be minimal reserve coffee stocks.    Presently the funds and the speculative sectors of the market are not showing any concern over the threat of weather related problems for the follow on 2016 Brazil crop, but any negative weather events during this year, would most certainly once again kick start the markets into a sharp upside track.   However should Brazil experience normal weather conditions for the rest of the year and with seemingly little threat to weather conditions for the other main producer blocs, the markets might be due for significant negative pressure during the last quarter of the year.

The Agricultural ministry in Vietnam which has estimated that the country presently has 641,000 hectares under coffee has predicted that this shall be reduced by 6.4% over the next five years, to approximately 600,000 hectares.   It has to be noted however, that such predictions have been often repeated over the past six years and so far rather than reducing land under coffee, Vietnam has seen coffee farming continue to increase and with many trade and industry players within Vietnam already forecasting a year end new crop of close to 30 million bags.   Thus with the market supportive report rather long term in nature, it has no real influence upon the prevailing bearish sentiment within the coffee markets.

The arbitrage between the markets has narrowed yesterday to register this at 49.20 usc/Lb., while this equates to a now less attractive 37.34% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 15,643 bags yesterday, to register these stocks at 2,273,864 bags.   There was meanwhile a larger in volume 19,021 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,499 bags.

The overall soft commodity markets tended to steady yesterday, but remain under pressure from the firm nature of the U.S. dollar, which has gained support from the speculation of rising U.S. interest rates.  Albeit that the firm nature of the dollar is depressing inflation within the U.S.A. and low inflation might not be conducive to raising interest rates, which might well delay such action by the U.S. Federal Reserve.   The Oil, Natural Gas, Sugar, Wheat and Corn markets had a day of buoyancy, while the Cocoa, Coffee, Cotton, Copper, Orange Juice, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% lower; to see this Index registered at 416.99.   The day starts with the U.S. Dollar steady and trading at 1.494 to Sterling and 1.053 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 57.30 per barrel.

The London market and New York markets both started the day yesterday on a marginally softer note and continued on this track into the afternoons trade when both markets came under further pressure to extend the losses, but with the New York market attracting a short term recovery into positive territory, which soon faltered.   The markets and with the negative nature of the macro commodity index having an influence slipped back into negative territory for the rest of the day, supported mostly at the lows by opportunist industry buying activity.   The London market continued to end the day on a soft note and with 94.7% of the losses of the day intact, while the New York market likewise ended on a soft note and with 84.6% of the earlier losses of the day intact.   This soft close does little to inspire and one might think that the markets are due for an another hesitant steady to soft start for early trade today against the soft prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1803 – 28                                               MAR     128.40 – 3.30
MAY     1820 – 36                                               MAY     131.75 – 3.30
JUL      1846 – 34                                                JUL      135.05 – 3.20
SEP      1871 – 34                                               SEP      137.95 – 3.20
NOV     1891 – 33                                                DEC     141.95 – 3.15
JAN      1910 – 33                                               MAR     145.70 – 3.10
MAR     1929 – 34                                               MAY     147.85 – 2.90
MAY     1946 – 32                                                JUL     149.05 – 2.75
JUL      1964 – 36                                                SEP     149.45 – 2.95
SEP      1976 – 36                                                DEC    150.05 – 3.00

11th. March, 2015.
The Vietnam Coffee and Cocoa Association have stepped in with what must be seen to be somewhat market manipulative report that due to dry weather and aged trees the recently completed new crop of mostly robusta coffees was 20% lower than the previous 2013/2014 crop, at a total of only 22.17 million bags.   This figure is very much lower than the host of private trade and industry assessments of the new crop, which vary between 26 million to 28 million bags.   Thus one might think that the figure is which is so dramatically lower than what is generally seen to be reality shall be largely ignored by the speculative sector of the related London market, which is presently trading in a softer trading range.

Meanwhile the fifth annual Buon Ma Thuot Coffee Festival has opened in the leading Vietnam coffee province of Dak Lak, where there shall no doubt be much discussion over the softer nature of the international coffee markets, which is having its impact upon domestic market coffee prices.   Especially so as the Vietnam Dong that started the year at 21,370 to the U.S. dollar is presently trading at 21,320 to the dollar and the surging value of the dollar has not to date, assisted to counter the negative effects of the softer dollar based international coffee markets.

The soft nature of the New York market is meanwhile starting to become a matter of concern for the Colombian coffee farmers as it is no doubt for coffee farmers worldwide, with the Dignidad Cafetera movement in Colombia having approached their government to once again start implementing subsidies for the farmers, to supplement income from their coffee sales.   In this respect for the government to contribute approximately 327 million U.S. dollars to a fund that would assist to stabilise domestic coffee prices, but it is a request that is coming to a government that has already had to absorb the negative effects of the falling oil prices and is not expected to be easily receptive to this demand from the coffee farmers.  

The question is what might be the outcome of these discussions as the memories of 2013 protests and blockades of coffee deliveries that were inspired by the Dignidad Cafetera movement are still fresh and might once again be a threatening factor, if the government is not forthcoming with financial assistance.   But it is early days and one would expect that there might be some aggressive debate still to come, but there nevertheless remains a possibility that farm support might not be immediately forthcoming and that protest action within Colombia shall come to the fore to buoy the speculative spirits within the New York market.   

The Ministry of Trade in Ethiopia has reported that coffee exports for the first six months of their official 8th. July to 7th. July financial year were marginally 0.5% below budget, at a total of 1,220,465 bags.   However with the countries exporters having been able to take advantage of the higher prices that were in play during the second half of last year, the income from these coffee exports was 14.31% above budget, at a total of 307.5 million U.S. dollars.   

Coffee exports from Ethiopia with the new crop washed coffees coming into play from December and the new crop natural process coffees from February each year are traditionally higher in volume during the second half of the official financial year, for which the ministry has budgeted coffee exports of in excess of 3.9 million bags and at a value of 862.5 million U.S. dollars.  But with the negative nature of the New York market impacting upon sales the coffee exports the volumes of exports are starting to fall well below the budgeted figures and likewise the export income, which shall be a matter of concern for the Ethiopian government.  

The arbitrage between the markets has narrowed yesterday to register this at 50.86 usc/Lb., while this equates to a now less attractive 37.66% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,330 bags yesterday, to register these stocks at 2,258,221 bags.   There was meanwhile a larger in volume 4,055 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 67,520 bags.

The commodity markets were again under pressure yesterday, with the majority of the markets contributing to the declining macro commodity index.   Within this and while the New York coffee market is at a thirteen month low, the Sugar market is at a rather dismal six year low.  The Natural Gas and Wheat markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.99% lower; to see this Index registered at 418.37.   The day starts with the U.S. Dollar steady and trading at 1.507 to Sterling and 1.069 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 56.25 per barrel.

The London market and New York markets both started the day yesterday on a marginally softer note and continued on this track into the afternoons trade when both markets came under further pressure to extend the losses, but with a degree of bounce coming into play as the afternoon progressed to limit the losses.  The London market continued to end the day on a softer note and with 83.3% of the losses of the day intact, while the New York market ended the day on a soft note and with 60.9% of the earlier losses of the day intact.   This soft close which followed a day of mostly thin and lacklustre trade is likely to inspire little better than a steady to soft start for early trade today against the prices set, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1831 - 17                                                MAR     131.70 – 1.95
MAY     1856 – 15                                                MAY     135.05 – 1.95
JUL      1880 – 17                                                 JUL      138.25 – 1.85
SEP      1905 – 16                                                SEP      141.15 – 1.80
NOV     1924 – 17                                                 DEC     145.10 – 1.85
JAN      1943 – 13                                                MAR     148.80 – 1.85
MAR     1963 – 13                                                MAY     150.75 – 1.90
MAY     1978 – 11                                                 JUL     151.80 – 1.80
JUL      2000 – 11                                                 SEP     152.40 – 1.85
SEP      2012 – 11                                                DEC     153.05 – 1.85

10th. March, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 124.75% in the week of trade leading up to Tuesday 3rd. March;  to register a now net short sold position of 1,576 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 9.73%, to register a net long on the day of 22,830 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 689.11%%, to register a now net short sold position of 1,139 lots on the day.   This net short sold position which is the equivalent of 1,902,255 bags has however most probably been slightly reduced over the period of overall positive trade which has since followed and likewise that of the managed money funds.

The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market decreased their net long position within this market by 6.71% in the week of trade leading up to Tuesday 3rd. March, to see this long position registered at 20,957 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 3,492,833 bags has most likely been little changed during the period of mixed but overall only marginally negative trade that has since followed.

While there is evidence of some modest increase in export selling of robusta coffee stocks out of Indonesia, the internal market in Vietnam remains tight and with not only farmers but internal market and traders who have purchased from the farmers, showing relatively strong price resistance to the mills and exporters.  This continues to slow new robusta coffee business out of Vietnam as the resulting relatively high differential demands for new business from the exporter’s, limits buying interest to only to those consumer clients who have a short term requirement of robusta coffee.  

The more detailed Brazil coffee export figures for the month of February are seen to have been 220,000 bags or 8.27% lower than the same month last year, at a total of 2,440,000 bags, while added to this are the exports of value added soluble coffees calculated in terms of their green coffee equivalent, which were 22,867 bags or 8.6% lower than the same month last year, at a total of 243,123 bags.    This results in the combined total being 242,867 bags or 8.3% lower than the same month last year, at a total of 2,683,123 bags.

However in terms of value and with the majority of these exports having been related to sales registered prior to the recent dip in the value of the international coffee markets, the Brazil coffee exports for the month of February were 112.6 million dollars or 27.34% higher than the same month last year, at a total of 524.5 million U.S. dollars.    However in terms of value in domestic currency terms and with the Brazil Real having steadily weakened over the past few months against the muscle of the U.S. dollar, the income from February 2015 coffee exports was most probably over 50% higher than the same month last year.

This windfall in terms of farm gate prices for Brazil’s coffee farmers that comes with the weaker nature of the Brazil Real that is today trading at 3.14 to the U.S. dollar and unless there is soon to be a recovery for the international coffee prices is however short term, as new export sales are priced against a much softer international market, which negates the advantages of a weaker domestic currency.   This and with stocks now significantly lower and the probability for a deficit new crop on the horizon, is resulting in strong price resistance within the internal market and thus extrapolating into much firmer differentials relative to the international markets being demanded by the countries exporters for new business.   A trend that is common to most producers for the present, which is tending to slow the physical coffee trade.   

The arbitrage between the markets has narrowed yesterday to register this at 52.13 usc/Lb., while this equates to a now less attractive 38.05% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,592 bags yesterday, to register these stocks at 2,260,551 bags.   There was meanwhile a larger in volume 10,173 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 63,465 bags.

The commodity markets were mixed yesterday, but with many markets encountering relatively lacklustre cautious trade, while the funds are tending to turn their backs upon commodities for the present.   The U.S. Oil, Copper, Orange Juice, Wheat, Corn, Soybean, Gold and Platinum markets showed buoyancy, while the Brent Oil, Natural Gas, Sugar, Cocoa and Coffee markets had a softer day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.26% lower; to see this Index registered at 422.55.   The day starts with the U.S. Dollar steady and trading at 1.508 to Sterling and 1.080 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 58.10 per barrel.

The London market started the day yesterday with follow through buoyancy and followed by only modest losses for the New York market, which had ended the Friday on a very positive note.    The markets continued into the afternoons trade with the London market maintaining its buoyancy and the New York market briefly recovering its losses but this was not sustained and the New York market with the American back on the field of play encountered renewed selling and sell stops being triggered, to once again encounter relatively sharp losses and followed by a slip back into negative territory for the London market.    The London market continued to end the day on a modestly softer note and with 50% of the earlier losses of the day intact, while the New York market ended the day on a softer note and with 50.4% of the earlier losses of the day intact.   This soft close does little to inspire but perhaps with the markets having bounced off the lows yesterday it might assist to influence a steady start for early thin trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1848 + 1                                                 MAR     133.65 – 2.85
MAY     1871 – 10                                               MAY     137.00 – 2.90
JUL      1897 – 10                                                JUL      140.10 – 2.90
SEP      1921 – 11                                               SEP      142.95 – 2.90
NOV     1941 – 9                                                  DEC     146.95 – 2.85
JAN      1956 – 10                                               MAR     150.65 – 2.85
MAR     1976 – 10                                               MAY     152.65 – 2.70
MAY     1989 – 10                                                JUL     153.60 – 2.65
JUL      2011 – 10                                                SEP     154.25 – 2.65
SEP      2023 – 10                                                DEC    154.90 – 2.75

9th. March, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the Non Commercial Speculative sector of this market switch during the week of trade leading up to Tuesday 3rd. March from a modes net long position of 1,139 Lots to a net short sold position of 6,710 Lots.    This net short sold position which is the equivalent of 1,902,255 bags has however most probably been somewhat reduced over the period of overall positive trade, which has since followed.

The Coffee Growers Federation in Colombia has reported that the countries coffee production for the month of February was 155,000 bags or 17.73% higher than the same month last year, at a total of 1,029,000 bags.   This contributes to the countries cumulative production for the first five months of the present October 2014 to September 2015 coffee year to be 248,000 bags or 4.8% higher than the same period in the previous coffee year, a total of 5,419,000 bags.

Meanwhile the Colombian Coffee Growers Federation have reported that the countries coffee exports for the month of February were 96,000 bags or 9.84% higher than the same month last year, at a total of 1,072,000 bags.    This contributes to the countries cumulative exports for the first five months of the present October 2014 to September 2015 coffee year to being 250,000 bags or 5.06% higher than the same period in the previous coffee year, at a total of 5,186,000 bags.

These very positive figures from Colombia and with the climatic conditions presently very positive for the farmers and more and more of the recently planted new trees that are related to the countries rejuvenation program coming into full yielding maturity, would indicate that both production volumes and export volumes shall continue to steadily increase.    In this respect to see production and export volumes for this present coffee year to most likely get close to 13 million bags and to well exceed the 12,128,400 bags produced during the previous October 2013 to September 2014 coffee year and an export performance of 10,960,000 bags.

The International Coffee Organisation following last week’s meetings in London have come forth with market supportive forecasts for global coffee consumption to increase by 2% during this year to close to 152 million bags, as against a their slightly improved estimate for overall coffee supply for the present October 2014 to September 2015 coffee year of a relatively modest 142 million bags.   This consumption figure is however in terms of many other private trade and industry estimates for consumption this year to be a more modest 148 million to 149 million bags and while there is no doubt that following last year’s more modest Brazil crop and another one due this year that there is deficit supply, it is perhaps not quite as extreme as the ICO is presently indicating.   While the fundamental of deficit supply for the medium term and one that is influencing a steady liquidation of the still substantial world coffee stocks, should as the year progresses have an influence to limit the downside potential for the presently relatively soft international coffee markets.

The arbitrage between the markets has broadened on Friday to register this at 54.58 usc/Lb., while this equates to a now less attractive 39.01% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 319 bags on Friday, to register these stocks at 2,252,959 bags.   There was meanwhile a larger in volume 10,274 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 73,638 bags.

The Certified robusta coffee stocks held against the London market were seen to have increased by 83,333 bags or 3.28% over the two weeks of trade leading up to Monday 2nd. March, to see these stocks registered at 2,624,000 bags.   These stocks are however with the price resistance being shown within Vietnam that is inflating the relative value of new crop coffees from this leading supplier, unlikely to experience any dramatic growth on the short term.   

The commodity markets were mixed on Friday, but with many encountering the negative influences of the firming U.S. dollar, which gained support from the new positive employment figures from the U.S.A.  The Coffee, Orange Juice and Wheat markets had a day of buoyancy that the Sugar market had a steady day, while the Oil, Natural Gas, Cocoa, Cotton, Copper, Corn, Soybeans, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.75% lower; to see this Index registered at 423.65.   The day starts with the U.S. Dollar steady and trading at 1.507 to Sterling and 1.085 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 58.65 per barrel.

The London and New York markets had a marginally softer start for trade on Friday, with both markets taking this track into the early afternoon’s thin and lacklustre trade.   The New York market did however start to attract support as the afternoon progressed and move back into positive territory, with the London market following suit and finally following a steadily firming New York market into positive territory.     Trade was now however high in volume and while the gains in the New York market were relatively impressive, it was a seen to be only a modest rally for the late in the day’s trade.   The London market continued to end the day with buoyancy and with 66.7% of the gains of the day intact, while the New York market ended the day on a strong note and with 96% of the gains of the day intact.   This positive close and despite the negative nature of the strong U.S. dollar is likely to influence as steady to buoyant start for early trade today against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1847 + 7                                                 MAR     136.50 + 4.95
MAY     1881 + 6                                                  MAY     139.90 + 4.85
JUL      1907 + 7                                                   JUL      143.00 + 4.85
SEP      1932 + 7                                                  SEP      145.85 + 4.90
NOV     1950 + 8                                                   DEC     149.80 + 4.95
JAN      1966 + 8                                                  MAR     153.50 + 5.00
MAR     1986 + 8                                                  MAY      155.35 + 5.10
MAY     1999 + 8                                                   JUL      156.25 + 5.10
JUL      2021 + 8                                                   SEP      156.90 + 5.10
SEP      2033 + 8                                                   DEC     157.65 + 5.15

6th. March, 2015.
Brazil in terms of overall exports of both green coffee and value added soluble coffee calculated in terms of their green coffee equivalent has registered exports that are close to 36 million bags, over the past twelve months.   This is a significant number and with exports over the past few months having been further inspired by the steadily declining value of the Brazil Real that has broken through 3 to the U.S. dollar and is now heading into a nine year low, but these exports along with a 20.3 million bags per annum domestic consumption would have resulted in the liquidation of approximately 7 million bags of carryover stocks into the 2014 crop.

Thus in terms of coffee availability the supply is tightening and with another potentially modest new crop to the fore and with the international market prices having turned soft, the internal market selling activity is starting to dry up within Brazil.   This is having a significant affect upon asking differentials for new arabica coffee export business out of Brazil for the present, which is no doubt going to likewise slow the volumes of new business over the coming months.  Albeit that the exporters still have significant volumes of forward contract commitments in hand to cover and those that are still short sold, having to pay up within the internal market to secure coffees from the presently dwindling stocks.

Meanwhile the rain reports from south east Brazil are good and there are ample rains to assist to secure the potential of the forthcoming new arabica coffee crop, but with the conilon robusta farmers within the state of Espirito Santo reporting 20% losses from their earlier new crop robusta forecasts.   This factor has however been discounted by the private trade and industry reports, which on the back of a much improved arabica coffee crop potential, still indicate a new crop potential that exceeds 49 million bags.  A new crop that shall along with an estimated carryover stock of in excess of 5 million bags, continue to support good market share for Brazil coffees within the consumer markets.   But the next 2016 crop shall need to be a large one, if Brazil is to continue to maintain this market share on the longer term and this factor with many weather hurdles to the fore and including both the forthcoming frost season and the follow on spring and summer rain season, remains a very big question.

The CPC U.S. based weather forecaster now sees a 50% to 60% chance for a El Nino phenomenon to continue through the second and third quarters of this year, but so far this El Nino is not foreseen to be threatening to the Pacific Rim coffee producing countries and is being largely ignored by the markets.   Thus for the present there is little in the way of weather factors having any influence upon market sentiment, while the funds continue to pressure the coffee market lower, as they are doing for so many other markets and taking the macro commodity index that has lost 23% in value over the past twenty one month’s ever lower.

The arbitrage between the markets has narrowed yesterday to register this at 50.00 usc/Lb., while this equates to a now less attractive 37.02% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 741 bags yesterday, to register these stocks at 2,252,640 bags.   There was meanwhile a larger in volume 3,651 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 83,912 bags.

These stocks remain dominated as is tradition by the producer bloc of Mexico and Central America, who still account for 1,233,736 bags or 54.77% of the stocks and followed by Peru who contribute 444,439 bags or 19.73% of the stocks, with the South and Central American dominance of the stocks secured by Colombia’s 189,552 bags or 8.41% share and Brazil’s 9,247 bags or 0.41% share of the stocks.  However most of these stocks are made up by discounted aged coffees and with the prevailing price resistance within the internal markets of all of the producer countries there are is little in the way of volumes of fresh new crop coffees available at price levels conducive to tendering coffees to the exchange, which is likely to see these certified stocks of the New York market remain modest for at least the medium term.  But the relatively low certified stock figure is for the present providing little in the way of support for speculative sentiment, towards the New York market.

The commodity markets were generally softer yesterday, in line with the firm nature of the U.S. dollar, which continues to flex its muscles.   The Brent Oil, Natural Gas, Sugar, London robusta Coffee, Orange Juice and Corn markets had a day of buoyancy and the Silver market was steady, while the U.S. Oil, Cocoa, New York arabica Coffee, Cotton, Copper, Wheat, Soybeans, Gold and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.48% lower; to see this Index registered at 426.83.   The day starts with the U.S. Dollar steady and trading at 1.524 to Sterling and 1.102 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 60.20 per barrel.

Somewhat predictably following the previous day’s mixed close, the London market started the day showing immediate buoyancy and the New York market started on a modestly softer note, with both markets maintaining this stance into the afternoon trade.    Trade was however relatively lacklustre and thin following the past few days of intense activity and the markets maintained their mixed stance for the rest of the day, with the markets taking very much a sideways track.   The London market continued to end the day with some buoyancy and with 59.4% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 58.8% of the earlier losses of the day intact.    This mixed close is most likely due to inspire a hesitant and cautious near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1840 + 6                                                 MAR     131.55 – 2.50
MAY     1875 + 19                                               MAY     135.05 – 2.50
JUL      1900 + 17                                                JUL      138.15 – 2.50
SEP      1925 + 17                                               SEP      140.95 – 2.45
NOV     1942 + 16                                                DEC     144.85 – 2.45
JAN      1958 + 17                                               MAR     148.50 – 2.40
MAR     1978 + 17                                               MAY     150.25 – 2.55
MAY     1991 + 17                                                JUL      151.15 – 2.50
JUL      2013 + 17                                                SEP      151.80 – 2.35
SEP      2025 + 17                                                DEC     152.50 – 2.05

5th. March, 2015.
The National Coffee Institute in Honduras have reported that the countries coffee exports for the month of February were 186,307 bags or 35.60 higher than the same month last year, at a total of 709,670 bags.   This improved performance contributes to the countries cumulative coffee exports for the first five months of the present October 2014 to September 2015 coffee year being 424,971 bags or 31.12% higher than the same period in the previous coffee year, at a total of 1,790,359 bags.

This surge in exports from Honduras is not unexpected, as the country has not experienced the same degree of internal market price resistance over the past few months, as has been experienced by their neighbours in Mexico and Central America.  Thus making Honduras new crop coffees comparatively affordable along with the price competitive coffees from the rising Colombian coffee supply, to see these two countries dominate fine washed arabica coffee supply to the consumer markets from the Latin American washed arabica coffee producer bloc.

In the meantime with this new crop from Honduras being significantly larger than the past Roya or Leaf Rust damaged 2013/2014 crop, the National Coffee Institute are forecasting that coffee exports for the present coffee year shall be 13.64% higher than the exports during the previous coffee year, at a total of approximately 4.8 million bags.   While with these exports surging and predicted to continue so for the coming two to three months, there is pressure upon the mills within the country to keep up with their forward sales commitments and already many have to delay the shipment positions for new business by up to two months.  

The Brazil Real has fallen to 2.97 to the U.S. dollar which is assisting Brazils arabica coffee farmers to counter the negative aspects of the recently softening nature of the reference prices of the New York market, but not sufficiently a move by their currency, to take all of the bite out of a softer New York market.   This has caused significant price resistance within the internal market and has seen asking differentials on the part of the countries exporters firm rather dramatically over the past few days as has been the case for most other arabica coffee producers, but perhaps last night’s recovery for the New York market might see differentials for new business soften a little.   Albeit that the market is still relatively soft and one cannot really expect that arabica producer asking differentials shall quickly dip back to the levels that were experienced a few weeks ago, prior to the downside track being taken by the New York market.

Meanwhile yesterday’s recovery for the New York market which was accompanied by both speculative profit taking buy stops and catch up opportunist consumer market industry buying was not mirrored with the London market, which slid back to new lows.   This shall no doubt see the internal market price resistance continue within Vietnam and maintain the relatively firm asking differentials on the part of the countries exporters, to negatively affect export volumes of new crop robusta coffees for at least the short term.

The farmers in Vietnam do however have the pending competition due from larger new Indonesian and Indian robusta coffee crops, which might make it a little more difficult in the coming months to resist the price dictates of the London market as finally, their significantly large unsold coffee stocks shall have to be cashed in and come to the market.   But on the short term and so long as the London market does not post a good recovery, one can expect that the new crop export differentials from Vietnam shall remain relatively firm.

The arbitrage between the markets has broadened yesterday to register this at 53.36 usc/Lb., while this equates to a now less attractive 38.79% price discount for the London robusta coffee market.   This arbitrage is  continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 7,546 bags yesterday, to register these stocks at 2,251,899 bags.   There was meanwhile a smaller in volume 1,350 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 87,563 bags.

The commodity markets were generally softer yesterday, in line with the firm nature of the U.S. dollar, which continues to flex its muscles.   The New York arabica Coffee market was however an exception and posted 6.01% gains for the day, while the Natural Gas and Copper markets had a day of buoyancy, while the Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Orange Juice, Wheat, Corn, Soybeans, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% higher; to see this Index registered at 428.89.   The day starts with the U.S. Dollar steady and trading at 1.524 to Sterling and 1.104 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 60.10 per barrel.

The London market predictably started the day yesterday on a catch up softer track, following the late in the day soft close for the New York market on Tuesday.   This was likewise rather predictably followed by a corrective positive start for the New York market and with the markets entering the afternoon’s trade with the New York market having extended its gains, while the London market had recovered half of the earlier morning losses.    The London market remained under pressure as the afternoon progressed and again lost some more weight, while the New York market with industry buying seemingly assisting to provide support maintained its new found muscle.   This formed a base for the New York market that encountered later in the day volume profit taking buying support to come into play and with buy stops assisting to accentuate the gains, while the London market recovered some of its losses.   The London market continued to end the day on a soft note and with 52.1% of the earlier losses of the day intact, while the New York market ended the day on a firm note and with 88.6% of the gains of the day intact.    This close sends mixed signals, but one might expect to see some catch up buoyancy for the London market and a steady start for the New York market for early thin trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1834 – 24                                               MAR     134.05 + 7.80
MAY     1856 – 25                                               MAY     137.55 + 7.80
JUL      1883 – 25                                                JUL      140.65 + 7.80
SEP      1908 – 25                                               SEP      143.40 + 7.75
NOV     1926 – 24                                                DEC     147.30 + 7.75
JAN      1941 – 22                                               MAR     150.90 + 7.85
MAR     1961 – 17                                               MAY     152.80 + 7.75
MAY     1974 – 17                                                JUL     153.65 + 7.30
JUL      1996 – 17                                                SEP     154.15 + 7.25
SEP      2008 – 17                                                DEC     154.55 + 7.05

4th. March, 2015.
Yesterday was the day the market died for the New York market, as funds stepped in late in the day to sell the market and with fund sell stops triggering each other to rather dramatically to accelerate and accentuate the sharp losses.   These losses which were accompanied by relatively high late in the day volumes and an incredible 6.22% loss for the day by the close, taking the market to a thirteen month low and most certainly, well below cost of production for the majority of arabica coffee producers.   While the selling over the past five days of trade has most likely taken both the Non Commercial speculative sector and the Managed Money fund sector into net short sold positions, which might be supportive for corrective profit taking too soon start to come into play.

The National Coffee Institute in Costa Rica have reported that the countries coffee exports for the month of February were 10,775 bags or 8.02% lower than the same month last year, at a total of 123,529 bags.   This dip contributes to the countries cumulative coffee exports for the first five months of the present October 2014 to September 2015 coffee year being 42,606 bags or 11.39% lower than the same period in the previous coffee year, at a total of 331,531 bags.  

This dip in exports is however not really a reflection upon the size of the new crop harvest that is near to completion, but more so related to the uncompetitive prices demanded within the internal market and the related relatively firm asking export differentials that has seen Costa Rica lose market share to more affordable coffees from Colombia, Honduras and Nicaragua.  But more so to the former two regional producers, who have so far been more market related in their export prices, albeit that following the past couple of weeks of decline in the reference prices of the New York market, that even these producers are being forced by internal market price resistance to significantly increase their asking export differentials for new business.   

The softer nature of the reference prices of the London robusta coffee market is having a marked effect upon internal market selling activity within Vietnam, with farmers and internal market traders maintaining their price resistance towards the offers from the mills and exporters.    Thus exporters are struggling to attract new business on the basis of the internal market asking price levels and new sales are slow, while farmers are presently holding relatively high levels of new crop stocks.    Much of these stocks are being held within the exporter’s warehouses, but until prices are agreed with the farmers, remain as unsold farmer stocks.

This slow sales scenario is already influencing many traders and exporters in Vietnam to start forecasting that coffee exports for the month of March might only result in exports of between 1.5 million and 1.83 million bags, which would be similar to the previous month’s levels.   Making note that the previous month was both a short month and with one week of Tet New Year holiday within the month, to make it a very short month and one that would most usually be much exceeded in terms of export volumes, during the following month.

Thus with asking export differentials from both the arabica and robusta producers in general firming, the physical coffee markets are very much in the doldrums for the present, while players await the further direction the presently negative funds and for the producers to fall more in line with the prices dictated by the funds.    Seemingly with the producers standing firm and wishing for corrective measures from what most would consider oversold markets, while many consumers are waiting for the reality to hit and for producers to be more market related in their offers.  But these are factors that have little influence upon the funds, who are taking their own track and one that is proving to be both somewhat unrealistic and unpredictable for the short term.

The arbitrage between the markets has narrowed yesterday to register this at 44.43 usc/Lb., while this equates to a now less attractive 34.24% price discount for the London robusta coffee market.   This arbitrage is nevertheless continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to significantly firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 12,537 bags yesterday, to register these stocks at 2,259,445 bags.   There was meanwhile a similar in volume 12,005 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 86,213 bags.

The commodity markets were mixed yesterday, but with the overall macro commodity index taking a significantly softer track, as the day progressed.   The Oil, Natural Gas, Cocoa, Wheat, Corn and Platinum markets had a day of buoyancy, while the New York arabica Coffee market and Orange Juice markets collapsed and the Sugar, Cotton, Copper, Soybeans, Gold and Silver markets having a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.99% lower; to see this Index registered at 427.84.   The day starts with the U.S. Dollar steady and trading at 1.535 to Sterling and 1.116 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 60.75 per barrel.

The London and New York markets started the day yesterday within an environment of thin and lacklustre trade, with the London market tending softer and the New York market on a steadier track.   The New York market did not however sustain its hesitant buoyancy and both markets traded through the early afternoon on a softer note, but with little in the way of activity within either of the markets.  The late in the afternoon trade did however change everything and with fund selling within the New York market having its influence to see volumes pick up for both markets and while it did not have that much of a negative influence upon value in the London market, it certainly took the wind out of the sails of the New York market.   The London market continued to end the day on a modestly softer note and with 50% of the losses for the day intact, while the New York market ended the day on a very soft note and with 90.6% of the losses of the day intact.    This dismal close for the New York market shall have stunned most sectors of the market, but one might expect to see a softer start for the London market and perhaps some corrective buoyancy for the New York market for early thin trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1858 – 9                                                 MAR     126.25 – 8.85
MAY     1881 – 11                                               MAY     129.75 – 8.60
JUL      1908 – 8                                                  JUL      132.85 – 8.50
SEP      1933 – 9                                                 SEP      135.65 – 8.45
NOV     1950 – 9                                                  DEC     139.55 – 8.35
JAN      1963 – 11                                               MAR     143.05 – 8.20
MAR     1978 – 11                                               MAY     145.05 – 7.95
MAY     1991 – 11                                                JUL     146.35 – 7.30
JUL      2013 – 11                                                SEP     146.90 – 6.90
SEP      2025 – 11                                                DEC    147.50 – 6.35

3rd. March, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market increase their net long position within this market by 3.22% in the week of trade leading up to Tuesday 24th. February, to see this long position turned into a net long that was registered at 22,464 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 3,744,000 bags has most likely been little changed during the period of mixed but overall only marginally negative trade that has since followed.

With the month of February over the Indonesian island of Sumatra which dominates the nations robusta coffee production has reported that the islands robusta coffee exports for the month of February were 11,069 bags or 4.98% higher than the same month last year, at a total of 233,151 bags.   This follows a relatively dismal performance over the previous four months and therefore the cumulative robusta exports from Sumatra for the first five months of the present new October 2014 to September 2015 coffee year are 971,989 bags or 39.78% lower than the same period in the previous coffee year, at a total of 1,471,603 bags.

This relatively poor five month performance on the part of robusta coffee supply from Sumatra is of course related to a greater degree to a poor weather related crop last year and one can expect that for the short term and ahead of the new crop that starts to come into play during the second quarter of this year, that the figures shall continue to be relatively flat for the next two to three months.   However the weather conditions have been much improved and the prospects are for a much improved new crop, which should see the Sumatran robusta coffee exports start to pick up and become more aggressive by the third quarter this year and therefore, the last quarter of the present coffee year.

The preliminary coffee export figures for Brazil for the month of February have seen the coffee exports for the month being 89,300 bags or 3.43% lower than the same month last year, at a total of 2,513,500 bags.   These export volumes in terms of last year’s relatively modest crop are impressive numbers and well illustrate the benefit that the countries industry has had, from the significant carryover stocks of mostly arabica coffees that were inherited at the start of the last crop.

Meanwhile the early March rains are widespread over the Brazil coffee areas and are forecasted to intensify as the week progresses and carry on into the following week, which is proving beneficial for the development of the new crop that is still under much debate.   This new crop despite the negative effects of an approximately three weeks late start to the spring and summer rains in October, is now being largely seen to be at least 49 million bags, but one might still expect to see some more modest and market supportive numbers emanating from within Brazil.

The Mondelez International story continues to come to the consumer market press and while the industry players await the outcome of the European Competitions Commission decision on the merger with D. E. Master Blenders 1753, Mondelez International have since divested themselves of their 50% share in the dominant Japanese roasting company Ajinomoto General Foods.   This share having been sold to their partner, who had declined the opportunity to be part of the merger.   

The arbitrage between the markets has narrowed yesterday to register this at 52.53 usc/Lb., while this equates to a relatively attractive 37.97% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 675 bags yesterday, to register these stocks at 2,271,982 bags.   There was meanwhile a larger in volume 51,977 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 74,208 bags.

The commodity markets were once again on the back foot yesterday with the overall macro commodity index taking a significantly softer track, as the day progressed.   The Orange Juice market had a firmer day’s trade and the U.S. Oil, Cotton and Copper markets were steady for the day, while the Brent Oil, Natural Gas, Sugar, Cocoa, Coffee, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.45% lower; to see this Index registered at 432.11.   The day starts with the U.S. Dollar steady and trading at 1.538 to Sterling and 1.119 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 59.95 per barrel.

The London and New York markets started the day yesterday taking a positive stance and maintained this track that saw the London market post $ 16.00 per Mt. and the New York market 1.90 usc/Lb. gains into the afternoon’s trade, but once again and possibly with the overall macro commodity index having turned back onto a negative track and having some influence, both markets slipped back into negative territory as the afternoon progressed.   This remained the track for the rest of the day and with lacklustre physical trade on the part of the consumer market industries who are resisting the higher differential demands from the producers adding to the demise of the markets, which stuttered through for the rest of the day.   The London market continued to end the day on a soft note and with 48.4% of the earlier losses of the day intact, while the New York market continued to likewise end the day on a soft note and with 84.3% of the earlier losses of the day intact.   This disappointing close and with the charts pointing south for the speculative sector of the market is unlikely to inspire much better than a near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1867 – 4                                                 MAR    135.10 – 1.65
MAY     1892 – 15                                               MAY    138.35 – 2.15
JUL      1916 – 13                                                JUL     141.35 – 2.15
SEP      1942 – 11                                               SEP     144.10 – 2.15
NOV     1959 – 11                                                DEC    147.90 – 2.10
JAN      1974 – 9                                                 MAR    151.25 – 2.00
MAR     1989 – 9                                                 MAY    153.00 – 1.85
MAY     2002 – 9                                                  JUL     153.65 – 1.65
JUL      2024 – 9                                                  SEP     153.80 – 1.60
SEP      2036 – 9                                                  DEC    153.85 – 1.50

2nd. March, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 54.78% in the week of trade leading up to Tuesday 24th. February;  to register a net long position of 6,367 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 1.01%, to register a net long on the day of 25,290 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 87.13%, to register a net long of 1,139 lots on the day.   This net long position that is the equivalent of 322,901 bags has most likely been further decreased to perhaps even moved into a net short sold position over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds has most likely been further reduced.

The question is what influence might the evidence of the liquidation of the net long position of the Non Commercial Speculative sector of the market that might have already by now turned into a net short position have upon speculative sector the market for trade this week, as with the uncertainty of the forthcoming Brazil frost season and the follow on rain season, there might be some caution to sell the market too short.   Thus with the probability that the managed money funds might have also liquidated more of their now relatively modest net long position during last week’s trade, it might well assist to inspire some degree of corrective buying into the somewhat oversold New York market.

The International Coffee Organisation have reported that the world coffee exports for the month of January were 0.23% higher than the same month last year, at a total of 8.79 million bags.  While they have also reported that for the period of February 2014 to January 2015 the world coffee exports were 1.76 million bags or 1.6% higher than the previous twelve months, at a total of 112 million bags.

One has to however make note that exports do not always accurately relate to consumption, as in the meantime there has been some increase in the consumer market stock levels, with many estimating that consumer market consumption is still only approximately 102 million bags per annum.   While within the export figures, there are a percentage of coffees that also move in the direction of some producer countries, who take in price competitive imports to subsidise their domestic coffee requirements.   Coffee producing countries many now forecast to have a domestic coffee demand of approximately 47 million bags per annum.   

What is noticeable however within this relatively modest rise in official world coffee exports over the past twelve months is that there was only a marginal 0.09% increase in the exports of arabica coffees, while there was a significant 4.06% increase in the exports of the more affordable robusta coffees, which is most probably related to the combination of the fact that consumer market consumer market growth is more related to the price sensitive new markets and meanwhile, the higher percentages of robusta coffees being used within the blends within the competitive developed coffee markets.      

The arbitrage between the markets has narrowed on Friday to register this at 54.00 usc/Lb., while this equates to a relatively attractive 38.43% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,574 bags on Friday, to register these stocks at 2,271,307 bags.   There was meanwhile a smaller in volume 5,604 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,232 bags.

The commodity markets were mixed on Friday, but with the macro commodity index tending to shrug off the negative influences of the strong dollar and tending positive for the day.   In the meantime though the relatively damp growth prospects for the Chinese economy is not assisting to inspire confidence within many markets and for the present, the overall macro commodity index is relatively flat in nature.   The Oil, Cocoa, London robusta Coffee, Wheat, Corn and Soybean markets had a day of buoyancy, while the New York arabica Coffee, Gold and Platinum markets were steady, while the Sugar, Cotton, Copper and Silver markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.84% higher; to see this Index registered at 434.06.   The day starts with the U.S. Dollar once again showing its muscle and trading at 1.541 to Sterling and 1.118 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 64.00 per barrel.

The London market started the day on Friday with modest buoyancy and followed by a similarly positive stance being taken within the thinly traded New York market, with both market adding a little more weight in early afternoon trade.   However as the afternoon progressed and with the Americas upon the field of play the markets slipped back to close to par, there was however a recovery for both markets and a move back into positive territory, but while the London market held on to its gains, the New York market once again faltered near to the end of the day’s trade.   The London market continued to end the day on a positive note and with 82.6% of the gains of the day intact, while the New York market ended the day on a steady note and on par with the previous day’s close.  The close on Friday while not convincing for the New York market, might nevertheless in light of the much reduced net long figures reported within the commitment of traders report of the New York market inspire some degree of support for the New York market and a near to steady start for the London market in thin early trade, against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1871 + 37                                               MAR     136.75 + 0.20
MAY     1907 + 38                                               MAY     140.50 – 0.05
JUL      1929 + 35                                                JUL      143.50 + 0.05
SEP      1953 + 34                                               SEP      146.25 + 0.05
NOV     1970 + 34                                                DEC     150.00 unch
JAN      1983 + 34                                               MAR     153.25 unch
MAR     1998 + 29                                               MAY     154.85 + 0.15
MAY     2011 + 20                                                JUL     155.30 + 0.35
JUL      2033 + 18                                                SEP     155.40 + 0.50
SEP      2045 + 18                                                DEC    155.35 + 0.55

27th. February, 2015.
The Vietnam customs authorities and with more specific data now at hand, have revised upwards their earlier forecasted January coffee exports number by 206,667 bags, to now register January coffee exports at 2,206,667 bags.   While with the export registrations already at hand and this short February Tet New Year holiday interrupted month near to its end, they have forecasted that coffee exports for the month and made up of mostly robusta coffees, shall be 40.8% lower than the same month last year, at a total of 1,820,000 bags.

This official forecasted February export figure is in fact remarkably higher than the 1.42 million bags to 1.67 million bags that has been suggested by the private trade and industry players within Vietnam and thus one would doubt that the February exports shall prove to be in excess of the Vietnam customs authorities number.  While if one is to apply this Vietnam customs export forecast to the coffee exports reported for the previous four months, it would indicate the potential exports for the first five months of the present October 2014 to September 2015 coffee year to be 11% lower than the same period in the previous coffee year, at a total of 8,943,333 bags.  

One might comment however that over the past few months and since the reference prices of the London market started to soften, that it has caused the internal market to show a significant degree of price resistance to the exporters offering prices.  This has resulted in relatively high asking export differentials from the exporters, which has resulted in declining interest on the part of the international trade to take on trade stocks and rather related sales to the direct roaster delivery requirements, which has impacted negatively upon the volumes of demand for new crop Vietnam robusta coffees.   Thus the dip in Vietnam robusta coffee exports that does not actually relate to any shortage of available coffees has no impact upon market sentiment towards the London market.

The Brazil weather conditions over the main coffee districts have dried up a bit this week, but with the odd scattered showers having been experienced during the week, to eliminate any fears of stress for the maturing new crop cherries.    There is however good rains forecast to move in from the south for the main arabica coffee districts in South East Brazil for next week, which shall presumably put the Brazil rain factor out of the picture for some weeks and leaving only the debate over the prospects for the new crop.   

Meanwhile with the dip in the reference prices of the New York market over the past couple of weeks and with farmers already well sold for the present, they are showing price resistance and the internal market selling activity has been lacklustre over the past week.    While with having to pay up higher prices relative to the reference prices of the New York market for new stocks, the exporter’s asking price differentials for new business is slowing the pace of new business.    

This is very much the case in most arabica and robusta coffee origins, where the disbelieving farmers and internal market traders are resisting the downside influences of the softening terminal markets and are forcing exporter asking differentials higher.    However the consumer markets are presently still holding good stocks and short term forward cover and are not aggressively chasing new business and this is resulting in slow physical coffee business for the present.

The arbitrage between the markets has narrowed yesterday to register this at 55.77 usc/Lb., while this equates to a relatively attractive 39.68% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.   Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to firm.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,255 bags yesterday, to register these stocks at 2,279,881 bags.   There was meanwhile a larger in volume 6,845 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 16,628 bags.

The commodity markets with a strong U.S. dollar in play were mixed yesterday, but with the macro commodity index once again tending softer for the day.   The Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets showed buoyancy, while the Oil, Natural Gas, Coffee and Orange Juice markets having a softer day’s trade.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.27% lower; to see this Index registered at 430.44.   The day starts with the U.S. Dollar once again showing its muscle and trading at 1.544 to Sterling and 1.122 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 61.25 per barrel.

The London market started the day yesterday on a near to steady note and followed by some very modest buoyancy for the New York market, but with both markets soon losing their way in thin and lacklustre trade, to enter the afternoon on a modestly softer to steady track.     This was however not sustained and as the afternoon progressed and with the entrance upon the field of play of the Americans the New York market started to come under renewed pressure but not in the volumes of the previous days, to see the New York market lose some more weight and with the London market likewise taking a soft stance.    The London market continued to end the day on a soft note and with 70.8% of the earlier losses of the day intact, while the New York market carried on to end the day on a soft note and with 92.1% of the earlier losses of the day intact.   This soft close does little to inspire confidence and one might expect to see little better than a near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1834 – 16                                               MAR     136.55 – 3.20
MAY     1869 – 17                                               MAY     140.55 – 2.90
JUL      1894 – 19                                                JUL      143.45 – 2.90
SEP      1919 – 18                                               SEP      146.20 – 2.90
NOV     1936 – 18                                                DEC     150.00 – 2.85
JAN      1949 – 19                                               MAR     153.25 – 2.70
MAR     1969 – 18                                               MAY     154.70 – 2.30
MAY     1991 – 16                                                JUL     154.95 – 2.30
JUL      2015 – 16                                                SEP     154.90 – 2.35
SEP      2027 – 16                                                DEC    154.80 – 2.50

26th. February, 2015.
The Uganda Coffee Development Authority have reported that the countries coffee exports for the month of January were 8,263 bags or 2.59% lower than the same month last year, at a total of 310,829 bags.   The lower performance follows more restrained export volumes for the last quarter of last year and therefore the cumulative coffee exports for the first four months of the present October 2014 to September 2015 coffee year are 137,745 bags or 12.27% lower than the same period in the previous coffee year, at a total of 985,018 bags.

However in terms of value and despite the 12.27% dip in volume, the value of Uganda’s coffee exports for the first four months of the present coffee year is $ 16,188,362.00 or 14.27% higher than the same period in the previous coffee year, a total of $ 129,640,670.00.    This added value and in terms of US dollars that now have some more muscle, will do much to inspire the further growth within this already growing coffee industry that while being the second largest producer after Ethiopia in terms of exports, is tending to top the list as the largest coffee volume exporter in Africa.

This dip in export performance from Uganda has been forecasted to continue during the month of February, with some estimating that due to the negative effects of dry weather for the central and eastern districts on new crop volumes and deliveries, that there could be as much as a 30% dip for the month.     One might also presume that the negative effects of the reversal of the fortunes of the reference prices of the international coffee markets shall also have some negative effect upon coffee deliveries from Uganda, with exporters struggling to match the consumer market industry price dictates to the price demands of the internal market farmers and traders.

This factor of internal market price resistance is common to most producers and producer blocs for the present and with these demands forcing exporters of both arabica and robusta coffees to have raised their price differentials relative to the terminal market values, for new business.   This is tending to retard new business and the physical coffee trade is in many instances stalled, while relatively well stocked consumer market industry players stand back to play the waiting game, as they foresee that finally the producers shall be obliged to accept the price dictates of the fund dominated terminal markets.   Albeit that in terms of production for many producers, the present trading range of the markets is falling below cost of production, but this is a factor that has never been a concern of the chart influenced funds.

Well illustrating the negative effects upon export sales of the reversal in the fortunes of the coffee terminal markets is the report that the arabica coffee exports for the start of this year so far are approximately 50% lower than the same period last year, which is a factor that well exceeds the fact that this new arabica coffee crop might be marginally lower than the previous crops output.  The country is however forecasting a much larger new robusta crop which is presently starting to come to the market and one would think that these coffees might more easily come to the market, to see overall Indian export volumes start to pick up during the second quarter of the year.

The truckers strike in Brazil continues and with not success forthcoming from yesterday’s negotiations, but the Brazilian police did yesterday clear the truckers blockade of the routes into the leading port of Santos and for the present, there has not been any marked disruption of coffee shipments.    There are however concerns that if a solution is not soon agreed, that the truckers could escalate and broaden within the country their disruptive activities and cause hiccups to deliveries of grains, soybeans and coffee to the port.   

The arbitrage between the markets has narrowed yesterday to register this at 57.90 usc/Lb., while this equates to a relatively attractive 40.36% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,712 bags yesterday, to register these stocks at 2,277,626 bags.   There was meanwhile a larger in volume 11,815 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 23,473 bags.

The commodity markets were mixed yesterday, with the macro commodity index remaining relatively steady for the day.   The Oil, Cotton, Copper, Gold, Silver and Platinum markets showed buoyancy for the day, while the Natural Gas, Cocoa, Orange Juice, Wheat, Corn and Soybean markets had a softer day and the Coffee and Sugar markets and with Sugar hitting five year lows, experienced a significantly softer days trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.05% higher; to see this Index registered at 431.60.   The day starts with the U.S. Dollar marginally softer and trading at 1.554 to Sterling and 1.137 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 61.75 per barrel.

The London market started the day yesterday on a steady note and followed by some further corrective buoyancy for the New York market, which seemingly inspired some buoyancy for the London market and with both markets entering the afternoon on a positive track, with seemingly support coming from consumer market industry buying.   However as the afternoon progressed the New York market started to come under pressure and slipped back into positive territory, while the London market shed a little weight but retained its buoyancy for a little while.   The New York market started to trigger sell stops and extended its losses, with the London market following suit and finally moving back to join New York in in negative territory.  The London market continued to end the day on a very soft note and with 84.2% of the earlier losses of the day intact, while the New York market registered new one year lows and ended the day of a very soft note and with 84.5% of the earlier losses of the day intact.   This soft close and with selling pressure dominated by the fund and speculative sectors of the market rather than the producers and with no indication as to when the oversold funds might show exhaustion does little to inspire confidence, but one might expect to see a degree of opportunist roaster price fixation buying support coming in to provide a degree of buoyancy for the light early trade today, against the soft prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1850 – 34                                               MAR     139.75 – 5.60
MAY     1886 – 32                                               MAY     143.45 – 5.45
JUL      1913 – 32                                                JUL      146.35 – 5.45
SEP      1937 – 31                                               SEP      149.10 – 5.40
NOV     1954 – 30                                                DEC     152.85 – 5.25
JAN      1968 – 29                                               MAR     155.95 – 4.90
MAR     1987 – 29                                               MAY     157.00 – 4.70
MAY     2007 – 32                                                JUL      157.25 – 4.70
JUL      2031 – 32                                                SEP      157.25 – 4.50
SEP      2043 – 32                                                DEC     157.30 – 4.45

25th. February, 2015.
The internal market in Vietnam has yet to recover from last week’s Tet New Year holiday break, during which time the reference prices of the London robusta market impacted negatively upon internal market prices for the large stocks of new crop coffees.   This has resulted in relatively strong internal market price resistance, which is dampening selling activity within the country and likewise in terms of their influence upon asking differentials for new business on the part of the exporters, in slow sales for the beginning of this week.

The Brazil Coffee Industry Association has indicated that domestic coffee consumption dipped over the past year to 20.33 million bags, but that this year should see consumption recover to 21 million bags.   The steady nature of this the second largest individual country coffee market following the U.S.A. seemingly indicates that the Brazil domestic coffee market that has been steadily growing over the past fifteen years, is now hitting maturity.   Thus along with the growing market share of portion control single serve pods and capsules within the Brazil market, one would imagine that there is limited growth potential within this market over the coming years.

Thus in terms of the market share that Brazil holds within the consumer markets that accounts for approximately 33 million bags per annum, one would foresee demand for Brazil coffees to be approximately 54 million bags per annum.   This demand in terms of the previous 2014 crop of approximately 48 million bags and a follow on crop this year that many forecast to be around 49 million bags, shall potentially be supplemented by approximately 10 million to 11 million bags of carryover stocks of mostly arabica coffees, which were at hand at the start of the 2014 crop.

However with these Brazil coffee stocks being steadily liquidated, the country heads towards a somewhat critical situation in terms of the follow on 2016 crop as by then the carryover stocks shall be potentially minimal and unless this crop proves to be a surplus one, Brazil coffee supply shall most certainly tighten for the 2016/2017 coffee year.   Thus the new Brazil spring and summer rain season for the last quarter of this year and the first quarter of next year shall prove to be a matter of some considerable concern, as it has to be a good rain season if there is to be bumper new coffee crop in 2016.   With world weather conditions these days very erratic, this new rain season is not guaranteed and there is a potential for much speculation and volatility for the presently bearish coffee markets, during the last quarter of this year.

There are concerns in Brazil over the prevailing trucker’s strike that is demonstrating against what they see to be high fuel prices, which is disrupting deliveries of commodities to the port of Santos.  This strike if it continues might cause some hiccups for coffee shipments for the short term, but it has not so far had a noticeable negative influence upon coffee shipments.   While with the government in negotiations with the truckers, the strike is not having any real influence upon sentiment within the coffee markets.

There is little in the way of fundamental news forthcoming from the main producer countries and producer blocs, with such news that is in play being generally positive for longer term coffee supply and adding little support for the markets.   But there is in terms of consumer markets, many new developments within the dominant European market.

Mondelez International have announced that Lavazza who had been negotiating a price to take over the L’Or and Grand Mere coffee brands, now have exclusivity to rather take over the more substantial Carte Noire coffee brand.   The sale of the Carte Noire brand designed to satisfy the European Competitions Commission, in the bid for Mondelez International and D. E. Master Blenders 1753 to merge their dominant coffee companies.

This merger is seen to be something of the threat to the dominant market share of Nestle, who presently dominate the rapidly growing single serve coffee market share in Europe.   However it is not the only threat as the Nespresso patents have been overturned within many European countries and with the German courts this week in a case between the Ethical Coffee Company and Nespresso, having declared the Nespresso patent null and void.   Thus further opening the European markets to a price war in terms of coffee capsule sales that are expected to register a further 15% growth in market share, during this year.  

The arbitrage between the markets has broadened yesterday to register this at 61.90 usc/Lb., while this equates to a relatively attractive 41.57% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,671 bags yesterday, to register these stocks at 2,270,914 bags.   There was meanwhile a larger in volume 4,242 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 35,288 bags.

The commodity markets tended to steady yesterday and with the macro commodity index taking a sideways track for the day, following the soft start to the week.  The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Wheat, Corn and Soybean markets had a day of buoyancy, while the London robusta Coffee, Orange Juice, Gold, Silver and Platinum markets had a softer days trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.01% lower; to see this Index registered at 431.39.   The day starts with the U.S. Dollar marginally softer and trading at 1.547 to Sterling and 1.135 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 59.15 per barrel.

The London started the day yesterday on a modestly softer note, while the New York market started to show some corrective buoyancy and with both markets taking this mixed track through into the afternoon’s continued thin and lacklustre trade.    There was little change in direction through the day and the London market continued to shed more weight to end the day on a soft note and with 96.8% of the earlier losses of the day intact, while the New York market ended the day with buoyancy and with 44.8% of the earlier gains of the day intact.   This mixed close provides little in the way of direction and one might expect a cautiously steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1884 – 31                                               MAR     144.35 + 0.90
MAY     1918 – 30                                               MAY     148.90 + 0.65
JUL      1945 – 29                                                JUL      151.80 + 0.70
SEP      1968 – 28                                               SEP      154.50 + 0.70
NOV     1984 – 28                                                DEC     158.10 + 0.65
JAN      1997 – 27                                               MAR     160.85 + 0.75
MAR     2016 – 28                                               MAY     161.70 + 0.75
MAY     2039 – 28                                                JUL     161.95 + 0.75
JUL      2063 – 27                                                SEP     161.75 + 1.00
SEP      2075 – 27                                                DEC    161.75 + 1.10

24th. February, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market increase their net long position within this market by 36.79% in the week of trade leading up to Tuesday 17th. February, to see this long position turned into a net long that was registered at 21,763 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 3,627,167 bags has most likely been reduced during the period of overall negative trade that has since followed.

The Brazil weather factor has fallen for the present by the wayside, with fair to good rains having been reported for most of the main coffee districts within the country.   While in the meantime the more volatile and active New York arabica coffee market is under pressure from the combination of a lack of positive fundamental news, the negative influences of a depressed macro commodity index, the negative nature of the charts and the threat of significant volumes of price fixation selling to come from the building stocks of unsold new crop coffee stocks in Central America.   Thus with good volumes of consumer market coffee stocks at hand, these factors are presently countering the prospects for a deficit coffee supply due for this new coffee year.

There is however no certainty over longer term weather prospects for Brazil and with the less threatening Brazil frost season aside, one has to look to the presently erratic and often unstable world weather conditions and in this aspect, the next spring and summer rain season in Brazil that shall determine the size of the follow on 2016 new crop.   This crop with last years and this year’s deficit Brazil crops influencing a steady liquidation of the carryover coffee stocks that were inherited last year, shall dictate that the 2016 crop has to be a bumper one, if Brazil is not to experience tightening longer term supply.   

Thus the question is will the funds throw longer term uncertainty and caution to the wind and pressure the markets lower and to unprofitable levels for most producers to look to buy back profits from these fundamentally unrealistic lows, or shall they with the markets looking somewhat over sold soon step in to reverse the trend and profit from a higher value base.   Presently though and with nothing in the way of supportive fundamental news coming forth from any of the main producer blocs and including Brazil market sentiment is very bearish, but it is often the case that when everyone is bearish there is an unexpected corrective move on the horizon and it is not impossible to soon see a turn within the New York market and one that would likewise inspire the London market into a higher trading range.    

The European Competitions Commission has agreed to extend the deadline on the review on the proposed merger between Mondelez International and D. E. Master Blenders 1753 from the 13th. May to the 1st. June and thus, provided more time for the companies to provide supporting input for the merger.   This merger which most still believe shall take place, would result in significantly stronger competition for Nestle within the single serve coffee market.

However it would seem that the initial proposal by Mondelez to sell off the smaller L’Or and Grand Mere brands to reduce dominance in mainly the French market has not been acceptable to the European antitrust regulators, which has now seen Mondelez suggest to sell off the larger Carte Noire brand.   Thus adding to much speculation as to who it might be aside from Lavazza who have been in negotiations and attempting to raise cash to take over the L’Or and Grand Mere brands might be entering the field of play and have the financial resources in terms of the Carte Noire brand, to relieve the proposed merged company of its threat of dominance within some of the major European markets.

The arbitrage between the markets has broadened on Friday to register this at 59.89 usc/Lb., while this equates to a relatively attractive 40.40% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 6,779 bags yesterday, to register these stocks at 2,267,243 bags.   There was meanwhile a larger in volume 8,973 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,530 bags.

The Certified robusta coffee stocks held against the London exchange were seen to increase by 70,000 bags or 2.83% over the two weeks of trade leading up to Monday 16th. February, to see these stocks registered at 2,540,667 bags on the day.   These stock unlikely to seem much growth on the short term, due to the relatively high asking differentials for new crop robusta coffee sales out of Vietnam, which continue to inflate their prices relative to the price dictates of the London market.   

The commodity markets took a soft track yesterday, with most markets contributing to the negative nature of the macro commodity index for the day.   The Cocoa market nevertheless showed buoyancy, while the Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day and the Oil, Natural Gas, Sugar, Coffee and Orange Juice markets had a significantly softer days trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.78% lower; to see this Index registered at 431.43.   The day starts with the U.S. Dollar maintaining its muscle and trading at 1.543 to Sterling and 1.132 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 59.00 per barrel.

The London started the day yesterday on a modestly softer note, while the New York market shrugged off a couple of early minutes of selling pressure, to show early buoyancy and with both markets taking this mixed track through into thin afternoon trade.   As the afternoon progressed however and with trade remaining thin, the New York market with the negative influences of the soft macro commodity index playing its part started to lose its way, to dip back through par and join the London market in lacklustre negative territory and despite trading relatively thin trading volumes, to further extend the losses as the afternoon progressed.   The London market continued to end the day on a soft note and with 72.2% of the earlier losses of the day intact, while the New York market hit new one year lows and ended the day on a very soft note and with 93% of the losses of the day intact.   This soft close and with no supportive fundamental news coming to the markets does little to inspire confidence which is unlikely to inspire little better than a near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1915 – 27                                               MAR     144.45 – 4.20
MAY     1948 – 26                                               MAY     148.25 – 4.65
JUL      1974 – 27                                                JUL      151.10 – 4.65
SEP      1996 – 26                                               SEP      153.80 – 4.60
NOV     2012 – 23                                                DEC     157.45 – 4.55
JAN      2024 – 23                                                MAR    160.10 – 4.55
MAR     2044 – 19                                                MAY    160.95 – 4.55
MAY     2067 – 17                                                 JUL     161.20 – 4.50
JUL      2090 – 15                                                 SEP     160.75 – 4.55
SEP      2102 – 15                                                 DEC    160.65 – 4.40

23rd. February, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 15.44% in the week of trade leading up to Tuesday 17th. February;  to register a net long position of 14,080 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 9.79%, to register a net long on the day of 25,548 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 17.12%, to register a net long of 8,847 lots on the day.   This net long position that is the equivalent of 2,508,085 bags has most likely been further decreased over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds.

The big question has to be if the funds shall have the confidence to continue to follow the charts and further sell and liquidate their declining net longs within the New York arabica coffee market, or shall there be a degree of cautious corrective activity due for this week’s trade.   This is very much unclear for the present as the logic of fundamental news does not always play its part and with the funds holding the financial muscle to make a market and profit out of the similarly dictated reversals, one can only take a wait and see stance towards the markets.

The farmers and internal market traders within the Central American producers and with building levels of new crop coffee stocks at hand are apparently still in belief of the future support from a relatively modest new Brazil crop and continue to show varying levels of price resistance towards the dictates of the softer reference prices of the New York market, which continued to retard exporter selling aggression from the region last week.   As is there is likewise a degree of internal market price resistance developing within Colombia, but not sufficient to stall the markets and there remains slow and steady consumer market fill in new industry business being concluded and with roaster buying coming in under the New York market to counter the negative track that the market took during the afternoons trade on Friday.

The Vietnamese are starting to return to work today following a week of Tet New Year celebrations, but with little in the way of good news for the coffee sector of the country, as they see the results of last week’s softening of confidence in the coffee markets.  While the Brazilians who had returned to work on Thursday post the annual Carnival celebrations, had already had to absorb the disappointing news of a softer post-holiday market.   One would imagine that with the two largest producers who account for over 50% of world coffee production having returned to the field of play that this would be more negative than positive for trade, but with the Brazilians already well sold and the Vietnamese very experienced at playing the market, that this shall not be the case and that there shall not be any panic selling aggression due for the markets this week.  

The arbitrage between the markets has broadened on Friday to register this at 63.36 usc/Lb., while this equates to a relatively attractive 41.44% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 11,757 bags on Friday, to register these stocks at 2,260,464 bags.   There was meanwhile a larger in volume 12,623 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,503 bags.

The commodity markets were mixed on Friday, but with the overall macro commodity index taking a softer track for the day.   The Brent Oil, Natural Gas, Cocoa and New York arabica Coffee had a day of buoyancy, while the U.S. Oil, Sugar, London robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.42% lower; to see this Index registered at 434.81.   The day starts with the U.S. Dollar maintaining its muscle and trading at 1.538 to Sterling and 1.138 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 60.55 per barrel.

The London started the day on Friday under some modest negative pressure in thin trade, while the New York market attracted early support in likewise thin trade to post some modest buoyancy and with both markets taking this mixed track into the afternoon’s trade.   The New York market did however come under some degree of negative pressure as the afternoon progressed to dip back and join the softer London market in negative territory but with the losses limited and bouts of corrective support dragging the market back towards par.    The London market continued on its softer track to end the day on a soft note and with 88.9% of the earlier losses of the day intact, while the New York market managed to end the day on a hesitantly positive note, but with only 10.7% of the earlier in the day’s gains intact.   This is a rather unconvincing close and one might think that it shall result in a cautious and hesitant slow start for early trade today for both markets, as players look to see where direction might be against the mixed close on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1942 – 15                                               MAR     148.65 – 0.55
MAY     1974 – 16                                               MAY     152.90 + 0.25
JUL      2001 – 17                                                JUL      155.75 + 0.30
SEP      2022 – 17                                                SEP     158.40 + 0.30
NOV     2035 – 18                                                 DEC    162.00 + 0.30
JAN      2047 – 19                                                MAR    164.65 + 0.35
MAR     2063 – 19                                                MAY     165.50 + 0.40
MAY     2084 – 19                                                 JUL     165.70 + 0.45
JUL      2105 – 19                                                 SEP     165.30 + 0.35
SEP      2117 – 19                                                 DEC    165.05 + 0.35

20th. February, 2015.
The National Export Centre in Nicaragua have reported that the countries coffee exports for the month of January were 774 bags or 0.86% higher than the same month last year, at a total of 90,324 bags.   This export performance has contributed to the countries cumulative exports for the first four months of the present October 2014 to September 2015 coffee year to be 79,423 bags or 42% higher than the same period in the previous coffee year, at a total of 268,534 bags.

This latest report and with the new crop harvest close to completion was accompanied by a positive new crop forecast, which the National Export Centre foresees to be a 7% larger new crop, which they expect to total 1.61 million bags.  This number is however somewhat conservative, as there are qualified trade and industry forecasts who have indicated a new crop for Nicaragua to be closer to 1.8 million bags.    Specifics aside however, there is no doubt that the combined new crops from the producer bloc of Mexico and Central America shall this year be approximately 1 million bags larger than the previous crop, with much of these new crops still to be sold and to a degree, these potential sales are dampening speculative spirits for the related New York market against which they shall trigger price fixation hedge selling.

Added to this rising new crop fine washed arabica coffee supply from Central is the rising coffee supply from neighbouring Colombia where in an interview yesterday, the National Coffee Federation of Colombia have forecasted that following the October 2013 to September 2014 coffee crop of 12,128,400 bags, the forecast that the coffee production for the present October 2014 to September 2015 coffee year shall rise to at least 12.5 million bags and possibly even exceed 13 million bags.   This ongoing with positive output from Colombia is expected to be followed by a much improved new crop from Peru which starts being harvested in April, which many foresee shall increase by approximately 500,000 bags to total 3.9 million bags.

The prospects of rising Central and South America coffee supply for the present coffee year has not however resulted in any degree of selling aggression from Central America and Colombia and rather with relatively strong internal market price resistance being shown to the negative dictates of the softening of the reference prices of the New York market, it is forcing exporters to have to continue to demand relatively positive and presently increasing asking differentials for new business.   These differentials well above the value of tendering and delivering surplus coffees to the New York market and likewise values that do not inspire consumer market traders to carry high differential trade stocks, which sees the certified coffee stocks of the New York market remaining modest and little potential for short term growth of fine washed arabica coffee stocks within the consumer markets.

The prominent coffee trade house ED&F Man and Volcafe coffee trade house forecasted that the new 2015 crop shall come in at 49.5 million bags and therefore 1 to 2 million bags higher than many other earlier forecasts and that despite this still relatively modest number, it shall contribute along with a 3.2 million bags larger end of this year new Vietnam crop of 30.6 million bags, to global coffee supply of 151.1 million bags for the next October 2015 to September 2016 coffee year.   The report does however indicate that global coffee demand for the next coffee year shall be 152.5 million bags and that despite this improved supply, that the next coffee year shall nevertheless experience a 1.4 million bags deficit supply.   Thus why the longer term coffee supply forecast might be seen to be neutral and perhaps even mildly supportive for the coffee markets, the shorter term assessment of the pending new crop in Brazil shall be much larger than many other forecasts have indicated, tended to be bearish for late in the day sentiment yesterday.

The arbitrage between the markets has narrowed yesterday to register this at 62.39 usc/Lb., while this equates to a relatively attractive 40.87% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 730 bags yesterday, to register these stocks at 2,248,707 bags.   There was meanwhile a larger in volume 1,835 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,126 bags.

The commodity markets were mixed yesterday, to see the overall macro commodity index taking a sideways track for the day.  The Natural Gas, Cotton, Copper, Wheat, Soybean, Gold and Silver markets showed buoyancy for the day, while the Oil, Sugar, London robusta Coffee, Cocoa, Orange Juice, Corn and Platinum markets had a softer days trade and the New York arabica Coffee market took another sharp late in the day beating.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.02% lower; to see this Index registered at 436.63.   The day starts with the U.S. Dollar maintain its muscle and trading at 1.542 to Sterling and 1.136 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 60.05 per barrel.

The London and New York markets both started the day yesterday with the London market steady and the New York market experiencing a degree of positive buoyancy, but while the New York market took a steady track into the afternoon’s trade, the London market had turned modestly softer.   As the afternoon progressed however the New York market started to come under pressure and moved back to join the London market in negative territory and finally with sell stops being triggered along with some post-holiday catch up price fixation selling from Brazil, the New York market overtook the London market and moved significantly lower.  The London market continued to end the day on a soft note and with 76% of the earlier losses of the day intact, while the New York market ended the day setting new one year lows and with 95.5% of the earlier losses of the day intact.  This was a very dismal performance for the markets and especially so with the more volatile New York market ending at the lows of the day, but one might think that there shall be a degree of exhaustion in play and that this may inspire a steady rather than soft start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1957 – 18                                               MAR     149.20 – 3.60
MAY     1990 – 19                                               MAY     152.65 – 4.30
JUL      2018 – 18                                                JUL      155.45 – 4.25
SEP      2039 – 18                                                SEP     158.10 – 4.20
NOV     2053 – 20                                                DEC     161.70 – 4.15
JAN      2066 – 21                                               MAR     164.30 – 3.90
MAR     2082 – 21                                               MAY     165.10 – 3.90
MAY     2103 – 21                                                JUL     165.25 – 4.05
JUL      2124 – 21                                                SEP     164.95 – 4.25
SEP      2136 – 21                                                DEC    164.70 – 4.30

19th. February, 2015.
The Ministry of Agriculture in El Salvador have reported that with the new crop harvest in progress the coffees produced so far are already 73,444 bags or 13.25% more than the previous full harvest, at a total of 627,747 bags.   This is a rather exact figure in terms of calculating what might have been processed in a good number of mills and with the Ministry of Agriculture forecasting that by the end of the harvest the country shall produce 690,000 bags as against most internal private trade and industry forecasts for something in the order of 900,000 bags, one might presume that the new crop harvest so far, shall have exceeded this relatively conservative figure that the ministry has reported.

The Brazil carnival is over and has been a relatively wet one for the south east of Brazil, but not sufficient to dampen celebratory spirits and the coffee industry players shall return to their offices today to view the negative track that the coffee markets have taken this week.   The rains have meanwhile been beneficial for the prospects for the developing new crop, but shall not change the scenario that this new crop shall be another relatively modest one and bring forth a potential 5 million to 6 million bags deficit crop.   Fortunately a situation that shall be adequately covered by the prospects for carryover stocks of a similar number, which shall assist Brazil to maintain a steady supply to the consumer markets through to next year’s new crop.

The concern is though and with the issues of the June and July frost season aside and now largely ignored since the last frost was twenty one years ago, is what shall be the prospects for the next 2016 Brazil crop.  If one is to presume that this year shall see normal weather conditions and with the spring and summer rain season coming into play in late September and to carry on through for the following six to seven months, one might expect a good recovery and a surplus new crop.   However should there be any hiccups for this rain season and with reserve stocks much depleted and due to be liquidated my mid next year, one might expect to see a sharp speculative positive rally for the coffee markets and the threat of this one would think shall prove to be a limiting factor for the bears who presently dominate direction within the volatile New York market.

This brings to question where the bottom of the present sell off shall be, as while the charts and the technical trade are directing the market lower, there has to be some degree of fundamental reason to be cautious about selling too short into the coffee markets ahead of a not impossible to encounter frost season and an uncertain in terms of the present erratic world weather conditions, new rain season.   Thus one might think that the negative charts aside, there is the possibility for the more cautious of the speculative short sold funds and traders to soon look to rising levels of the somewhat retarded new crop price fixation selling activity due from the larger new crop Central American producers, to buy into the New York and take some profits out of the recent liquidation.   This would make one think that the further downside of the market might be limited and that the New York market that hit one year lows yesterday, might well be close to its bottom.

The Coffee Board in the Philippines along with the Agricultural Ministry are looking to ways to inspire a recovery for the countries coffee production, which has fallen do relatively dismal levels for this once coffee exporter, that now imports 80% of its rising domestic market coffee requirements.  There have for many years been a good number of both state and private roasting industry support programs looking to promote coffee farming within this country that has the natural conditions conducive to large scale coffee farming, but so far these have not had any market effect.  There is however some more aggression on the part of the authorities in the Philippines developing and with not only farm support that agronomy extension services being provided for the farmers, but also some special low interest finance being provided.  Thus with the example of the successes of neighbouring Vietnam who are a leading supplier to the Philippine roasting companies, one would think that there is a good chance for the country to finally start on its track to one again become a significant coffee producer, albeit that it is most probably going to be more than a decade before the country might once again be a coffee exporter.

The arbitrage between the markets has narrowed yesterday to register this at 65.82 usc/Lb., while this equates to a relatively attractive 41.94% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 25 bags yesterday, to register these stocks at 2,247,952 bags.   There was meanwhile a larger in volume 2,966 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,291 bags.

The commodity markets were generally soft yesterday, with U.S. dollar showing some buoyancy and the macro commodity index tending softer for the day.   The Natural Gas, Cocoa, Cotton and Copper markets had a day of buoyancy, while the Oil, Sugar, Coffee, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.46% lower; to see this Index registered at 436.71.   The day starts with the U.S. Dollar marginally easier and trading at 1.545 to Sterling and 1.141 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 58.55 per barrel.

The London and New York markets both started the day yesterday showing buoyancy and entered the afternoon on a positive track, but as the afternoon progressed the New York market started to come under renewed selling pressure and with the London market following suit, to see both markets once more in negative territory.   This was followed by a brief period of recovery for the New York market and followed by the London market but it was short lived and both markets moved back into negative territory and with relatively large volumes of trade, accompanying the selling activity.   The London market did however limit its losses and ended the day on a soft note but having recovered 73.8% of the earlier losses of the day, while the New York market ended the day on a soft note and with 73.1% of the earlier losses of the day intact.   This soft close does little to inspire confidence, but perhaps with thoughts of the possibility of a nearby correction on the horizon, there might be some buoyancy due for early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1975 – 18                                               MAR     152.80 – 2.85
MAY     2009 – 11                                               MAY     156.95 – 1.90
JUL      2036 – 7                                                  JUL      159.70 – 1.85
SEP      2057 – 7                                                 SEP      162.30 – 1.80
NOV     2073 – 5                                                  DEC     165.85 – 1.70
JAN      2087 – 2                                                 MAR     168.20 – 1.50
MAR     2103 – 2                                                 MAY     169.00 – 1.35
MAY     2124 – 2                                                  JUL     169.30 – 1.35
JUL      2145 – 2                                                  SEP     169.20 – 1.50
SEP      2157 – 2                                                  DEC    169.00 – 1.65

18th. February, 2015.
The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 216,964 bags or 3.93% during the month of January, to register these stocks at 5,308,000 bags at the end of the month.   These stocks do not of course include the in transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is fed by these stocks of 490,000 bags per week, would conservatively have been at least 1 million bags.

Therefore if one is to consider the additional unreported stocks and look to end August stocks in North America of at the very least 6,308,000 bags, it would have equated to at least a very safe 12.9 weeks of roasting activity and still a safe reserve, ahead of the pending delivery of increasing volumes of new crop coffees from Mexico, Central America, Colombia and Vietnam.  These new crop coffees and however not expected to surge in supply, as the North American roasters alike the consumer industries worldwide, remain slow and steady buyers against what many predict to be a market that should the rains come in Brazil next week, might still lose some more weight.

The dip in these stocks during the month of January in North America which are stocks that are nevertheless higher than at the same time last year are no reflection of any shortage of coffee supply, but rather are related to the prevailing price resistance that is being shown within most producer countries, which is inflating export differentials and is retarding the growth of the relatively expensive trade stocks.   This is likewise transferring to a degree the weight of new crop stock holdings to the producer markets rather than the consumer markets and thus, is retarding the delivery of new crop coffees into consumer market trade stocks and the certified stocks of the New York and London markets.   But there is no doubt in the meantime, that there is more than sufficient short to medium term coffee supply on the horizon, for the consumer market industries.

Meanwhile in terms of consumer market demand the combined West and East European market consumption that accounts for close to 50% of world consumer market demand is looking flat to marginally negative, with the surging growth of the more parsimonious single serve pod and capsule sector of the market impacting upon consumption per cup, while the economic issues within the Mediterranean Rim countries and Eastern Europe are also having some impact upon consumption.   This is apparently not the case within the North American markets that account for approximately 26% of consumer market demand, where consumption growth is steady to buoyant and the economic circumstances unlike in Europe are more positive for consumption growth.  But alike the leading European market this market is well developed and somewhat saturated and therefore, limits the growth potential for the market.

There is however a steady growth in consumption within the Asian markets and including the Asian producer countries, which is perhaps at a guess adding approximately 2 million to 2.5 million bags in consumption per annum, but this is perhaps partially countered by the dip in overall European market volume rather than cup demand.   Thus while the deficit Brazil crop factor last year and potentially so again for this year is having some negative effect upon longer term world coffee stocks, they remain more than sufficient to satisfy demand through to mid next year and the next 2016 Brazil crop.   This follow on crop becoming the critical factor and the big question, which shall inspire a keen eye being kept upon the weather conditions in Brazil for the last quarter of this year, that shall dictate the countries next crop potential.    

The arbitrage between the markets has narrowed yesterday to register this at 67.22 usc/Lb., while this equates to a relatively attractive 42.32% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 9,097 bags yesterday, to register these stocks at 2,247,977 bags.   There was meanwhile a similar in volume 9,051 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 62,257 bags.

The commodity markets were mixed yesterday, but with the macro commodity index nevertheless tending negative for the day.   The Oil, Sugar, Cocoa, Cotton, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy, while the Natural Gas, Coffee, Copper, Gold, Silver and Platinum markets tended softer for the day and particularly so the New York arabica coffee market that suffered from a sharp negative correction.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.50% lower; to see this Index registered at 438.72.   The day starts with the U.S. Dollar marginally easier and trading at 1.536 to Sterling and 1.141 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 62.00 per barrel.

The London and New York markets post the long weekend for New York and the buoyancy shown the previous day from a solo trading London market, opened yesterday with both markets experiencing buoyancy.   The markets maintained their positive stance into the afternoon trade and with the London market ticking a two month high, but lost their way as the afternoon progressed and with sell stops being triggered to accentuate the losses, both markets suffered from a relative sharp reversal of fortunes.    The chart based sell stops within the New York market providing the most aggressive negative pressure factor, which countered any supportive advantageous buying that came into play within this more volatile of the markets.   The London market continued to end the day on a soft note and with 79.3% of the earlier losses of the day intact, while the New York market ended the day on a very soft note and with 86% of the earlier losses of the day intact.   The sell off yesterday is potentially negative for both the charts and sentiment but one might expect to see some degree of caution and even a degree of buoyancy for early thin trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1993 – 48                                               MAR     155.65 – 7.55
MAY     2020 – 46                                               MAY     158.85 – 7.65
JUL      2043 – 42                                                JUL      161.55 – 7.60
SEP      2064 – 40                                                SEP     164.10 – 7.45
NOV     2078 – 38                                                 DEC    167.55 – 7.20
JAN      2089 – 38                                                MAR    169.70 – 7.00
MAR     2105 – 38                                                MAY    170.35 – 6.95
MAY     2126 – 38                                                 JUL     170.65 – 7.00
JUL      2147 – 38                                                 SEP     170.70 – 7.10
SEP      2159 – 38                                                 DEC    170.65 – 7.10

17th. February, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market increase their net long position within this market by 16.35% in the week of trade leading up to Tuesday 10th. February, to see this long position turned into a net long that was registered at 15,910 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,651,667 bags has most likely been further increased during the period of overall positive trade that has since followed.

This positive move within the London market over the past two weeks has been assisted by the relatively slow selling activity from Vietnam prior to this week’s Year of the Goat Tet New Year Holiday (Tết Nguyên Đán), which is related to the price resistance within the Vietnam internal market.   With further support coming forth from the speculative sector within the market, in reaction to the dry conditions that were experienced within the conilon robusta areas within the Espirito Santo district in Brazil, which has fueled speculation that the new Brazil conilon robusta crop might be up to 2 million bags lower than earlier forecasted.

However with the relative value of the London market having been further buoyed in solo trade yesterday and if this recovery is seen to hold or perhaps even extended post the Vietnam holiday season, there is the possibility that it might well inspire some degree of catch up selling aggression within the internal market in Vietnam next week.  This would if it happens bring into play increased volumes of exporter price fixation activity for the market, to impact negatively upon its fortunes.  It is though still a few days to the fore and one might still see some speculative profit taking coming into play within the London market and thus, it is difficult to forecast where it might be by Monday next week.

The National Coffee Council of El Salvador have reported that the countries coffee exports for the month of December were 16,699 bags or 70.1% higher than the same month in the previous year, at a total of 40,521 bags.  This they report has been followed by the countries coffee exports for the month of January having been 21,979 bags or 56.42% higher than the same month last year, at a total of 60,936 bags.

This much improved performance over the past two months has however been countered by a minimal export performance over October and November last year and therefore, El Salvador’s cumulative exports for the first four months of the present October 2014 to September 2015 coffee year are still 12,568 bags or 10.46% lower than the same period in the previous coffee year, at a total of 107,544 bags.   However with the new crop that many forecast to be in excess of 30% higher than the past crop now peaking, one might expect that export volumes shall steadily improve over the coming months and El Salvador to start reporting much improved export volumes for this present coffee year.

This improved export performance from El Salvador is expected to be mirrored albeit not the same degree by their neighbors in Central America, to see this leading fine coffee producer bloc add in excess of 1 million bags of fine washed arabica coffees to coffee supply for this new coffee year.    With this increase to be further inflated by increased supply from Colombia and followed during the last quarter of the present coffee year, by the impact of a larger new crop from Peru and thus for the present there are no concerns within the consumer bloc in terms of the supply of the better quality coffees.

But so far and with the majority of the world’s producers taking a wait and see stance towards the prospects for the new Brazil crop and therefore its impact to overall coffee supply, there remains price resistance within the internal markets of most producers that has resulted in relatively positive export price differentials for the first month and a half of this year.   These differentials in terms of the relatively well supplied washed arabica coffees might however start to come under some pressure within Central America in the coming months, as the new crop coffee stocks start to build and the farmers and internal market traders start to compete to liquidate some of their new crop coffee stocks.

The arbitrage between the markets has narrowed yesterday to register this at 72.79 usc/Lb., while this equates to a relatively attractive 43.72% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,000 bags yesterday, to register these stocks at 2,256,074 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 71,308 bags.

The commodity markets with the U.S.A. markets closed for the Presidents holiday yesterday, not able to forward an overall perspective of direction for the day, but it was a day of renewed muscle for the U.S. dollar that surprisingly did not impact negatively upon the active markets outside of the U.S.A.  The Brent Oil, Natural Gas, Sugar, London robusta Coffee, Cocoa, Copper and Gold Markets had a day of buoyancy and the Silver market was steady, while the Platinum market had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets with many markets off the field of play unchanged from Fridays 1.17% higher; to see this Index registered at 440.92.   The day starts with the U.S. Dollar steady and trading at 1.538 to Sterling and 1.136 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 61.80 per barrel.

The London market with the New York market closed for the holidays started the day yesterday with a degree of buoyancy and set a positive platform for further gains, in the afternoon’s trade.    The market continued to end the day on a very positive note and with 90.9% of the gains of the day intact, which is perhaps conducive to a follow through near to steady start for the London market and perhaps a degree of buoyancy for the New York market for early trade today, against Friday’s close in New York and yesterdays close in London, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     2041 + 32                                               MAR     163.20 – 1.35
MAY     2066 + 30                                               MAY     166.50 – 0.95
JUL      2085 + 28                                                JUL      169.15 – 0.90
SEP      2104 + 28                                               SEP      171.55 – 0.90
NOV     2116 + 28                                                DEC     174.75 – 0.95
JAN      2127 + 28                                               MAR     176.70 – 0.90
MAR     2143 + 24                                               MAY     177.30 – 0.95
MAY     2164 + 24                                                JUL     177.65 – 0.85
JUL      2185 + 24                                                SEP     177.80 – 0.95
SEP      2197 + 24                                                DEC    177.75 – 0.95

16th. February, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net long position within this market by 4.81% in the week of trade leading up to Tuesday 10th. February;  to register a net long position of 16,651 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market increased their net long position within the market by 9.85%, to register a net long on the day of 28,320 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market increased their net long position within the market by 4.81%, to register a net long of 10,675 lots on the day.   This net long position that is the equivalent of 3,026,315 bags has most likely been marginally increased over the period of mixed but overall positive trade that has since followed and likewise, the net long position of the Managed Money Funds.

The Brazilian exporter Terra Forte announced on Friday that following farm visits and evaluation of the effects of the three to four weeks of dry weather that had been experienced over the month of January, that they forecast that the forthcoming new Brazil crop shall be 580,000 bags or 1.24% higher than the previous 2014 crop, at a total of 47.28 million bags.    This figure compiled from their forecast that the new arabica coffee crop shall be 2.75 million bags or 9.39% higher at 32.05 million bags, while the new conilon robusta crop shall be 2.2 million bags or 12.64% lower than the previous crop at 15.2 million bags.

This forecast is perhaps very much in line with many other early private trade and industry forecasts, albeit that they are more positive than many in terms of the potential for the new arabica coffee crop, while being a bit more conservative than many in terms of the new conilon robusta crop.   But one might say that in terms of their assessment of the previous 2014 crop having been at least 1 million bags lower than many other previous crop reports and up to 3 million bags lower than a number of other private trade and industry forecasts, that one might adjudge the Terra Forte forecast to be leaning towards the conservative side of forecasts.   Therefore to firstly appropriate some degree of reality to their forecast, this might even indicate a slightly higher potential for the size of the new crop.

The general assessment of carryover stocks into the new 2014 crop for Brazil was a number of approximately 12 million bags of mostly arabica coffees, which would see in terms of the combination of export and domestic market demand approximately 6 million bags having been absorbed by the start of this year’s new crop and therefore, a potential carry over stock of 6 million bags into the new 2015 crop.   Thus if one is to look to this year’s new crop at being around 47 million to 48 million bags and an export and domestic market demand of approximately 54 million bags, only negligible carryover stocks into the next 2016 crop that shall need to well exceed 56 million bags if there is not to be a severe tightening up of internal market coffee supply to the countries exporters.

Thus there shall not only be concentration upon the short term weather reports from Brazil towards the further development of this year’s new crop, but also keen interest on the prospects for the new spring and summer rainfall reports from Brazil over the last quarter of the year and into the new year and one can foresee speculative volatility due for the markets due for the rest of the year, while one might think that this uncertainty shall continue to provide for a degree of speculative support under the markets for the foreseeable future.

Meanwhile post the dry period over south eastern Brazil for the first three weeks of the year, there have been fair rains experienced for the end of January and the first half of February and with further rains being forecasted for this week.   This eliminating for the present the stress upon the majority of the coffee farms and assisting in the expansion and development of the new crop cherries, albeit that the combined effects of the partial drought in south eastern Brazil for early 2014, the late start to the 2014 new rain season and the dry spell early this year contributes to the prospects for a relatively modest deficit crop for this year.  

The arbitrage between the markets has narrowed on Friday to register this at 74.15 usc/Lb., while this equates to a relatively attractive 44.53% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,225 bags on Friday, to register these stocks at 2,257,074 bags.   There was meanwhile a larger in volume 58,558 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 71,308 bags.

The commodity markets were generally positive in nature ahead of the Presidents Day holiday for North America today and the long weekend, with the macro commodity index showing overall buoyancy.  The Oil, Natural Gas, Cocoa, London robusta Coffee, Cotton, Orange Juice, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Sugar, New York arabica Coffee and Copper markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.17% higher; to see this Index registered at 440.92.   The day starts with the U.S. Dollar tending softer and trading at 1.544 to Sterling and 1.142 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 60.35 per barrel.

The London and New York markets started the day on Friday with a degree of buoyancy and taking a positive track into the afternoon’s trade, but to see both markets taking a dip back into negative territory as the afternoon progressed and followed by a recovery for the markets that was sustained by the London market for the rest of the day, while the New York market once again came under negative pressure.   However with the two largest players in terms of physical coffee starting to step back from the market as the Brazilians celebrate Carnival and the Year of the Goat Tet New Year Holiday (Tết Nguyên Đán) has started in Vietnam, there is now a slowing physical trade activity over both markets.    The London market continued to end the day on a positive note and with 72.7% of the gains of the day intact, while the New York market ended the day on a softer note but having recovered 60.4% of the earlier in the day’s losses on the close.  The New York market is closed for the day and with Vietnam on holiday one cannot expect much activity within the London market that shall trade solo for the day, which is likely to experience a near to steady start for early thin trade against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     2009 + 21                                               MAR     163.20 – 1.35
MAY     2036 + 16                                               MAY     166.50 – 0.95
JUL      2057 + 15                                                JUL      169.15 – 0.90
SEP      2076 + 13                                               SEP      171.55 – 0.90
NOV     2088 + 13                                                DEC     174.75 – 0.95
JAN      2099 + 12                                               MAR     176.70 – 0.90
MAR     2119 + 12                                               MAY     177.30 – 0.95
MAY     2140 + 10                                                JUL     177.65 – 0.85
JUL      2161 + 6                                                  SEP     177.80 – 0.95
SEP      2173 + 6                                                  DEC    177.75 – 0.95

13th February, 2015.

Preliminary data released by the Vietnam Customs Authorities reports coffee exports for the month of January to have reached a total at 2,206,667 bags for the month, a decline of 5.6% on that of the same time last year. This would bring cumulative exports from Vietnam for the first four months of their new October 2014 to September 2015 coffee year, to a total 7,126,667 bags, or 2% above that of the same four months last year.

The institute of Geography and Statistics in Brazil released their forecast estimate for the 2015 coffee crop yesterday, which they foresee as due to drop 2.7% from the current 2014 production, to a figure of 43.90 million bags. This decline they note is mainly due to their lower forecast of Conilon robusta coffee year on year, which has been affected by a lack of sufficient rains during crop development. The forecast for arabica coffee production is meanwhile set to increase marginally year on year by 0.80% to 32.20 million bags, whereas the Conilon robusta production is anticipated to be lower than that of their figure for the 2014 crop robusta coffee crop and is put at a potential 11.70 million bags in this coming crop year.  These figures will likely received as understated while this forecast is close to the traditionally conservative Brazil government official National Crop Supply agency that has lately provided their forecast for the new 2015 Conilon crop to be between 11.60 million bags and 12.20 million bags, which may already be viewed by trade and industry to be at the lower end of estimates of this dry weather affected Conilon robusta crop to come. 

The well respected local crop analysts Safras e Mercado have meanwhile estimated that Brazilian producers have sold 79% of the estimated 48.90 million bags harvest in 2014 by the end of last week.  The improved value attained from the New York arabica markets and assisted by the weaker Brazil Real against the US Dollar to provide impetus to these sales and overall 79% of the estimated 33.40 million bags of arabica coffee and 77% of the estimated 15.50 million bags of Conilon robusta coffees had been sold. 

The arbitrage between the markets widened yesterday to register at 75.82 usc/Lb., while this equates to a relatively attractive 45.28% price discount for the London robusta coffee market.  This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,270 bags yesterday, to register these stocks at 2,259,299 bags. The number of bags pending grading for this exchange was unchanged on the day, at a total 12,750 bags yesterday.

It was overall a positive day for the commodity markets yesterday, although sentiment remains tenuous surrounding the economic discussions on Greece and the Eurozone, mildly negative jobless numbers from the States influenced a weaker US Dollar and the influential Oil markets gained in positive support. It was a stronger close for Oil, Coffee, a positive day for Gold, Silver, Platinum, Palladium, Cocoa, Cotton, Copper and a steady day for Sugar, Soybean and Orange Juice markets yesterday.  It was a softer day for Corn and Wheat. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.08% higher to see this Index registered at 435.827. The day starts with the US Dollar softer and trading at 1.5414 to Sterling and 1.1438 to the Euro, while the Brazil Real is trading at 2.82 and North Sea Oil is firmer in early trade selling at $ 57.74 per barrel. 

The day started on a positive note in the coffee markets yesterday and with good volume to setting the pace at the outset, both markets in modestly positive territory and an upward attempt in New York met with sellers at the top where levels moved back toward unchanged.  The arrival of the America’s later in the session as their business day began, met with a weaker US Dollar, a recovering Brazil Real and later reaction to a report from the Brazilian Institute of Geography and Statists released during the trading day.  The added volume of spreads from the prompt month in New York and a continuation in speculative options activity all contributed toward an upward surge as the New York market launched into positive territory with stops triggering along the way and similarly the London robusta market to set a new firmer trading range in both markets for the rest of the session with producer selling activity noted at the top with measured activity assisting to maintain the new higher range. 

Looking ahead, New York heads into a long weekend and will be closed on Monday to observe Presidents Day while London will be trading as usual.  The Brazil Carnival gets underway this weekend and stretches into next week, as does Vietnam’s week long Tet New Year holiday from 14th February, with the countries commercial activities due to close for nine days thereafter. This will see the entry into the new week on Monday with London trading alone and New York arabica market open again on Tuesday with first notice day and the two leading coffee producer countries distracted with internal festivities. 

It was meanwhile, another heavy volume day for both markets yesterday, with New York steadying out into the rest of the afternoon in a narrow band and a close just off the highs of the day, London had a similarly positive end to the day holding on to the gains to the end and finished the day near to the highs in this market, to set the close yesterday in positive territory as follows:  

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

MAR   1988 + 46 MAR 164.55 + 5.10
MAY   2020 + 46 MAY 167.45 + 5.15
JUL    2042 + 43 JUL 170.05 + 5.20 
SEP    2063 + 40 SEP 172.45 + 5.10
NOV   2075 + 38 DEC 175.70 + 5.05
JAN    2087 + 38         MAR     177.60 + 4.90
MAR   2107 + 38 MAY     178.25 + 4.85
MAY   2130 + 38 JUL      178.50 + 4.85
JUL    2155 + 38 SEP     178.75 + 4.95
SEP    2167 + 38 DEC     178.70 + 5.05

12th February, 2015.

The International Coffee Organisation have come forth with their annual calendar year exports report, to confirm that world coffee exports in calendar year 2014 to be the highest on record, at a total 111.70 million bags.  The increase in world export performance was fuelled by an increase of 15.23% in exports from Brazil in the year, to a total 36.3 million bags in 2014.  It was a positive export year for the leading robusta producer Vietnam and likewise the leading washed arabica coffee producer Colombia, which continues to recover from earlier weather related adversely affected coffee crops and rejuvenation programs, to post an increase in 2014 by 13.40% on that of calendar year 2013, to register exports for 2014 at 11 million bags.  

The arbitrage between the markets narrowed yesterday to register at 72.76 usc/Lb., while this equates to a relatively attractive 44.83% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,918 bags yesterday, to register these stocks at 2,260,569 bags. The number of bags pending grading for this exchange was unchanged on the day, at a total 12,750 bags yesterday.

It was a mixed day on the commodity markets yesterday, as the political and economic developments in Greece continue to raise concerns with Eurozone meetings underway this week. The situation in Ukraine similarly added to market uncertainty.  The US Dollar meanwhile recovered some ground during the day, while new and higher than expected Oil stocks being held in the leading consumer market, USA, weighed in on sentiment in the Oil markets yesterday.  It was a softer day for Oil, Corn, Cotton, Orange Juice, Gold, Silver, Palladium and Platinum, a steadier day for Sugar, Wheat, Soybean, Coffee, Copper and a firmer day for Cocoa, Cotton, Copper and Orange Juice.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.49% lower to see this Index registered at 431.158. The day starts with the US Dollar steady and trading at 1.5238 to Sterling and 1.1326 to the Euro, Brazil Real is trading at 2.8692, while North Sea Oil is firmer in early trade and is selling at $ 54.21 per barrel. 

The coffee markets began the day on a softer note in light volume in London and a positive start in New York which fell under some early pressure but with a rebound back to positive territory in the morning session.  It was a relatively narrow range day for New York and another heavy volume day.  With first notice day approaching, speculative and fund activity providing much of the volume and spreads active, much of the day was in positive albeit range bound territory.  The gains of the day were met with late in the day sellers and as the market moved toward the close, these gains were eroded to see New York finish the day and settle, hardly changed on last. The New York market remains volatile however, guided by the speculative sector and lacking fundamental news presently to guide direction, the weather in Brazil remains a factor and for now, there are reports of rains across the key coffee growing areas this week.  It was a similarly narrow range day in London, with good volume on the day remained in negative territory for much of the session but with underlying buyer support present to set the floor, with a recovery back to the positive on the close of the day, to set the close in both markets yesterday, as follows: 

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

MAR   1942 + 5                                                MAR    159.45 + 0.05
MAY   1974 + 3                                                 MAY     162.30 + 0.05
JUL    1999 Unch                                             JUL      164.85 + 0.05 
SEP    2023 – 2                                                 SEP     167.35 + 0.05
NOV   2037 – 2                                                 DEC     170.65 + 0.10
JAN    2049 – 2                                                 MAR    172.70 + 0.15
MAR   2069 + 2                                                MAY    173.40 + 0.20
MAY   2092 Unch                                             JUL     173.65 + 0.15
JUL    2117 – 4                                                 SEP     173.80 + 0.20
SEP    2129 – 4                                                 DEC    173.65 + 0.10

11th February, 2015.

Following on from the news of a positive export report of coffees from Brazil in January, to include value added soluble exports in green coffee equivalent and total exports in January, at 2.97 million bags; the overall value of the exports reported for the month of January, are related to relatively good value price fixed coffees when compared to the same month last year.  In this respect export performance for the month of January related to relatively good value price fixed coffees, reflect the January exports were 205.40 million US Dollars or 34.78% higher than the same month last year, at a total of 590.60 million US Dollars.  The Brazil Real has continued its slide against the US Dollar and is trading at 2.8343 to the US Dollar today, having touched upon 2.8393 during trade yesterday. There is meanwhile a degree of internal market price resistance on the part of arabica coffee farmers on their remaining stocks relative to the dictates of the softer nature of the New York market and the slipping exchange rate is likely to provide some short term assistance to act as a buffer to maintain sales.  The Carnival holidays are due to begin at the end of this week and will continue to mid next week when traditionally commercial activity can be expected to be muted and the Brazil stock exchange closed over the period.

The news from Vietnam is similarly for an anticipated slowdown in commercial activity ahead of the Tet New Year Holiday which is due to start at the end of this week.  Ahead of this week long holiday internal activity which was already slow in response to the lower London robusta market, has become restrained and internal price resistance on the part of relatively well financed farmers for their current harvest stocks, prevails. 

The National Cocoa and Coffee Board of the Cameroon who run a conventional October to September arabica coffee year and a separate December to November coffee year for their more prominent robusta coffee crop, have reported that during the completed 2013 to 2014 coffee year the countries coffee combined arabica and robusta coffee production was 269,050 bags or 96.87% higher than the production during the previous coffee year, at a total of 547,160 bags. This much improved 2013 to 2014 production that they related to the combination of 47,843 bags of arabica coffee and 499,317 bags of robusta coffee assisted to fuel exports of approximately 36,083 bags of arabica coffee and 364,483 bags of robusta coffee over the same period.  These exports which can also relate to carry over stocks from the previous crops and not the entire present crop that is being immediately exported are still significantly 182,317 bags or 33.32% lower than the estimated production. 

There is however a steady stream of coffee being smuggled into the neighbouring Nigerian market and thus one might not generally expect to see accuracy from production figures and likewise, exactly calculate not only the unofficial export figures and the unofficial domestic consumption and thus one might think, the figures are more significant in terms of apparent recovery for this once more prominent coffee supplier, than the precise figures being quoted.    With hopefully the country that was registering production levels of between 1.7 million bags and in excess of 2 million bags per annum twenty to twenty five years ago, having the chance to post a further recover in the coming years, albeit that now one is suggesting that there will be anything like a full recovery even in the medium term. 

The arbitrage between the markets narrowed yesterday to register at 72.85 usc/Lb., while this equates to a relatively attractive 44.90% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,100 bags yesterday, to register these stocks at 2,264,487 bags. The number of bags pending grading for this exchange registered an increase of 10,900 bags to a total 12,750 bags yesterday.

It was a softer day for the commodity markets yesterday, as uncertainty concerning Greece in the euro zone and political upheaval surrounding the situation in Ukraine weighed in on investor confidence across the board.  It was a softer day for the Oil markets, Sugar, Cocoa, Corn, Soybean, Wheat, Coffee, Cotton, Copper and Orange Juice.  The metals markets came under pressure and a lower day for Gold, Silver, Platinum and Palladium markets, while the US Dollar regained some lost ground on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.17% lower to see this Index registered at 433.28. The day starts with the U.S. Dollar steady and trading at 1.5238 to Sterling and 1.13 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 55.72 per barrel. 

The coffee markets started the day on a mildly positive note in London and in marginally softer territory in New York.  The early light trade in London picked up pace during the session with this robusta market holding in positive territory within a relatively narrow range for the better part of the day.  The New York market turned mildly positive in early trade but met with scale down selling, with underlying buyer support returning to meet the early lows. The weight turned in favour of selling activity however and as the volume in New York picked up pace, the session turned softer within speculative sellers leading the way, to be joined by origin sellers and triggered stops along the way. The volatility seemed to stem from the prompt month for which options expiration and spread activity came to the fore ahead of first notice day next week.  Thus, after a hefty volume day in New York, with March and May positions posting a total combined 56,536 lots traded, the arabica market lost the gains of the past week and settled at a close near to the day lows. The London robusta market meanwhile posted a higher volume day while remaining positive though the session, slipped into negative territory toward the end of the day, to set the close in both markets yesterday, as follows: 

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

MAR     1937 – 7 MAR 159.40 – 8.20
MAY     1971 – 6 MAY 162.25 – 8.15 
JUL      1999 – 4 JUL 164.90 – 8.15 
SEP      2025 – 3 SEP 167.30 – 8.05
NOV     2039 – 3 DEC 170.55 – 7.95
JAN      2051 – 3 MAR    172.55 – 7.90
MAR     2067 – 3 MAY    173.20 – 7.90
MAY     2092 – 3 JUL     173.50 – 7.65
JUL      2121 – 3 SEP     173.55 – 7.80
SEP      2133 – 3 DEC    173.55 – 7.80

10th February, 2015.

The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market decreased their net long position within this market in the week of trade leading up to Tuesday 23rd February, to see this long position cut by 582 lots to a net long that was registered at 13,674 Lots, on the day.  This speculative net long position within the London market is the equivalent of a relatively modest 2,279,000 bags has most likely been little changed in the period of overall steady to softer trade that has since followed.

The Brazilian Coffee Exporters Association have come forth with their more detailed coffee export figures for the month of January, to report that the green coffee exports for the month were altogether 290,000 bags or 11.69% higher than the same month last year, at a total of 2,770,000 bags.  While arabica posted a 2% increase on that of last year, or 50,000 bags more at 2.42 million bags, the bulk of the increase was seen in green robusta exports, which posted a 199% increase when compared to the same month last year, at a total 344,574 bags in January 2015.  Added to this were the value added exports of soluble coffee calculated in terms of their green coffee equivalent at a lower 31.62% and a total at 203,835 bags.  This leading up to a total for the overall coffee exports for the month of January, at 6.39% above that of the same time last year and a total 2.97 million bags. 

The arbitrage between the markets has broadened yesterday to register this at 80.72 usc/Lb., while this equates to a relatively attractive 47.37% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. 

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 550 bags on yesterday, to register these stocks at 2,265,587 bags. The number of bags pending grading or this exchange remained unchanged at 1,850 bags.

It was a mostly positive day for the commodity markets yesterday, while economic data released out of China reported lower than anticipated imports and exports weighed in on sentiment, the US Dollar posted a weaker day, making US Dollar traded commodities more affordable in other major currencies, while Oil rose for a third straight session. It was a positive day for Oil, Sugar, Cocoa, Corn, Soybean, Wheat, Coffee, Cotton and Orange Juice.  It was a similarly positive day for Gold, Silver and a softer day for the Platinum, Palladium and Copper markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.97% higher to see this Index registered at 438.43.   The day starts with the U.S. Dollar steady and trading at 1.5242 to Sterling and 1.134 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 56.22 per barrel. 

It was a relatively heavy volume day in the coffee markets yesterday, although in New York lighter than the volumes traded on Friday.  The speculative sector continued to set the pace, lacking fresh fundamental news apart from the weekend rains received in Brazil, to guide direction ahead of first notice day in the prompt month in New York next week.  The Brazil Real slipped back against the US Dollar yesterday to touch on 2.7967 before a recovery to 2.78 and is trading at 2.769 this morning.  The London market opened on a softer note but recovered back to steady as underlying buyer activity returned to the floor.  The latter day session in this market following through on the recovery seen in New York toward the latter half of that session, to see London finish in positive territory, although off of the days’ highs.  New York opened the day on a mildly softer note and traded within a narrow range toward midsession. The market pushed lower to encourage underlying buyers to return to floor, which additionally boosted the morning and by the later part of the day, New York regained ground back to positive territory.  The generally positive move in commodities on the day perhaps lending an influence and with London in positive territory, New York regained ground during the session to finish the day close to unchanged in positive territory, to see the close yesterday in both markets, as follows;  

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

MAR     1944 + 11 MAR 167.60 + 0.75
MAY     1977 + 12 MAY 170.40 + 0.80 
JUL      2003 + 14 JUL 173.05 + 0.80 
SEP      2028 + 14 SEP 175.35 + 0.75
NOV     2042 + 15 DEC 178.50 + 0.80
JAN      2054 + 17 MAR    180.45 + 0.80
MAR     2070 + 17 MAY    181.10 + 0.70
MAY     2095 + 17 JUL     181.35 + 0.65
JUL      2124 + 17 SEP     181.45 + 0.70
SEP      2136 + 17 DEC    181.35 + 0.70

9th. February, 2015.

The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 18.07% in the week of trade leading up to Tuesday 3rd. February;  to register a net long position of 15,887 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 0.94%, to register a net long on the day of 25,781 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 25.29%, to register a net long of 10,185 lots on the day.   This net long position that is the equivalent of 2,887,402 bags has most likely been increased once more over the period of mixed but overall positive trade that has since followed and likewise, the net long position of the Managed Money Funds.

There was minimal fundamental news coming to the coffee markets on Friday, which aside from the questions over the prospects for rains for the remaining three months of the summer rain season in south east Brazil, presently have very little to be concerned about.    The clarity over the outcome of these rains and despite the forecasts for a relatively wet first half of February, only really due to start registering some more defining statistical data, by the end of March and by when the February and March rainfall reports shall be at hand and there might be some reasonably accurate forecasts for the traditionally more modest rainfall in April.

In the meantime many farmers and internal traders within the main producer blocs other than Brazil apparently disbelieve the lower trading range that is being experienced within the New York market and mirrored to a degree by the London market, to maintain relatively firm internal market prices for the majority of the producers.  Thus forcing exporters in general to have to apply relatively firm asking differentials for new business and likewise slowing the buying interest on the part of the international coffee trade, who are reluctant to carry new crop stocks at relatively high and potentially uncompetitive on the longer term differentials.

This is resulting in a relatively lacklustre physical coffee market and having some influence upon a steady build-up of producer stocks, which shall finally have to be cashed in and come to a cash market.  The question is what price levels shall the reference prices of the New York and London markets be, when producers shall eventually become more aggressive buyers and need to chase not only the steady industry buying requirements, but also the trade to take on the short term surplus stocks.   This one would think shall be a factor that might start to influence selling patters by the second quarter of this year, by when there shall be much more clarity over the prospects for the new Brazil crop, which shall in turn have an influence as to what levels the funds and speculative sectors of the market shall dictate as a safe trading range.  

The arbitrage between the markets has broadened on Friday to register this at 80.47 usc/Lb., while this equates to a relatively attractive 47.45% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,794 bags on Friday, to register these stocks at 2,266,137 bags.   There was meanwhile a smaller in volume decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 1,850 bags.

The commodity markets were mixed but mostly all about Oil again on Friday, as the Oil markets were experiencing a follow through and relatively strong corrective rally and despite some renewed muscle that was being experienced by the U.S. Dollar, which impacted negatively within many markets.     The Oil, Sugar, Cocoa and Coffee markets had a positive day’s trade and the Wheat market was steady, while the Natural Gas, Cotton, Copper, Orange Juice, Corn, Soybean, Gold, Silver and Platinum markets tended softer for the 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 434.24.   The day starts with the U.S. Dollar steady and trading at 1.525 to Sterling and 1.135 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 56.20 per barrel.

The London and New York markets started the day yesterday on a steady note and with the markets very quickly showing some buoyancy and adding value, as the morning progressed and into thin early afternoon trade.   As the afternoon progressed and with trade thin, the New York markets started to build on its value and with volumes picking up the New York market started to take a firmer track, while the London market maintained its relatively modest buoyancy.   The New York market started to trigger buy stops that accelerated its gains before returning to more modest positive buoyancy, which remained the track for the rest of the day for both markets, ahead of the weekend.  The relatively thinly London market continued to end the day on a positive note and with 64.7% of the earlier gains of the day intact, while the more active New York market likewise ended the day on a positive note and with only 42% of the earlier gains of the day intact.   The inability to end the day with a good percentage of the earlier gains intact within the more volatile and influential New York market might not inspire too much confidence for early trade today and one might think that the markets shall be in for only a cautious near to steady start for early thin and lacklustre trade today against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1933 + 11                                               MAR     166.85 + 2.10
MAY     1965 + 11                                               MAY     169.60 + 2.05
JUL      1989 + 12                                                JUL      172.25 + 2.05
SEP      2014 + 14                                               SEP      174.60 + 1.95
NOV     2027 + 13                                                DEC     177.70 + 1.85
JAN      2037 + 13                                               MAR     179.65 + 1.60
MAR     2053 + 13                                               MAY     180.40 + 1.60
MAY     2078 + 13                                                JUL     180.70 + 1.65
JUL      2107 + 13                                                SEP     180.75 + 1.90
SEP      2119 + 13                                                DEC    180.60 + 2.05

6th. February, 2015.
The U.S. based Climate Protection Centre has maintained its forecast for a 50% to 60% chance for a mild El Nino phenomenon to develop within the south Pacific ocean in the coming weeks and into the second quarter of this year, but the severity of this would be negligible in terms of its influence upon the pacific rim coffee producing countries.   In reality a mild El Nino being somewhat positive for these countries, as it would with the marginally drier conditions for Colombia and Peru, assist to limit the threat of Roya or Leaf Rust and in turn and on its influence in more distant countries, assist to buoy the rainfall levels in south east Brazil.  

Meanwhile within the critical arabica coffee districts in Brazil there have been rains over the past two weeks and this has been beneficial for the development of the new crop coffee, but has not been sufficient in volume to buoy the reservoir levels for the general water reserves for the area ahead of the forthcoming dry winter season.   Thus while there are concerns within the urban centres in these districts with more rains on the horizon, the coffee farmers are for the present no longer talking of potential drought damage for this new crop.

Internal market coffee trade in Brazil is slow and steady for the present, but with the Brazil Real weaker and now trading at 2.74 to the U.S. dollar, there are sufficient volumes still coming to the exporters to cover their short to medium term export commitments.   Thus it is very much business as usual out of Brazil, albeit that modest internal market price resistance is tending to firm up the asking differentials for new arabica coffee business.

There continues to be a degree of price resistance within Central America in general, where the slightly delayed and overall larger new crop is presently building up internal market stocks, with this resistance keeping asking export differentials relatively firm and likewise slowing new business, which is limiting the price fixation selling activity into the related New York market.   The question is with stocks rising how long the farmers and internal traders in Vietnam can continue to show resistance and one might guess that if the rains in Brazil continue in good order into March that confidence in a Brazil weather related crop disaster support for the reference prices of the New York market might start to wane and thus, trigger some degree of increased selling aggression within Central America.  

Meanwhile the consumer market industries remain slow and steady cautious buyers and only paying up for need to have new crop coffees from Central America at the relatively firm asking differentials that are being dictated to the exporters by the internal market price resistance, with the prospect for much higher volumes of new trade related business on the cards once there is more clarity to the medium to longer term market during the post Brazil rain reason in the second quarter of the year.   Such activity and with the resulting price fixation selling into the New York market is potentially negative for the market, unless the follow on weather in south eastern Brazil proves to be threatening for the new crop, which would bring back the funds as aggressive buyers of the market.   This uncertainty as the world awaits the oncome of the next eight weeks of weather in Brazil, tending to side-line many players from the coffee markets.  

The arbitrage between the markets has broadened yesterday to register this at 77.57 usc/Lb., while this equates to a relatively attractive 47.08% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,480 bags yesterday, to register these stocks at 2,267,931 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,170 bags.

The Certified Robusta coffee stocks held against the London market were seen to increase by 7,980 bags or 5.69% over the two weeks of trade leading up to Monday 2nd. February, to see these stocks registered at 2,470,667 bags.   These stocks lacking significant growth, as the strong price resistance within the internal market in Vietnam is forcing export differentials higher and limiting the volumes of affordable coffee that can be taken into trade stocks, for purposes of tendering to this exchange.

The commodity markets were mostly all about Oil yesterday, as these markets were once again experiencing a strong corrective rally.  The Cocoa, Cotton, Copper, Wheat, Corn and Soybean markets had a day of buoyancy and the Oil markets surged for the day, while the New York arabica Coffee market was close to steady and the Natural Gas, Sugar, London robusta Coffee, Orange Juice, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.38% higher; to see this Index registered at 433.70.   The day starts with the U.S. Dollar steady and trading at 1.534 to Sterling and 1.147 to the Euro, while North Sea Oil is showing follow through buoyancy in early trade and is selling at $ 56.20 per barrel.

The London and New York markets started the day yesterday on a steady note and with the markets very quickly showing some buoyancy and adding value, as the morning progressed and into thin early afternoon trade.   As the afternoon progressed and with trade thin, the markets came under a little pressure to head back to par and with the markets picking up in volume and moving into modest negative territory.  The markets stuttered on within an environment of thin and lacklustre trade for the rest of the day, with producers mostly withdrawn from any selling aggression and the consumer industries mostly side-lined from the market.   The London market continued to end the day on a softer note and with 69.2% of the losses of the day intact, while the New York market ended the day close to steady and having recovered 90.6% of the earlier losses of the day by the close.   The apparent stability of the New York market that continues to resist downside pressure over the past couple of weeks is perhaps supportive for sentiment and one might expect to see a slow and steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1922 – 9                                                 MAR     164.75 – 0.15
MAY     1954 – 7                                                 MAY     167.55 – 0.15
JUL      1977 – 8                                                  JUL      170.20 – 0.10
SEP      2000 – 9                                                  SEP     172.65 – 0.10
NOV     2014 – 7                                                  DEC     175.85 – 0.10
JAN      2024 – 7                                                  MAR    178.05 – 0.15
MAR     2040 – 7                                                  MAY    178.80 – 0.10
MAY     2065 – 7                                                   JUL     179.05 – 0.05
JUL      2094 – 7                                                   SEP     178.85 – 0.10
SEP      2106 – 7                                                  DEC     178.55 – 0.15

5th. February, 2015.
The Coffee Growers Federation in Colombia has reported that the countries coffee production for the month of January was 77,000 bags or 7.62% higher than the same month last year, at a total of 1,088,000 bags.   This contributes to the countries cumulative production for the first four months of the present October 2014 to September 2015 coffee year to be 93,000 bags or 2.16% higher than the same period in the previous coffee year, a total of 4,390,000 bags.

Meanwhile the Colombian Coffee Growers Federation have reported that the countries coffee exports for the month of January were 98,000 bags or 10.13% higher than the same month last year, at a total of 1,065,000 bags.    This contributes to the countries cumulative exports for the first four months of the present October 2014 to September 2015 coffee year to being 154,000 bags or 3.89% higher than the same period in the previous coffee year, at a total of 4,114,000 bags.

These very positive figures from Colombia and with the climatic conditions presently very positive for the farmers and more and more of the recently planted new trees that are related to the countries rejuvenation program coming into full yielding maturity, would indicate that both production volumes and export volumes shall continue to steadily increase.    In this respect to see production and export volumes for this present coffee year to most likely top the 12,128,400 bags produced during the previous October 2013 to September 2014 coffee year and an export performance of 10,960,000 bags.

The Coffee Exporters Association of India have made a statement that due to a relatively modest new arabica coffee crop, that the countries coffee exports for the October 2014 to September 2015 coffee year shall experience a 10% decline.  This is however a somewhat questionable statement and while there is no question that the countries arabica coffee crop has been coming in a little lower; the perspective is that there will be a much larger new robusta coffee crop which shall be approximately 10% higher than the past robusta crop.  Thus with the robusta coffees dominating overall production with an approximate 70% of overall coffee production, one might not see reason to believe in a lower export potential from India for this present coffee year.

The European Coffee Federation port warehouse stocks were seen to decrease by a modest 17,589 bags or 0.15% during the month of December, to end the month with stocks reported at 11,490,771 bags.    These stocks do not however include the onsite roaster inventory, bulk container transit and unreported private warehouse stocks which with the combination of west and east European consumption of around 980,000 bags per week, would most likely have been at least 2.5 million bags and therefore at a guess, total stocks as at the end of December of approximately 14 million bags.   Thus stocks that would exceed 14 weeks of the presently flat to often marginally lower roasting activity, which is a very safe level and allow for the European industries to be cautious rather than aggressive buyers.

There has been a report in the Vietnam Economic Times journal that many coffee farmers in Vietnam might be inspired to look to start planting macadamia trees within their aging coffee farms, to remove their coffee trees and switch to more reliably profitable macadamia farming once the trees start to come into production in seven to eight years’ time.   This would mirror the similar and economically very successful steps that were taken within the commercial coffee farms in Malawi in the 1990’s, which saw most coffee farms move out of the coffee industry and become what is now a good volume macadamia nut exporter.    While noting that with one of the leading high volume importers of macadamia nuts being China, that Vietnam is geographically in an ideal position to produce nuts for this good value market and is likely to provide further inspiration for the countries very efficient and innovative farmers to consider moving into macadamia production.

Such developments would have little impact upon the volumes of robusta coffee presently being produced by this leading world producer for the next six years or so, but might dent the growth potential of the Vietnam crop on the longer term.   However one would think that on the longer term that while Vietnam might be hitting a ceiling in terms of annual coffee crops, there is significant growth potential in terms of coffee production due from the neighbouring countries in Asia and with Vietnamese investors already actively looking into coffee production in Laos, Cambodia and Myanmar or Burma.   Thus seemingly little risk, in terms of the move into macadamia nuts.

The arbitrage between the markets has broadened yesterday to register this at 77.31 usc/Lb., while this equates to a relatively attractive 46.88% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,551 bags yesterday, to register these stocks at 2,266,451 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,170 bags.

The commodity markets mostly suffered a late in the day reversal of fortunes yesterday, which saw the overall macro commodity index likewise suffer a reversal and take a softer track to the close.  The Cocoa, Coffee, Copper, Gold, Silver and Platinum markets nevertheless had a day of buoyancy and the Cotton market was steady, while the Oil, Natural Gas, Sugar, Orange Juice, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.19% lower; to see this Index registered at 432.08.   The day starts with the U.S. Dollar steady and trading at 1.520 to Sterling and 1.134 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 52.30 per barrel.

The London and New York markets started the day yesterday on a steady note and with the markets showing some buoyancy and adding value, as they moved into the afternoon’s trade.   As the afternoon progressed however the New York market took a sudden surge and triggering buy stops, experienced a relatively strong rally and with the London market following suit.   The markets then took a bit of a breather and with trade slow, to come off from the highs but to nevertheless hold on to a good percentage of the gains and take lightly trade sideways positive track for the rest of the day.  The London market ended the day on a positive note and with 57.1% of the gains of the day intact, while the New York market that is seemingly lacking negative producer selling pressure for the present, ended the day on a positive note and with 66.4% of the earlier gains of the day intact.   This overall positive close is most likely to inspire a slow and cautious steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1931 + 24                                               MAR     164.90 + 4.15
MAY     1961 + 22                                               MAY     167.70 + 4.10
JUL      1985 + 21                                                JUL      170.30 + 4.10
SEP      2009 + 19                                               SEP      172.75 + 4.05
NOV     2021 + 18                                                DEC     175.95 + 4.05
JAN      2031 + 18                                               MAR     178.20 + 4.00
MAR     2047 + 18                                               MAY     178.90 + 4.00
MAY     2072 + 18                                                JUL     179.10 + 4.10
JUL      2101 + 18                                                SEP     178.95 + 4.15
SEP      2113 + 18                                                DEC    178.70 + 4.20

4th. February, 2015.
The National Coffee Institute of Costa Rica have reported that the countries coffee exports for the month of January were 8,658 bags or 8.5% lower than the same month in the previous year, at a total of 93,144 bags.   This slow start to the new coffee year has contributed to the countries cumulative exports for the first four months of the present October 2014 to September 2015 coffee year to being 31,829 bags or 13.27% lower than the same period in the previous coffee year, at a total of 208,044 bags.

The National Coffee Institute of Honduras have reported that the countries coffee exports for the month of January were 21,626 bags or 4.26% higher than the same month in the previous year, at a total of 529,499 bags.   This follows a positive start for the previous months and the cumulative coffee exports for the first four months of the present October 2014 to September 2015 coffee year are 238,664 bags or 28.34% higher than the same period in the previous coffee year, at a total of 1,080,689 bags.

Meanwhile the National Coffee Institute of Honduras are forecasting that on the basis of their larger new crop that is presently in harvest, that they can expect to report coffee exports for the present October 2014 to September 2015 coffee year to be 14% higher than the previous coffee year, at approximately 4.8 million bags.   This positive performance is expected to be mirrored but perhaps not to the same impressive degree as is expected within Honduras, from their neighbours in Central America and with combined coffee exports from Mexico and Central America for the present coffee year generally expected to increase by approximately 1 million to 1.2 million bags for this coffee year and therefore significantly adding to the supply of fine washed arabica coffees to the consumer markets.

The leading Brazilian coffee cooperative Cooxupe have come forth yesterday with a market supportive forecast that due to the dry and hot weather during most of January, that they are reducing their cooperatives forecasted output from the forthcoming new crop by approximately 13.6% and a figure from their southern Minas Gerais farms of a relatively dismal 3.8 million bags.   Adding to the impact of this forecast they have also reported that they have forward sales commitment of approximately 5 million bags of new crop coffees and therefore, they shall need to go to the internal market and the arabica coffee farmers outside of their cooperative members, to cover the approximately 1.2 million bags shortfall.

This report is a rather dramatic one and might well in terms of the number quoted have some influence upon market sentiment but to what degree is difficult to foresee, but it most certainly might result in a degree of caution on the part of the speculative bears within the market, who have been fuelling the downside track of the New York market this year.   But perhaps the inclusion of the dry weather being related to being a drought rather than a three to four week spell of dry weather that has since broken and with fair rains coming to most coffee farms and more to follow, shall likewise influence a degree of caution within the speculative bullish sector of the market who know for sure that there has not been a full on drought.   

The National Coffee Association of Mexico have noted that with good domestic demand for robusta coffees to fuel the soluble coffee factories within the country that presently import robusta coffees, that many lower altitude arabica coffee farmers and farmers in general are not planting out lower maintenance and higher yielding robusta coffee trees.   These developments some are predicting shall see the present Mexican robusta coffee production of close to 500,000 bags per annum, double over the next four to five years.   How these developments might impact upon the countries arabica coffee production that has seen many farmers suffering with the higher control costs and losses in yield from Roya or Coffee Rust remains unclear, but there is no doubt that there are prospects for a recovery in overall coffee production for Mexico in the coming years.   

The arbitrage between the markets has narrowed yesterday to register this at 74.25 usc/Lb., while this equates to a relatively attractive 46.19% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 125 bags yesterday, to register these stocks at 2,268,002 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,170 bags.

The commodity markets were mostly positive yesterday, with the weaker U.S. dollar providing for support within many markets, while the further corrective gains for the Oil markets contributed to the buoyancy of the overall macro commodity index.  The Oil, Natural Gas, Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Soybean, Silver and Platinum markets had a day of buoyancy and the Orange Juice market was steady, while the Coffee and Gold markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.91% higher; to see this Index registered at 437.29.   The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.515 to Sterling and 1.147 to the Euro, while North Sea Oil is marginally softer in early trade and is selling at $ 55.50 per barrel.

The London and New York markets started the day yesterday on a steady note and with the markets showing some buoyancy and adding value, as they moved into the afternoon’s trade.   As the afternoon progressed however the New York market started to come under pressure and moved back to par and followed by the London market, to start attracting further selling pressure within both markets and move back into negative territory.  There was however relatively thin producer selling activity over the markets and with opportunist consumer industry buying coming into play the markets managed to bounce of the lows, as the afternoon progressed.  The London market continued to end the day on a softer note and with 71.4% of the earlier in the day’s losses intact, while the New York market likewise ended the day on a softer note, but having recovered 58% of the earlier losses of the day.    This degree of resistance to the downside pressure in New York and the latest forecasts from Cooxupe in Brazil might well inspire some further industry support and a degree of buoyancy for the usual thin early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
MAR     1907 – 10                                               MAR    160.75 – 1.70
MAY     1939 – 9                                                 MAY    163.60 – 1.65
JUL      1964 – 9                                                  JUL     166.20 – 1.65
SEP      1990 – 8                                                 SEP     168.70 – 1.70
NOV     2003 – 8                                                 DEC     171.90 – 1.70
JAN      2013 – 8                                                 MAR    174.20 – 1.65
MAR     2029 – 6                                                 MAY    174.90 – 1.65
MAY     2054 – 3                                                  JUL     175.00 – 1.65
JUL      2083 unch                                              SEP     174.80 – 1.60
SEP      2095 unch                                              DEC    174.50 – 1.55

3rd. February, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market increase their net long position within this market by 2.00% in the week of trade leading up to Tuesday 27th. January, to see this long position turned into a net long that was registered at 14,256 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,376,000 bags has most likely been little changed to marginally decrease during the period of mixed but overall steady to softer trade that has since followed.

With the month of January over the Indonesian island of Sumatra which dominates the nations robusta coffee production has reported some significant changes to their export robusta coffee figures reported earlier yesterday, with amendments made to many of the months previously reported figures.   Therefore we now report that the islands robusta coffee exports for the month of December were 98,135 bags or 39.28% lower than the same month last year, at a total of 151,690 bags.   This follows a relatively dismal performance over the previous three months and therefore the cumulative robusta exports from Sumatra for the first four months of the present new October 2014 to September 2015 coffee year are 983,058 bags or 44.25% lower than the same period in the previous coffee year, at a total of 1,238,452 bags.

The preliminary coffee exports for the month of January from Brazil are seen to have been 319,900 bags or 10.51% lower than the same month last year, at a total of 2,724,800 bags.     This dip in exports having followed many months of very active coffee export activity, which has both confirmed the perception of significant carryover stocks of arabica coffees into the relatively modest new 2014 crop and the fact that farmers while believing that the new 2015 arabica coffee crop might be another modest one, it shall not be so modest as to justify the carry of excessive stocks to take profit out of a miserable new crop and its influence upon international coffee prices.

The Brazil Real is however once again on the back foot and is trading at 2.726 to the U.S. dollar and while there is a degree of internal market price resistance on the part of arabica coffee farmers in terms of their remaining stocks to the dictates of the softer nature of the New York market, the exchange rate is likely to nevertheless inspire slower but steady sales.   Sales do however require a market and while exporters in Brazil might see reason to take on some stocks to cover for forward export sales commitments, the consumer markets are not seen to be very aggressive at the present and one might expect to see only steady rather than aggressive selling activity out of Brazil for the coming weeks.

With the week-long Tet New Year Holiday (Tết Nguyên Đán) in Vietnam due to start at the end of next week to interrupt an already short month, the assessment of the traders in Vietnam is that coffee exports of mostly robusta coffees for the month of February shall be a relatively modest 1.42 million to 1.67 million bags, with these export volumes further retarded by last month’s relatively slow export selling activity.   This slow selling activity has been retarded by the internal market price resistance, which has seen exporters struggle to conclude all but the very necessary new business with the consumer market buyers.

The big question is how long shall the internal market continue to show such resistance, as post the Tet holidays farmers and internal traders shall still be holding large new crop stocks and with the need to raise further post-holiday funding for the finance of farm irrigation and fertilizer inputs during the last two and half months of the present dry winter season, there might be some added pressure to liquidate more stocks.   This factor might well result in increased selling aggression and some added price fixation selling pressure for the presently steady London market, for the end of the month and into the coming month.

The arbitrage between the markets has broadened yesterday to register this at 75.50 usc/Lb., while this equates to a relatively attractive 46.48% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 441 bags yesterday, to register these stocks at 2,268,127 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,170 bags.

The commodity markets were mixed again yesterday with the reversal of the fortunes of the much battered Oil markets and the sharp dip for the Sugar markets, being very much the feature for the day.   The New York arabica Coffee, Cotton, Corn, Soybean and Silver markets had a day of buoyancy and the Oil markets posted good gains for the day, while the Natural Gas, Cocoa, London robusta Coffee, Copper, Orange Juice, Wheat, Gold and Platinum markets tended softer for the day and the Sugar markets registered sharp losses for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.19% lower; to see this Index registered at 429.11.   The day starts with the U.S. Dollar steady and trading at 1.501 to Sterling and 1.133 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 53.10 per barrel.

The London and New York markets started the day yesterday with a degree of buoyancy, which was presumably inspired by the positive close in New York on Friday.   This remained the track into the early afternoon’s trade, when the New York market slipped back to par and the London market maintained some of its buoyancy.   The New York market continued to slip below par and with the London market following this market into negative territory, but while the New York market once again recovered and moved back above par, the London market remained on its softer track.  The London market continued to end the day on a softer note and with 88.9% of its modest losses for the day intact, while the New York market ended the day on a positive note but with only 31.4% of its gains of the day intact.   This rather dull close is likely to inspire 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.                                                
                                                
MAR     1917 – 8                                                 MAR     162.45 + 0.55
MAY     1948 – 6                                                 MAY     165.25 + 0.60
JUL      1973 – 6                                                  JUL      167.85 + 0.50
SEP      1998 – 5                                                 SEP      170.40 + 0.55
NOV     2011 – 4                                                 DEC      173.60 + 0.45
JAN      2021 – 4                                                 MAR     175.85 + 0.45
MAR     2035 – 7                                                 MAY     176.55 + 0.45
MAY     2057 – 4                                                  JUL     176.65 + 0.45
JUL      2083 unch                                              SEP     176.40 + 0.55
SEP      2095 – 1                                                 DEC     176.05 + 0.65

2nd. February, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 21.55% in the week of trade leading up to Tuesday 27th. January;  to register a net long position of 19,392 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market increased their net long position within the market by 1.20%, to register a net long on the day of 26,026 Lots.   

During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 32.50%, to register a net long of 13,632 lots on the day.   This net long position that is the equivalent of 3,864,612 bags has most likely been further decreased over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds.

With the month of January over the Indonesian island of Sumatra which dominates the nations robusta coffee production has reported that the islands robusta coffee exports for the month of December were 13,370 bags or 9.67% higher than the same month last year, at a total of 151,690 bags.   This follows a relatively dismal performance over the previous three months and therefore the cumulative robusta exports from Sumatra for the first four months of the present new October 2014 to September 2015 coffee year are 1,109,701 bags or 52.59% lower than the same period in the previous coffee year, at a total of 1,000,304 bags.

This relatively poor performance on the part of robusta coffee supply from Sumatra is of course related to a poor weather related crop last year and one can expect that for the short term and ahead of the new crop that starts to come into play during the second quarter of this year, that the figures shall continue to be relatively modest for the next four to five months.   However the weather conditions have been much improved and the prospects are for a much improved new crop, which should see the Sumatran robusta coffee exports start to pick up and become more aggressive by the third quarter this year and therefore, the last quarter of the present coffee year.

Meanwhile and ahead of the potentially rising volumes of new crop robusta coffees due from Indonesia in the second half of the year, the consumer markets shall focus upon the relatively good supply of new crop Vietnam, Indian and African robusta coffees, but with the week-long Tet New Year Holiday (Tết Nguyên Đán) in Vietnam due to start on Sunday 15th. February, which shall interrupt the flow of supply from this the leading supplier to the consumer markets.   This year and unlike tradition in the previous years and with Vietnamese farmers seemingly having good financial support in hand, there has not been the usual pre-holiday flurry of increased selling aggression coming into play.   Thus it would seem that internal market price resistance to the dictates of the softer nature of the reference prices of the London market is due to see sales and exports of new crop robusta coffees from Vietnam remain relatively slow and to perhaps continue so, until well past these celebrations that see Vietnam enter this new year of the Goat.

Brazil weather reports while raining upon the confidence of the speculative sector of the New York market last week, do still indicate that many important arabica coffee districts have ended the month with less than 50% of their long term monthly averages, which tended to stall the recent downside track for the market on Friday.  It is however still noted that there has been unlike last year’s experiences some reasonable rains during the month, which is proving with a seemingly wet start to February on the cards to be sufficient moisture intake to maintain the steady progress of this year’s relatively modest new arabica coffee crop.

The arbitrage between the markets has broadened on Friday to register this at 74.58 usc/Lb., while this equates to a relatively attractive 46.07% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,888 bags on Friday, to register these stocks at 2,268,568 bags.   There was meanwhile a smaller in volume 290 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,170 bags.

The commodity markets were mixed on Friday and were in receipt of softer growth figures for the last quarter of last year from the U.S.A. and likewise from China, which has some impact upon prospective longer term demand.   This did not however impact upon the relatively soft macro commodity index, which showed buoyancy for the day.   The Oil, New York arabica Coffee, Copper, Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy and the Cotton market was steady, while the Natural Gas, Sugar, Cocoa, London robusta Coffee, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.28% higher; to see this Index registered at 429.91.   The day starts with the U.S. Dollar steady and trading at 1.507 to Sterling and 1.130 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 50.05 per barrel.

The London and New York markets started the day on Friday on a steady note and in very thin trade, with the New York market adding a little more value in the first hour of trade, while the London market remained steady.   Trade was however very hesitant and the early afternoon saw the New York market lose its early gains and head back to join London on par.   This dip was however short lived and the New York market soon recovered, while the London market started to show a degree of modest buoyancy.    The London market did not however manage to retain its buoyancy moved back to take a negative track for the rest of the day and to end the day on a soft note and with 90.5% of the earlier losses of the day intact, while the New York market took a steady upside track for the rest of the day and to end the day on a positive note and with 84.4% of the earlier gains of the day intact.    The positive nature of the New York market on the close is perhaps due to provide follow through support for sentiment and to inspire a degree of modest buoyancy for early trade today, against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.                                                
                                                
MAR     1925 – 19                                               MAR     161.90 + 1.90
MAY     1954 – 18                                               MAY     164.65 + 1.90
JUL      1979 – 17                                                JUL      167.35 + 1.90
SEP      2003 – 14                                               SEP      169.85 + 1.90
NOV     2015 – 13                                                DEC     173.15 + 1.90
JAN      2025 – 13                                                MAR    175.40 + 1.80
MAR     2042 – 13                                                MAY    176.10 + 1.75
MAY     2061 – 13                                                 JUL    176.20 + 1.70
JUL      2083 – 13                                                 SEP    175.85 + 1.60
SEP      2083 To open                                         DEC    175.40 + 1.65

30th. January, 2015.
The rains continue to impact upon the main arabica coffee districts within south east Brazil, but so far not all districts have reported heavy rains.  The prospects are however for more rains over the coming week and the perspective remains for relatively good coverage and for much relief for the farmers, who have been voicing concerns over the development of the coffee cherries towards the new crop.

These rainfall reports are being followed by new forecasts for not only good rains for the first week of February, but further rains to come during the month.   These rains for south east Brazil to result in February to be a wetter month than January and in terms of moisture, to assist to build up ground water retention levels ahead of the relatively drier months to follow.

But more important in terms of the market which has been focusing upon the relatively fresh memories of the two months of dry and damaging weather to start off last year is that there really has been no repeat of the partial drought of last year, which has dampened speculative spirits towards the New York arabica coffee market and accompanied by technical chart based speculative and fund selling.   With the London market that is fundamentally more secure, following the track set by New York.

Weather issues aside Brazil’s Ministry of Agriculture have officially declared a Phytosanitary emergency for the mostly arabica coffee producing state of Sao Paulo and the mixed arabica coffee and conilon robusta coffee producing state of Espirito Santo, due to the increasing incidences of the Broca or Coffee Borer beetle (Hypothenemus hampei) being experienced by coffee farmers in these states.   There are measures that can be taken by farmers to control Broca but they are difficult and while one would expect that the countries very experienced and efficient farmers will apply good degrees of control that one might expect to see an increased percentage of damaged, rather than lost bean from these states from the forthcoming new crop.

Fortunately Brazil has a very large domestic coffee market that can presently absorbs approximately 20 million bags of coffee per annum and is a market that aside for quality coffees, also absorbs the price competitive lower grades.   Therefore one might speculate that damaged beans from this Broca problem shall have no real impact upon the export potential of the still undetermined in size new Brail crop and in this respect, the Broca infestation should have no influence upon market sentiment.

In the meantime there is nothing in the way of supportive fundamental news coming to the markets from any of the other main producer blocs which by nature of the silence, confirms that there are no concerns and aside from the prospects of a relatively modest new crop in Brazil this year, that overall world coffee production shall be good.   This good overall production is presently chasing a consumer market that is still showing some growth in terms of the second largest North American market and within the new markets in Asia, but countered by the dip in consumption within the largest European market and economic difficulties for Eastern Europe, which is likely to impact negatively upon consumption for this year.   

The arbitrage between the markets has narrowed yesterday to register this at 71.82 usc/Lb., while this equates to a relatively attractive 44.89% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,065 bags yesterday, to register these stocks at 2,275,456 bags.   There was meanwhile a larger in volume 3,213 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 2,880 bags.

The commodity markets were under pressure again yesterday and with the macro commodity index slipping further south, which is well illustrated by the fact that the Reuters Equal Weight Commodity index is now 132.32 points or 23.76% below peak in June last year.   Of course in terms of its weighted dominance, the reversal in the fortunes of commodities is heavily weighted towards the collapse of the Oil markets.   The Brent Oil, Cotton, Wheat and Soybean markets had a day of buoyancy, while the U.S. Oil, Cocoa, London robusta Coffee, Copper, Orange Juice and Corn markets had a softer day and with the Natural Gas, New York arabica Coffee, Gold, Silver and Platinum markets experiencing a very soft day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.69% lower; to see this Index registered at 424.48.   The day starts with the U.S. Dollar steady and trading at 1.508 to Sterling and 1.134 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 47.35 per barrel.

The London and New York markets started the day yesterday, on a softer note and within and environment of very thin and lacklustre trade as has been the case for the past few weeks during early trade, as players remain uncertain over the fortunes for the day once the Americans both north and south, enter the field of play.  As the afternoon progressed and with trade still thin, the New York market lost some more weight and followed by a softer stance being taken within the London market.    This set the markets on a solid negative track for the rest of the day and despite some support coming from opportunist industry price fixations, both markets continued to lose more weight.   The London market continued to end the day on a soft note and with 93% of the earlier losses of the day intact, while the New York market ended the day on a very soft note and with 85.6% of the earlier losses of the day intact.   This dismal close does little to inspire confidence and one might expect to see little better than a cautiously steady start for early thin trade today against the prices set yesterday, as follows:
   
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1921 - 42                                                         
MAR     1944 – 40                                               MAR     160.00 – 7.70
MAY     1972 – 40                                               MAY     162.75 – 7.65
JUL      1996 – 40                                                JUL      165.45 – 7.60
SEP      2017 – 40                                               SEP      167.95 – 7.50
NOV     2028 – 41                                                DEC     171.25 – 7.40
JAN      2038 – 41                                               MAR     173.60 – 7.20
MAR     2055 – 41                                               MAY     174.35 – 7.10
MAY     2074 – 41                                                JUL     174.50 – 7.10
JUL      2096 – 41                                                SEP     174.25 – 7.15

29th. January, 2015.
There has been a new Reuters Poll held on the basis of 13 traders and analysts and with a somewhat bullish outcome, in that the poll came out with a forecast that the New York market would end the year for the New York market at 198.00 usc/Lb. and the London market at US$ 2,115.00 per Mt.   These figures based on the averages for the new Brazil crop to come in at a modest 46.5 million bags and the recently completed Vietnam crop as having been 27.2 million bags, which would result in a deficit coffee supply of 6 million bags.  

It is however in terms of this poll still a relatively modest deficit and one that does not look to scare the international coffee industry, who would rather look to the very significant stocks that would very easily counter such a deficit and without doing much damage to world coffee stocks.  While in terms of the year end value for the market, one must consider that by the second half of the year the focus shall rather be on the prospects for the year end new Vietnam crop, the forthcoming new Colombian and Central American crops and the prospects for the follow on 2016 Brazil crop, which if looking good in numbers, would most certainly counter any bullish sentiment within the market and the related values of the markets.   

There were meanwhile during the afternoon yesterday, more rainfall reports for south eastern Brazil and reports that were talking in terms of good rains for the rest of the month, which would be followed by good rains for the first week of February.  These reports were accompanied by a comment from the U.S. Commodities Weather Group that while these rains might not be enough in some districts to achieve their monthly average rainfall in January, they would most likely be quite sufficient to maintain the steady development of the new coffee crop within these districts.  

With all the talk and focus having been on the rainfall for the south east of Brazil and the related main arabica coffee districts of the country, there has been little said about the conilon robusta districts further to the north east and the north west of the country.      In this respect there have been conilon robusta farmers in the costal state of Espirito Santo who have also been talking in terms of relatively dry weather of late, which might negatively affect their developing new crop.   But such comments have so far not been as loud as the comments coming forth from their southern neighbours within the arabica coffee districts and for the present and with rains also forecasted for Espirito Santo for the end of this month, such comments have so far had little impact upon market sentiment.  
 
The arbitrage between the markets has narrowed yesterday to register this at 77,71 usc/Lb., while this equates to a relatively attractive 46.34% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,200 bags yesterday, to register these stocks at 2,277,521 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,093 bags.

These modest certified stocks remain dominated by the 1,291,632 bags or 56.71% contributed by Mexico and Central America, which is followed by the 457,055 bags or 20.07% share held by coffees from Peru and the 321,788 bags or 14.13% share held by the African countries, Burundi, Rwanda, Tanzania and Uganda.    Added to this and somewhat minor players in terms of these stocks, Colombia contributes 142,732 bags or 6.27% and India 58,432 bags or 2.56% and Brazil 5,882 bags or 0.26% of the stocks.

However with price resistance prevalent within most of the internal markets within the arabica producing countries, there is little in the way of arabica coffee availability at prices low enough to make the price dictates of the New York market attractive enough to inspire tendering new coffees to this market, which has stalled any potential growth for these stocks.   However one would think that by the second quarter of this year and by which time there shall be clarity to the prospects of the new Brazil crop, that internal market selling aggression shall increase within many markets and export prices come closer to the price levels of the New York market, which might bring increased volumes of coffee to the related certified stocks.

The commodity markets were mostly soft yesterday and with the macro commodity index drifting lower through the day, with world economic data doing little to inspire confidence within most markets.  The Cotton and Copper markets did however show some modest buoyancy and the Sugar, London robusta Coffee and Gold markets were close to steady, while the Oil, Natural Gas, Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn, Soybean, Silver and Platinum markets were softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.81% lower; to see this Index registered at 431.77.   The day starts with the U.S. Dollar maintain its muscle and trading at 1.515 to Sterling and 1.128 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 46.25 per barrel.

The London market started the day yesterday on a softer note and followed by a degree of buoyancy for the New York market, with both markets maintaining this track into the afternoon’s trade, with the New York market shrugging off a dip south to maintain its modest gains.   However as the afternoon progressed the New York market once again dipped back, to join the London market in negative territory.   The downside for the markets was however limited and the London market continued to recover most of its losses to end the day on a near to steady note and having recovered 83.3% of the earlier losses of the day by the close, while the New York market ended the day on a marginally softer note and having recovered 80.8% of the earlier losses of the day by the close.   This marginally softer close but with the markets having shown a degree of stability is likely to set the markets for a hesitantly near to steady start for early thin trade today against the prices set yesterday, as follows:
   
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1963 + 4                                                          
MAR     1984 – 3                                                 MAR     167.70 – 0.50
MAY     2012 – 3                                                 MAY     170.40 – 0.50
JUL      2036 – 4                                                  JUL      173.05 – 0.45
SEP      2057 – 4                                                 SEP      175.45 – 0.45
NOV     2069 – 3                                                  DEC     178.65 – 0.45
JAN      2079 – 3                                                 MAR     180.80 – 0.45
MAR     2096 – 3                                                 MAY     181.45 – 0.50
MAY     2115 – 3                                                  JUL     181.60 – 0.60
JUL      2137 – 3                                                  SEP     181.40 – 0.75

28th. January, 2015.
With the month of January export registrations in hand; the Vietnamese authorities are estimating that due to slow internal market sales and the corresponding relatively high asking differential for new business on the part of exporters that the country’s exports for this month of mostly robusta coffees, shall be approximately 14.4% lower than the same month last year, at a total of 2 million bags.    This relatively poor seasonal export performance shall precede a potentially slow and relatively low volume month of February that is not only a short month, but shall include the week long Tet New Year holiday.

The latest rainfall reports from Brazil are seemingly indicating that rainfall for the leading arabica coffee state of Minas Gerais over the next two weeks, might only be 50% of average for this time of the year, but for the neighbouring prominent arabica coffee state of Sao Paulo, the rains might exceed the average rainfall for this time of the year.   These rainfall forecasts to come to the fore, following the past few days of scattered rains and further confirm that there is no reason to believe in any chance of a repeat of the partial drought conditions that were experienced during the first two months of last year, however the late in the day activity within the New York market did not indicated that these rains have completely dampened all of the speculative spirits within the volatile New York market.

However while the further rainfall reports from south eastern Brazil did not put further negative pressure upon the New York coffee markets, they contributed to a further dip within the soft sugar market, which is yet another commodity heavily influenced by the large sugar production areas in south east Brazil.   Albeit that that the negative nature of the sugar market is also being influenced by the prospects for increased export subsidies coming to the fore, for the Indian sugar industry.

The question for Brazil is however no longer the short term weather which is providing much needed rains to the main arabica coffee districts, but more so if these rains shall continue into a normal rainfall pattern for the second half of February and through to April, as following the relatively modest rains since the few weeks delayed start of the spring and summer rain season late in October last year, the new arabica coffee crop shall require a good end for the rain season, so as to guarantee a reasonable crop.    This new crop in terms of the arabica coffees, already expected to be relatively modest, albeit that most independent trade and industry forecasts do not believe in the dismal figures that are being indicated by the National Coffee Council in Brazil.

Nevertheless there remains uncertainty over the forthcoming new Brazil crop and even the bears within the market are apparently cautious over the prospects for medium term rains in Brazil and one would think that the downside potential of the market is somewhat limited, until there is more clarity over the rainfall for south eastern Brazil for the months of March and April.   Meanwhile the weather for all the other main producer blocs is proving to be positive for coffee production, with Central America, Colombia, Peru, Vietnam, Indonesia, India and Africa all reporting normal seasonal weather conditions, which should be positive for worldwide coffee production volumes from most producers, aside from Brazil.

The uncertainty over medium term Brazil weather does however continue to fuel a degree of internal market price resistance within most of the producer countries, as farmers and internal traders hold back for better value that might come to the market, should there be further problems for Brazil.   This is tending to buoy the export differentials from the majority of the producers and is dampening trade house spirits in terms of taking on stocks at relatively firm differentials, while the firm differentials do likewise inflate values to above tenderable levels and for the present there is little attraction to buy stocks to tender to the flat and relatively low in volume stocks being held against the terminal markets.

The arbitrage between the markets has broadened yesterday to register this at 78.07 usc/Lb., while this equates to a relatively attractive 46.41% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,511 bags yesterday, to register these stocks at 2,283,721 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,093 bags.

The commodity markets were mixed yesterday with trade in many markets being slowed by the lack of participation of a number of leading players in north east U.S.A., who were somewhat snowed in for the day, albeit that in the end the weather was not as severe as initially expected.  The slightly weaker U.S. dollar die however assist to buoy value in a number of markets, with the macro commodity index taking a positive track for the day.    The Oil, Natural Gas, Cocoa, Coffee, Cotton, Wheat, Gold, Silver and Platinum markets had a day of buoyancy, while the Sugar, Copper, Orange Juice, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% higher; to see this Index registered at 435.29.   The day starts with the U.S. Dollar steady and trading at 1.517 to Sterling and 1.136 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 46.85 per barrel.

The London market started the day yesterday on a softer note and followed by a steady start for the New York market, within an environment of hesitant and thin trade.    The New York market shrugged off some wobbles to enter the afternoon’s trade with buoyancy and joined by a recovery for the London market and with both markets trading on a positive sideways track as the afternoon progressed, but with trade remaining thin and lacklustre. This all changed however late in the day as the markets started to trigger buy stops and encountered little in the way of resistance and with further buy stops being triggered, to see both markets surge out of the days positive but narrow trading zone.   The London market ended the day on a positive note and with 87.5% of the gains of the day intact, while the New York market ended the day on a very positive note and with 95.5% of the gains of the day intact.   This positive close is constructive for the markets but unless there is early buoyancy in the usual thin morning trade, they might attract a degree of modest profit taking reversal against the firmer prices set yesterday, as follows:
   
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1959 + 35                                                         
MAR     1987 + 35                                               MAR     168.20 + 6.35
MAY     2015 + 34                                               MAY     170.90 + 6.35
JUL      2040 + 34                                                JUL      173.50 + 6.35
SEP      2061 + 34                                               SEP      175.90 + 6.35
NOV     2072 + 32                                                DEC     179.10 + 6.35
JAN      2082 + 32                                               MAR     181.25 + 6.20
MAR     2099 + 32                                               MAY     181.95 + 6.10
MAY     2118 + 32                                                JUL     182.20 + 6.25
JUL      2140 + 32                                                SEP     182.15 + 6.20

27th. January, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market decrease their net long position within this market by 2.36% in the week of trade leading up to Tuesday 20th. January, to see this long position turned into a net long that was registered at 13,977 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,329,500 bags has most likely been little changed during the period of mixed but overall steady trade that has since followed.

What is assisting the London robusta coffee market to hold its value is the value while the more volatile New York has been taking a softer stance against speculative negative pressure that has come with the Brazil rains, has been the price resistance being shown within the internal market in Vietnam for their new crop robusta coffees, which has limited to a degree the volumes of price fixation selling coming into play over the London market.   The question is however how long this resistance might continue, but while there is some competition coming to Vietnam from the new Indian robusta coffee and the new West African robusta crops the further competition from Uganda and Indonesia is only likely to start picking up in volume during the second quarter of this year, which might assist to see the London market remain relatively stable.    Albeit that if the New York market were to lose some more weight in the coming weeks against further rain reports from Brazil, the London market would most certainly shed some more modest weight in sympathy.

The week long Tet New Year Holiday (Tết Nguyên Đán) in Vietnam shall start on Sunday 15th. February and trigger the New Year of the Goat from Thursday 19th. February, but while traditionally the advent of this holiday has seen farmers become aggressive sellers of new crop coffees to finance their celebrations, this has not been the case for this year.   Farmers and internal traders fully aware of the short sold export commitments on the part of the mills and exporters are rather playing their stocks and holding back for higher relative value against the price dictates of the London market, which is likewise providing positive buoyancy for asking differentials from the exporters and tending to slow new business activity for the new crop robusta coffees.    These actions assisting to a degree, to be supportive for the London market at present, but there remains a chance that some of the less well financed farmers might look to become more aggressive sellers ahead of this all important family holiday period.

The latest forecasts from within Brazil and from some of the international meteorological centers and now talking of the present rains that are falling over the main arabica coffee districts in Brazil, to continue through to the end of the first week in February.   These are not however constant rains, but are nevertheless related to regular scattered showers and are expected to provide reasonable all over coverage for these coffee districts.  While the U.S.A. based Commodities Weather Group is also hinting at the rains most likely to continue through to the middle of next month.

These reports do most certainly confirm that the weather conditions in Brazil are not anything like the eight to nine weeks of mostly dry weather that was experienced for the first two months of last year, as in reality this year’s dry spell for these arabica coffee districts has been a relative modest three to perhaps four weeks for some districts and a spell that has mostly been bridged, by the ground water retention reserves that had been built up with the rains over the preceding two months.    Thus for the present, the Brazil weather and despite a number of reports that it is meaningless as the damage has already been done, has taken the wind out of the sails of the speculative bulls within the New York market.   

The arbitrage between the markets has narrowed yesterday to register this at 73.31 usc/Lb., while this equates to a relatively attractive 45.29% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,750 bags yesterday, to register these stocks at 2,286,232 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,093 bags.

The commodity markets were mixed yesterday but with many leading players located in the North East of the U.S.A. somewhat distracted by the oncoming weather issues, as a severe snow storm is now impacting upon the area and keeping many away from the desk.  The Oil, Sugar, London robusta Coffee, Cotton, Copper and Soybean markets had a day of buoyancy, while the Natural Gas, Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn, Gold, Silver and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% lower; to see this Index registered at 433.92.   The day starts with the U.S. Dollar steady and trading at 1.509 to Sterling and 1.23 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 45.85 per barrel.

The London market started the day yesterday on a steady to positive note, while the New York market started the day taking a thinly traded negative track.  The New York market did however as the markets entered the afternoon’s trade recover to join the London market in positive territory, but with trade remaining generally thin and lacklustre and seemingly lacking much in the way of industry participation.    The New York market did however come under some pressure as the afternoon progressed and head back to par, while the London market retained a degree of buoyancy.    The London market continued on its modest upside track for the rest of the day and ended the day on a positive note and with 84% of the gains of the day intact, while the New York market stuttered towards a marginally softer close but having recovered 64.7% of the earlier losses of the day by the close.   This mixed might well bring in some light producer selling and a softer start for the relatively firm London market but a cautiously slow sideways start for the New York market for early trade today, against the prices set yesterday, as follows;

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1924 + 21                                                         
MAR     1952 + 21                                               MAR     161.85 – 0.60
MAY     1981 + 21                                               MAY     164.55 – 0.60
JUL      2006 + 22                                                JUL      167.15 – 0.60
SEP      2027 + 22                                               SEP      169.55 – 0.55
NOV     2040 + 25                                                DEC     172.75 – 0.55
JAN      2050 + 26                                               MAR     175.05 – 0.40
MAR     2067 + 25                                               MAY     175.85 – 0.30
MAY     2086 + 23                                                JUL     175.95 – 0.35
JUL      2108 + 22                                                SEP     175.95 – 0.35

26th. January, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 10.52% in the week of trade leading up to Tuesday 20th. January;  to register a net long position of 24,718 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 8.21%, to register a net long on the day of 25,718 Lots.   This decrease on the part of the Index funds long positions, having been related to the tail end of the New Year fund rebalancing activity, which is correcting the relatively inflated value share that the commodity was holding within the overall funds positons.

During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 16.26%, to register a net long of 20,196 lots on the day.   This net long position that is the equivalent of 5,725,476 bags has most likely been marginally decreased over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds.

The pre-weekend weather reports from Brazil confirmed rains coming into the main arabica coffee districts within south eastern Brazil and with forecasts for the rains to continue during this week, while there are indications coming from some forecasts for rains to continue into early February.   These rains coming one would think just in time, to confirm that the arabica coffee weather for early this year shall not mirror the damaging partial drought that was experienced over the first two weeks of last year.

This does not however dampen the pessimistic spirits of the National Coffee Council of Brazil who came forth with their forecast that due to the past three weeks of dry weather and the resulting dry soils, that it shall have done irreversible damage to the prospects for the forthcoming new crop that is presently developing upon the trees.  With the comment that this damage makes the official government forecasts for a new crop of between 44.1 and 46.6 million bags far too optimistic and indicating that the National Coffee Council’s doing a new survey, which they do not expect to forecast the new crop at above 40 million bags.

This rather market supportive report from the National Coffee Council of Brazil provided some support for the waning spirits of the speculative bulls within the New York arabica coffee market on Friday, but one would think that it shall be very much questioned in the coming days and might not have sufficient muscle to do much more than bring some caution to the spirits of the speculative bears who have recently been taking the market on its recent softer path.   Especially so as while it has indeed been mostly dry and hot over most of the main arabica coffee districts for the first three weeks of the year, there would have been reasonable ground water retention levels inherited from the fair rains that were experienced over November and December.

Meanwhile with the Brazil Real having regained some muscle relative to the strong U.S. dollar over the past week, while the reference prices of the New York arabica coffee market has been on a decline, it has resulted in a degree of internal market resistance for new sales.  This having the effect of firming up the asking differentials for new business, but not to a degree that would indicate that farmers foresee a severely tightening longer term Brazil arabica coffees supply.   Which is a factor that would make one presume that the farmers whom one would be the best to assess the prospects for the forthcoming new crop, do not believe in the radically lower figures being forwarded by the Brazil’s National Coffee Council.

The arbitrage between the markets has broadened on Friday to register this at 74.86 usc/Lb., while this equates to a relatively attractive 46.08% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,835 bags on Friday, to register these stocks at 2,288,982 bags.   There was meanwhile a smaller in volume 640 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,093 bags.

The commodity markets were mixed on Friday, but with the overall macro commodity index tending easier for the day.   The Brent Oil, Natural Gas, New York arabica Coffee, Orange Juice and Corn markets had a day of buoyancy, while the U.S. Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Copper, Wheat, Soybean, Gold, Silver and Platinum markets tended softer for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.71% lower; to see this Index registered at 435.13.   The day starts with the U.S. Dollar tending firmer and trading at 1.501 to Sterling and 1.119 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 45.85 per barrel.

The London market started the day on Friday on a steady note and with the New York market showing some early buoyancy, in cautiously thin and lacklustre trade.   The remained the track into the afternoon’s trade but while the New York market retained it buoyancy while the afternoon progressed the London market started to lose its way and moved back into negative territory.    The London market continued on its sideways negative track to end the day on a softer note and with 66.7% of the earlier losses of the day intact, while the New York market added to its modest buoyancy in late in the day’s trade to end the day on a positive note and with 86.2% of the earlier gains of the day intact.    This mixed close and with little in the way of fundamental news other than rain reports from Brazil coming forth to fuel market sentiment is likely to inspire yet another slow and hesitant near to steady start for early trade today against the prices set on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1903 – 10                                                         
MAR     1931 – 10                                               MAR    162.45 + 2.50
MAY     1960 – 8                                                 MAY    165.15 + 2.50
JUL      1984 – 9                                                  JUL     167.75 + 2.55
SEP      2005 – 8                                                 SEP     170.10 + 2.60
NOV     2015 – 6                                                  DEC    173.30 + 2.70
JAN      2024 – 5                                                 MAR    175.45 + 2.70
MAR     2042 – 4                                                 MAY    176.15 + 2.65
MAY     2063 – 2                                                  JUL    176.30 + 2.65
JUL      2086 + 3                                                  SEP    176.30 + 2.60

23rd. January, 2015.
The Coffee Development Authority of Uganda have reported that the countries coffee exports for the month of December were 32,583 bags or 12.66% lower than the same month in the previous year, at a total of 224,803 bags.   This figure which follows a relatively lower export performance in November and a marginally better export performance in October last year has contributed to the cumulative exports from Uganda for the first three months of the present October 2014 to September 2013 coffee year having been 57,482 bags or 7.86% lower than the same period in the previous coffee year, at a total of 674,189 bags.

However in terms of value for these Ugandan coffee exports during the month of December which were made up from an 78.61% to 21.39% mix of robusta and arabica coffees, the value of the exports for the month were US$ 4,560,437 or 18.09% higher than the same month in the previous coffee year, at a total of US$ 29,778,184.   This improved value and despite the lower volumes of exports has contributed to the cumulative value of coffee exports for Uganda for the first three months of this present coffee year having been US$ 15,335,394 or 20.56% higher than the same period in the previous coffee year, at a total of US$ 89,941,011.

This improved income from coffee exports that within the free market nature of coffee farming and marketing environment within Uganda sees the majority of the value of sales ending up in farm hands, continues to encourage improved coffee production within the country and is very evident, by the areas of replanted coffee farms and new coffee trees being planted out within farms that had previously not planted coffee or had long since abandoned their coffee.   Thus while for this coffee year the countries coffee production is expected to match the previous coffee year’s production and bring forth approximately 3.6 million bags, the prospects are for improved levels of production for the coming years.   With the country very likely to see production start to return to the production levels of in excess of 4 million bags per annum that were experienced eighteen years ago.

The National Cocoa and Coffee Board of the Cameroon have reported that the countries robusta coffee exports for the month of December were 7,700 bags or 195.78% higher than the same month in the previous coffee year, at a total of 11,633 bags.   While they reported no arabica coffee exports for the month, from their much smaller arabica coffee share of total production.   Illustrated that while the Cameroon works on a December to November for robusta coffees it works on a more universal October to September coffee year for their arabica coffees and so far for this present October 2014 to September 2015 coffee year, the arabica coffee exports are so far only registered at 4,150 bags.

What is a concern for the coffee authorities in the Cameroon though, is the fact that this country which used to produce coffee crops of in excess of 2 million bags per annum 28 years ago, is that their production for the previous coffee year and made up from a 90 to 10 mix of robusta and arabica coffees was only a modest 364,650 bags, which illustrates the demise of this once significant player within the West African coffee producing bloc that has seen coffee production decrease by 73% over the last 28 years, while in the meantime over these 28 years the world production has registered an approximate 84% increase.    It is however not a situation unique to Cameroon but is a West African problem as the producer blocs leading player the Ivory Coast who are forecasted to produce a 1.9 million bags robusta coffee crop for the present coffee year, are presently producing annual coffee crops that are 55% lower than the coffee crops that they used to bring in 28 years ago.  

The arbitrage between the markets has narrowed yesterday to register this at 71.91 usc/Lb., while this equates to a relatively attractive 44.96% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,252 bags yesterday, to register these stocks at 2,291,817 bags.   There was meanwhile a larger in volume 2,060 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,453 bags.

The commodity markets were mixed again yesterday, but with the overall macro commodity index tending easier for the day.   The Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.70% lower; to see this Index registered at 438.26.   The day starts with the U.S. Dollar tending firmer and trading at 1.499 to Sterling and 1.133 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 47.10 per barrel.

The London market started the day yesterday on a relatively quiet and steady to softer note and followed by a steady to buoyant start for the New York market, but with both markets experiencing lacklustre trade and thin trade, while they maintained a similar through the into the early afternoon.   The more positive New York market came under some pressure to dip back into negative territory for short period and quite quickly recovered, while the London market maintained is steady to soft sideways track.   The New York market however came under late in the day speculative selling that was presumably encouraged by the combination of the negative nature of the macro commodity index, the Brazil rains and the stronger U.S. dollar, to see the market move back into negative territory and mirrored to a lesser degree, by the London market.   The London market continued to register a marginally softer close and with 40% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 83.9% of the losses of the day intact.   This soft close for the volatile New York market that is threatening to dip towards the next bout of speculative sell stops is likely to contribute towards cautious hesitancy but there might be some opportunist industry price fixation activity within early trade, to contribute towards a steady start for4 the day against the soft prices set yesterday, as follows:
 
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1913 – 4                                                           
MAR     1941 – 6                                                 MAR     159.95 – 1.30
MAY     1968 – 8                                                 MAY     162.65 – 1.30
JUL      1993 – 7                                                  JUL      165.20 – 1.25
SEP      2013 – 7                                                 SEP      167.50 – 1.15
NOV     2021 – 7                                                  DEC     170.60 – 1.15
JAN      2029 – 7                                                 MAR     172.75 – 1.25
MAR     2046 – 6                                                 MAY     173.50 – 1.25
MAY     2065 – 4                                                  JUL     173.65 – 1.20
JUL      2083 – 2                                                  SEP     173.70 – 1.55

22nd. January, 2015.
The cold front is moving north within south east Brazil and is heading into the main arabica coffee districts of the country, which is due to bring relief to the farmers who have seen their ground water retention levels declining over the past three weeks of hot and dry weather.   But more important as most likely there was enough moisture inherited from the preceding fair rains over November and December, to support the steady development of the maturing coffee cherries towards the coming new crop.  Meanwhile the rains are dampening speculative spirits for the present, within the New York arabica coffee market.

But perhaps more important for the consumer market industries in terms of the advent of the rains and the probability that there might be no further damage due for the forthcoming new crop, is that it shall inspire those farmers who have been holding back some reserve stocks to value add should there be damage and the resulting higher prices, to once again become more aggressive sellers.   Therefore to reduce the price resistance and price supportive activities within the internal market, which would by nature bring more and price competitive Brazil arabica coffees to the consumer markets.   While the resulting price fixation selling activity into the New York market, is likely to put some modest pressure upon the market.  

Agronomists from the National Coffee Federation in Colombia have cautioned that the probability of a mild El Nino developing within the Pacific Ocean and the resulting drier weather in the coming months for the countries coffee districts, shall make it important for farmers to start taking aggressive steps to control the threat of Broca or Berry borer beetle.   While in terms of Roya or Leaf Rust that develops during wet conditions, the prospects of drier weather are a positive factor and shall further limit its potential.   In this respect one must take note that over the past couple of years of improved controls, that Colombia boasts of the fact that Roya infestations within the Colombian coffee farms has been reduced by 85%, which is a success story that provides guidance for their neighbours in Central America.

The report does meanwhile stress that with the guidance of good agronomy support programs for the Colombian coffee farmers that these issues of insect and fungus controls are well in hand, while historically the periods of modestly drier weather have been related to better flowerings and larger crops.   Thus with the past few years of relatively aggressive farm replanting programs that has seen the average age of coffee trees within Colombian coffee farms reduced by 42% to an average of 7.2 years old and therefore much better yielding trees, one can feel some degree of confidence that unforeseen weather issues aside, that the annual crops shall continue to steadily increase over the next two to three years.

The new Central American crops that had experienced some cold and wet weather delays in cherry development and maturity late last year are now in full swing and with good volumes of new crop coffees being processed, but with still evidence of price resistance being experienced within the internal markets.  But one might question how long this can continue, as while farmers can take advantage of exporters having to pay up to cover their short sold nearby export commitments, there must certainly be a point were nearby supply shall exceed short term demand and one might expect this to start impacting upon the presently relatively firm export differentials from this important fine washed arabica coffee producer bloc.

The arbitrage between the markets has narrowed yesterday to register this at 72.94 usc/Lb., while this equates to a relatively attractive 45.23% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 207 bags yesterday, to register these stocks at 2,293,069 bags.   There was meanwhile a larger in volume 2,880 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 7,513 bags.

The commodity markets were mixed again yesterday, but with the dominant Oil markets that are heavily weighted within the mix showing some degree of buoyancy.  While the continued muscle being shown by the U.S. dollar continues to have an impact within many markets and with the European Central Bank expected to announce a more aggressive and Euro weakening quantitative easing package, the dollar can be expected to maintain its negative pressure within many fundamentally well supplied markets.   The Oil, Natural Gas, Sugar, Copper, Wheat and Platinum markets showed buoyancy and the London robusta Coffee, Orange Juice and Gold markets were near to steady, while the Cocoa, New York arabica Coffee, Cotton, Corn and Soybean markets tended softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.48% higher; to see this Index registered at 441.34.   The day starts with the U.S. Dollar relatively steady and trading at 1.513 to Sterling and 1.159 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 46.60 per barrel.

The London market started the day yesterday on a relatively quiet and steady note and followed by a steady to buoyant start for the New York market, but with both markets experiencing lacklustre trade and thin trade, while they maintained a positive stance through the early afternoon and with the New York market adding some additional value and posting 2.55 usc/Lb. gains for the day.   This positive stance was however unsustainable and the pathfinder New York market started to lose its way and with industry and speculative support thin, was pressured back into negative territory.  The relatively thinly traded London market followed this negative track but was able to attract support and limit its losses, while the New York market continued on its steady downside track.  The London market continued to end on a near to steady note and having recovered 66.7% of the earlier late in the day losses, while the New York market ended the day on a soft note and with 92.4% of the losses of the day intact.   This close and the lack of fundamental supportive news does little to buoy confidence and one might expect to see a steady to soft start for thin early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1917 – 1                                                           
MAR     1947 – 3                                                 MAR     161.25 – 3.05
MAY     1976 – 3                                                 MAY     163.95 – 3.05
JUL      2000 – 2                                                  JUL      166.45 – 3.00
SEP      2020 – 2                                                 SEP      168.65 – 3.00
NOV     2028 – 2                                                  DEC     171.75 – 3.05
JAN      2036 – 2                                                 MAR     174.00 – 3.30
MAR     2052 – 2                                                 MAY     174.75 – 3.55
MAY     2069 unch                                              JUL      174.85 – 3.65
JUL      2085 + 3                                                 SEP      174.85 – 3.65

21st. January, 2015.
The relatively high profile Brazilian trade house Comexim reported yesterday that with the have assessed the 2014 Brazil coffee crop to have been 48.45 million bags, which is a number that is very much in line with many other respected trade and industry reports.   Added to this they have assessed that the private cooperative, farm trade and industry stocks into this new crop and as at 1st. July last year, were 10.6 million bags and therefore indicating a coffee supply of 59.05 million bags and this aside from the 1.7 million bags of government coffee stocks.

These Comexim figure with an approximate combined domestic and export coffee demand of around 54 million bags per annum would indicate the potential for carryover coffee stocks into the new 2015 Brazil coffee crop of approximately 5 million bags and this aside from the additional 1.7 million bags of government stocks, which would further indicate that unless the new crop were to dip below 48 million bags, that Brazil coffee supply is potentially safe trough to the 2016 crop.   Thus with the prospects for rains to end of this month and with many still forecasting a new crop that shall exceed 48 million bags, the report tended to dampen some of the spirit of the speculative bulls within the New York market.

One might comment in terms of demand for Brazil coffees where the critical factor has been and continues to be the arabica coffee districts in south east Brazil, rather than the main conilon robusta coffee districts further to the north that have not suffered as much from the low rain factor, that the consumer market demand for Brazil arabica coffees is no longer as critical as it was over the past two years.   This year sees rising washed arabica coffee supply now coming in from Central America and Colombia and soon to be followed as the year progresses, by rising washed arabica coffee supply from Peru and thus the potential for the consumer markets to live with 2 to 3 million bags less Brazil arabica coffee supply for the year.

Thus with the evidence of good levels of consumer market coffees stocks, flat to even weakening demand from the Europe the largest consumer market and rising Latin American washed arabica coffee supply and still reasonable natural arabica coffee stocks within Brazil, there remain for the present little in the way of concern over longer term coffee supply on the part of the consumer market industries.   This is of course so long as there are no further weather problems for south eastern Brazil, to threaten and significantly lower the developing new Brazil arabica coffee crop potential and this can really only be known better by the end of next month and with the evidence of the January and February rains in hand.

Meanwhile more damaging to market confidence yesterday afternoon was a host of weather forecasts that are coming to the market that now not only indicate a wet end to the month for south east Brazil and following the three weeks of hot and dry weather, but some not talking of a wet start to the month of February.  These forecasts indicating that there is little chance to see a repeat of the partial drought that was experienced over the first two months of last year within south east Brazil and dampening the spirits of the speculative bulls within the more volatile and active New York market, which is now showing a degree of exhaustion.   

The arbitrage between the markets has narrowed yesterday to register this at 75.85 usc/Lb., while this equates to a relatively attractive 46.17% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,315 bags yesterday, to register these stocks at 2,293,276 bags.   There was meanwhile a larger in volume 3,738 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 10,393 bags.

The commodity market were mixed yesterday with the influential American players returning from their long weekend Martin Luther King holiday to the news of a twenty four year low in Chinese growth, albeit still nevertheless impressive growth due for this year.  While in terms of sentiment for the day there were many who were distracted by yesterday’s state of the nation address by the American President which did prove to be positive in terms of its confirmation of longer term positive growth for the U.S.A.   The Sugar, Wheat, Corn, Gold, Silver and Platinum markets had a day of buoyancy and the Orange Juice market was steady, while the Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper and Soybean markets had softer days trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.24% lower; to see this Index registered at 439.24.   The day starts with the U.S. Dollar relatively steady and trading at 1.517 to Sterling and 1.159 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 46.25 per barrel.

The London and New York markets started the day on a steady note and started to add value and take a positive track into the afternoon’s trade, but with volumes remaining relatively thin.  As the afternoon progressed however and with the Americans entering the field of play both markets came under seemingly speculative pressure and headed down into negative territory and with sell stops being triggered to both increase the volumes of trade and accentuate the losses.   The London market continued on a very much sideways track at its lower levels and the end the day on a soft note and with 67.7% of the earlier losses of the day intact, while the New York market that was suffering from both the negative influences of a softer macro commodity index and the Brazil rain reports dent to speculative confidence ended the day on a very soft note and with 93.7% of the earlier losses of the day intact.   This close has to be seen to be negative for sentiment and especially so with the Brazil rains now so close and one might expect to see little better than a cautious steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1918 – 21                                                         
MAR     1950 – 21                                               MAR     164.30 – 6.70
MAY     1979 – 20                                               MAY     167.00 – 6.65
JUL      2002 – 21                                                JUL      169.45 – 6.65
SEP      2022 – 21                                               SEP      171.65 – 6.45
NOV     2030 – 21                                                DEC     174.80 – 6.30
JAN      2038 – 19                                               MAR     177.30 – 6.05
MAR     2054 – 16                                               MAY     178.30 – 5.90
MAY     2069 – 16                                                JUL     178.50 – 5.90
JUL      2082 – 10                                                SEP     178.50 – 5.80

20th. January, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market increase their net long position within this market by 31.06% in the week of trade leading up to Tuesday 13th. January, to see this long position turned into a net long that was registered at 14,315 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,385,833 bags has most likely been little changed to perhaps register a marginal decrease during the period of mixed trade that has since followed.

This London robusta coffee market with the new Vietnam crop largely seen to have been steady to modestly smaller than the previous crop, is likely to shrug off the negative influences that come with the prospects for larger new robusta coffee crops due from Indonesia and India this year, along with modestly rising supply from Africa, as the main driver of growth in world consumption is heavily weighted towards the new markets and the relatively inexpensive robusta coffees.   However this does not detract from the fact that the London market with robusta coffee demand seemingly matching supply shall to a degree, continue to track the fortunes of the more volatile New York market.   This latter market presently shrugging off the negative influences of rising washed arabica coffee supply and perhaps even surplus washed arabica coffee supply, on the speculation for deficit new natural arabica coffee supply, which would come with another modest Brazil crop this year.

In terms of the prospects for the new Brazil arabica coffee crop which has been negatively affected by the stresses experienced within many coffee farms during the partial drought they experienced during the first two months of last year and followed by a late start to the present spring and summer rain season, there remain some concerns over the relatively modest rains experienced for the start of this year.   The latest forecasts do however talk of a new cold front and fair rains for most of the Brazil arabica coffee districts for the latter half of this week and through to the end of the month.

These rains that follow a couple of weeks of mostly hot and dry weather and are not expected to do much more than influence the rainfall for the month to be much more than 50% of the monthly average for the month, but they do nevertheless bring much needed moisture to the developing new coffee crop.   Thus while there are many that have suggested that the modest nature of these rains might have done some further damage to the new arabica coffee crop potential, the question is with at least fair ground water retention levels following the reasonable November and December rains if the two to three weeks of dry weather has in fact been damaging, which is a factor that took some of the wind out of the sails of the speculative bulls within the New York market at the end of last week.

But there is no question that the relatively dry January would have lowered ground water retention levels and that fair follow through rains shall be required during February in south east Brazil, if there is to be stability for the development of the new arabica coffee crop.   Thus while the New York market might have lost some of its steam, there is still the possibility for renewed volatility and buoyancy during the coming month, should hot and dry weather return and thus one might think, that there might be some degree of short term caution shown by the speculative sector of the market in the coming days, which may limit the downside potential for the market.

The arbitrage between the markets has narrowed yesterday to register this at 81.60 usc/Lb., while this equates to a relatively attractive 47.72% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 500 bags yesterday, to register these stocks at 2,291,961 bags.   There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 14,131 bags.

Many of the commodity markets were closed yesterday, with the observation of Martin Luther King Day in the U.S.A., which resulted in a long weekend for many market players.   Meanwhile with the world’s economic drivers distracted by the safari to Davos Switzerland for the World Economic Forum that shall take place over Wednesday to Saturday this week, one might expect that is shall prove to be something of a distraction in terms of fundamental influences within many markets.  The London robusta Coffee and Platinum markets showed buoyancy yesterday, while the Oil, Natural Gas, Sugar, Cocoa, Copper Gold and Silver markets tended softer.   With many markets closed the Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is unchanged; to see this Index registered at 444.74.   The day starts with the U.S. Dollar steady and trading at 1.508 to Sterling and 1.158 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 46.60 per barrel.

The London trading solo yesterday and following the soft end to last week for both markets, started the day yesterday on a thinly traded lower note.  This remained the track into the early afternoon trade, which remained lacklustre in nature, but with some degree of recovery coming into play later in the afternoon.  This saw the market recover its losses and move into modest positive territory and briefly build upon its gains, but soon encountering selling activity to pressure the market back towards par.   The London market continued to end the day with very modest buoyancy and with only 7.7% of the earlier gains of the day intact, which gives little guidance for sentiment and one might expect little better than a steady to soft start for early trade today against the prices set in London yesterday and New York on Friday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1939 – 2                                                           
MAR     1971 + 1                                                 MAR     171.00 – 5.65
MAY     1999 + 2                                                 MAY     173.65 – 5.65
JUL      2023 + 2                                                  JUL      176.10 – 5.60
SEP      2043 + 3                                                 SEP      178.10 – 5.65
NOV     2051 + 3                                                  DEC     181.10 – 5.55
JAN      2057 + 3                                                 MAR     183.35 – 5.55
MAR     2070 + 3                                                 MAY     184.20 – 5.65
MAY     2085 + 3                                                  JUL     184.40 – 5.50
JUL      2092 + 3                                                  SEP     184.30 – 5.45

19th. January, 2015.
The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net long position within this market by 12.05% in the week of trade leading up to Tuesday 13th. January;  to register a net long position of 27,623 Lots on the day.  Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 29.85%, to register a net long on the day of 28,017 Lots.   This latter sharp drop on the part of the Index funds long positions, having been related to the New Year fund rebalancing activity, which is correcting the relatively inflated value share that the commodity was holding within the overall funds positons.

During this same week of trade the Non Commercial Speculative sector of the market increased their net long position within the market by 57.76%, to register a net long of 24,117 lots on the day.   This net long position that is the equivalent of 6,837,063 bags has most likely been decreased over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds.

The National Export Council in Nicaragua have reported that the countries coffee exports for the month of December were 21,779 bags or 83.87% higher than the same month in the previous year, at a total of 47,746 bags.   This figure contributes to the countries cumulative exports for the first three months of the new October 2014 to September 2015 coffee year being 78,649 bags or 79% higher than the same period in the previous coffee year, at a total of 178,210 bags.

The Vietnam Customs authorities have reported that following coffee exports of mostly robusta coffees during the month of December of 1.92 million bags, the countries cumulative coffee exports for the first three months of the present October 2014 to September 2015 coffee year are 7% higher than the same period in the previous coffee year, at a total of 4,920,000 bags.    It is noted however that the exports in December have been reported and well below the forecasted expectations for exports for the month of between 2 million to 2.5 million bags, which perhaps is related to the present internal market price resistance that is being experienced within Vietnam, which is inflating asking differentials for new business and is slowing new business activity on the part of the international coffee trade.

The National Coffee Council in Brazil has reported on Friday that the latest new crop forecast by the National Crop Supply Agency CONAB has not really given sufficient consideration to the dry start to the month of January and that in reality, the new crop might be smaller than the 44.1 to 46.6 million bags CONAB forecast.   This report alike the CONAB report, does not take into account the very much discounted Conilon robusta coffee factor included within the overall figures and with this in mind, most private trade and industry players would already be adding at least 4 million bags and perhaps even more, to these quoted official figures.  

Adding to these further comments on the matter of Brazil weather was a report on Friday by the Brazilian Electrical Grid Operators in South East Brazil, who forecasted that they expect to see only 44% of the monthly average rainfall for their hydro power reservoirs during January.   This report by nature indicating the lower rainfall that could be expected for the neighbouring coffee districts, but one might comment that unlike last years’ experience of almost no rain in these districts in January, that there is at least some rain and one cannot repeat the drought talk of last year.   Thus one needs to show a degree of caution towards some of the more dramatic scare stories that are being voiced, over the negative weather effect upon the prospects for the new and relatively modest 2015 Brazil crop.

The arbitrage between the markets has narrowed on Friday to register this at 81.64 usc/Lb., while this equates to a relatively attractive 47.74% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 825 bags on Friday, to register these stocks at 2,292,461 bags.   There was meanwhile a larger in volume 4,196 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 14,131 bags.

The commodity markets were mixed on Friday, but with the recently battered Oil markets that are now trading well below cost for many leading producers, finally showing some modest reversal in their fortunes.  The Oil, Copper, Wheat, Corn, Gold, Silver and Platinum markets had day of buoyancy and the Orange Juice and Soybean markets were steady, while the Natural Gas, Sugar, Cocoa, Coffee and Cotton markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.56% higher; to see this Index registered at 444.74.   The day starts with the U.S. Dollar steady and trading at 1.514 to Sterling and 1.156 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 48.00 per barrel.

The London and New York markets started the day on Friday on a steady not in very thin trade, but with the markets tending marginally softer in hesitant, thin and lacklustre afternoon trade.    As the afternoon progressed and with the reports and forecasts for improved rains for south eastern Brazil for this week coming into play to dampen speculative spirits, both markets continued on a steady downside track for the rest of the relatively quiet days trade.   The London market continued to end the day on a soft note and with 70% of the losses of the day intact, while the New York market ended the day on a very soft note and with 90.4% of the losses of the day intact.     This soft close and with the further Brazil weather reports and forecasts only due later in the day, is likely to see the markets encounter thin and cautious near to steady activity for early trade today against the prices set on Friday, as follows:  

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1941 – 32                                                         
MAR     1970 – 28                                               MAR     171.00 – 5.65
MAY     1997 – 30                                               MAY     173.65 – 5.65
JUL      2021 – 30                                                JUL      176.10 – 5.60
SEP      2040 – 30                                               SEP      178.10 – 5.65
NOV     2048 – 31                                                DEC     181.10 – 5.55
JAN      2054 – 33                                               MAR     183.35 – 5.55
MAR     2067 – 33                                               MAY     184.20 – 5.65
MAY     2082 – 33                                                JUL     184.40 – 5.50
JUL      2089 – 33                                                SEP     184.30 – 5.45

16th. January, 2015.
The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 169,190 bags or 2.97% during the month of December, to register these stocks at 5,524,964 bags at the end of the month.   These stocks do not of course include the in transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is fed by these stocks of 490,000 bags per week, would conservatively have been at least 1 million bags.

Therefore if one is to consider the additional unreported stocks and look to end August stocks in North America of at the very least 6,524,964 bags, it would have equated to at least a very safe 13.3 weeks of roasting activity and still a safe reserve, ahead of the pending delivery of increasing volumes of new crop coffees from Mexico, Central America, Colombia and Vietnam.  These new crop coffees and however not expected to surge in supply, as the North American roasters alike the consumer industries worldwide, remain slow and steady buyers against what many predict to be a market that should the rains come in Brazil next week, might still lose some more weight.

One might further comment that with these 2014 year-end U.S.A. stocks seen to be a significant 438,246 bags or 8.62% higher than they were at the end of the previous year, the report is not really that supportive for market sentiment.   With only the uncertain and erratic weather issues within Brazil proving to be a factor that can counter the negative nature of the evidence of good consumer stock levels and potentially more than adequate coffee supply, from most of the producer blocs.

While their southern neighbours in Central America are all coming out of the past two years of severe problems from Roya or Leaf Rust and are looking to increased new crops from the harvest that is presently in progress, the Mexican National Coffee Association has reported that due to the devastating effects of the Roya infestation, they are looking at a the probability of an 12.8% to 17.9% lower new crop.    In this respect and with the new crop presently being harvested, they are forecasting a relatively modest new crop of between 3.2 and 3.4 million bags.   

This forecast is rather dramatically lower than the many trade and industry forecasts that have been talking a New Mexican crop of fine washed arabica coffee, which they expected to be well in excess of 4 million bags and likewise a past crop of in excess of 4 million bags.  While this Mexican National Coffee Association forecast and percentage dip, has been based on the past crop having been a lower figure of 3.9 million bags.   Thus one might suggest that with the rather high percentage drop that has been quoted, that it is likely that there might be some degree of market manipulation might be related to the forecast, which shall see the market players take a cautious wait and see stance towards this report.

The well respected Brazil analysts Safras & Mercado who have assessed the 2014 Brazil crop at 48.9 million bags, have estimated that by the end of last week 72% of the coffees from this new crop had been sold.   This is a significantly higher percentage than the 63% factor they applied for the same time last year from the previous crops coffees, which would indicate that this well sold factor shall see internal market selling activity start to slow for the first half of this year.   Thus lessening the price fixation selling activity on the part of Brazilian exporters, but perhaps to be replaced by similar activity on the part of exporters hedging their purchases out of the new crops in Mexico, Central America, Vietnam and India and thus, one would say the news is somewhat neutral to the market.

Somar Meteorologists in Brazil reported yesterday that they foresee hot and mostly dry weather for south eastern Brazil over the weekend and for the first couple of days of next week, but with rains to come during the second half of the week and through to the end of the month.   These are however very much catch up rains so to speak and the report forecasted that the January rainfall for many districts shall be 48% below average, but unlike last year where there was almost no rain for many of the districts.  Thus one might comment that there are at least some rains forthcoming and perhaps sufficient so long as rainfall over the coming two to three months is close to average levels, to ensure the steady development of the forthcoming new crop.  

But there is no guarantee that the rains in February shall be normal, as the U.S.A. based Commodity Weather Group has forecasted the potential for a hot and dry spell for south eastern Brazil for early February, but without any comment from thereon.    Thus one can foresee these issues of rain and the focus of the speculative trade shall remain upon the day by day weather reports out of Brazil, to maintain volatility within the New York market for the coming weeks.   

The arbitrage between the markets has narrowed yesterday to register this at 86.02 usc/Lb., while this equates to a relatively attractive 48.70% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,092 bags yesterday, to register these stocks at 2,293,286 bags.   There was meanwhile a similar in volume 2,028 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 9,935 bags.

The commodity markets were mixed yesterday, but with some relatively sharp moves either side of par encountered within many of the markets.    The Sugar, London robusta Coffee, Cotton, Copper, Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Cocoa, New York arabica Coffee, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.21% lower; to see this Index registered at 442.27.   The day starts with the U.S. Dollar steady and trading at 1.517 to Sterling and 1.163 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 48.10 per barrel.

The London and New York markets started the day yesterday on a positive note and with both markets building upon their gains as they entered the afternoon trade, but with the New York market losing its way as the afternoon progressed and shedding its gains, while the London market maintained the earlier in the days muscle.   The New York market dipped back into negative territory while the London market remained positive and post a brief recovery for the New York market, the track for the rest of the day was south and with the London market shedding most of its weight.  The London market continued to end the day on a modestly positive note but with only 13.5% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 68.8% of the losses of the day intact.    This close is unlikely to inspire much more than a steady start in thin and cautious trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1973 + 5                                                          
MAR     1998 + 5                                                 MAR     176.65 – 3.20
MAY     2027 + 3                                                 MAY     179.30 – 3.25
JUL      2051 + 4                                                  JUL      181.70 – 3.25
SEP      2070 + 4                                                 SEP      183.75 – 3.15
NOV     2079 + 4                                                  DEC     186.65 – 3.05
JAN      2087 + 4                                                 MAR     188.90 – 2.70
MAR     2100 + 4                                                 MAY     189.85 – 2.45
MAY     2115 + 4                                                  JUL     189.90 – 2.45
JUL      2122 + 4                                                  SEP     189.75 – 2.40

15th. January, 2015.
The government in El Salvador have voiced their intent to invest in support programs to assist approximately 30% of their coffee farmers and presumably the small scale farmers in this country that has its coffee industry dominated by relatively wealthy commercial farmers, to replant their farms with new disease resistant and higher yielding coffee trees.    These programs which follow the very successful examples of Colombia and Honduras and are similarly to Honduras a five year plan, are designed to see the country that has seen the recent problems of Roya or Leaf Rust dip their crop from 1.3 million bags to below 700,000 bags, target annual crops of in excess of 2 million bags in the coming years.

The speculative sector of the New York coffee market took the reins of market sentiment yesterday to lead the markets into a rally and see New York briefly head towards a six week high, as concerns over the dry weather in south east Brazil fuelled positive sentiment, with the London market following the track being set by the volatile New York market.    There was however late in the day a cap to the market that was attracting light producer price fixation selling, from index fund re-balancing selling and the markets settled back to set a more modest positive end to the day.

One must however question within what is presently a very emotive and volatile New York market, what might be the reaction to the forecasted rains for latter half of next week and thereon, into what is forecasted to be normal rainfall conditions in February.    With the potential with new crop coffee stocks now building up in Mexico and Central America and competing with Colombia for market share within the top end fine washed arabica coffee sector of the mainstream developed consumer markets, for more aggressive selling activity and the resulting price fixation selling into the New York market.   In this respect there is the potential for rains to trigger both speculative profit taking selling and to bring to the market more aggressive producer selling activity, but the biggest question is how much more traction might there be for the presently rising New York market and at what level it might be when it shall potentially hit a Brazil rain inspired tipping point.

Meanwhile within an environment of a significant downside track for the macro commodity index that is being effected by soft economic forecasts for the year and the renewed muscle of the U.S. dollar, the coffee markets are something of a solo star for the present and with the New York market as at yesterdays close having posted a 7.95% increase for the year, while the London market is a more modest 4.02% higher for the year.   This relatively good buoyancy that follows the coffee markets having been the best performer out of all markets in 2014 and based on the supportive fundamentals of Brazil weather, might still be vulnerable to a couple of months of fair weather in Brazil that would influence a degree of speculative exhaustion and catch up producer selling activity within the coffee markets.    Thus focus for the present is very much upon the day by day Brazil weather reports and forecasts.

The arbitrage between the markets has broadened yesterday to register this at 89.45 usc/Lb., while this equates to a relatively attractive 49.74% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,245 bags yesterday, to register these stocks at 2,291,194 bags.   There was meanwhile a larger in volume 14,265 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 11,963 bags.

The commodity markets encountered the somewhat negative news of the World Bank’s lowering of their forecast for global growth to 3% from 3.4% for 2015 and the 0.9% dip in U.S. retail sales for November last year, which both impacted upon prospects for softer demand.   But with most markets already well sold, these reports had little influence upon the overall flat and soft macro commodity index.  The U.S. Oil, Natural Gas, Sugar, Coffee, Orange Juice, Gold, Silver and Platinum markets showed buoyancy and he Cocoa market was near to steady, while the Brent Oil, Cotton, Wheat, Corn and Soybean markets had a softer day’s trade and the Copper market with a 5.77% loss for the day, was perhaps the headline market for the day.    The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% higher; to see this Index registered at 443.19.   The day starts with the U.S. Dollar steady and trading at 1.522 to Sterling and 1.176 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 48.05 per barrel.

The London and New York markets started the day yesterday on a positive note and with both markets building upon their gains as they entered more active afternoon and with the New York market leading the way to peak with a rather impressive 4.44% increase in value for the day, while the more stable London market followed a more steady upside track and peaked near to the close at a 1.58% gain in value for the day.   The New York market with the increased late in the day selling activity did however experience a negative correction to limit its gains but nevertheless maintained its overall positive stance, while the London market maintained its steady upside track.   The London market ended the day on a positive note and with 93.5% of the gains of the day intact, while the New York market ended the day on a positive note and with 36.9% of the earlier gains of the day intact.   This overall positive close is likely to inspire a degree of confidence and along with the thoughts that index selling activity is most probably concluded, to support a steady to perhaps buoyant start for early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1968 + 26                                                         
MAR     1993 + 29                                               MAR     179.85 + 2.90
MAY     2024 + 31                                               MAY     182.55 + 2.90
JUL      2047 + 30                                                JUL      184.95 + 2.80
SEP      2066 + 30                                               SEP      186.90 + 2.70
NOV     2075 + 28                                                DEC     189.70 + 2.70
JAN      2083 + 28                                               MAR     191.60 + 2.75
MAR     2096 + 26                                               MAY     192.30 + 2.80
MAY     2111 + 26                                                JUL     192.35 + 2.80
JUL      2118 + 26                                                SEP     192.15 + 2.70

14th. January, 2015.
The National Coffee Association of Guatemala have reported that the countries coffee exports for the month of December were 30,581 bags or 24.71% lower than the same month in the previous year, at a total of 93,191 bags.  This relatively modest performance that is related to the weather delayed new crop harvest and a consumer market price resistance to the relatively high asking prices for Guatemala coffees contributes to the cumulative coffee exports for the first three months of the present October 2014 to September 2015 coffee year being 75,658 bags or 27.17% lower than the exports for the same period in the previous coffee year, at a total of 202,786 bags.

Brazil’s official National Crop Supply Agency CONAB came forth with their latest coffee crop report and forecast yesterday, in which they have reported that contrary to many other market supportive suggestions, the rainfall for the countries coffee districts over November and December was sufficient to maintain ground water moisture levels for the coffee farms.    They did however state that the January rainfall reports shall need to be watched as they do have the potential, to have some impact upon the new 2015 coffee crop.

In terms of the new coffee crop they have forecasted the arabica coffee production to be marginally larger than their figure for the 2014 crop of 32.3 million bags, at between 32.5 million and 34.4 million bags.  While they have forecasted the conilon robusta production to be marginally lower than their figure for the 2014 crop of 13 million bags, at between 11.6 million and 12.2 million bags.    Therefore a new crop of between 44.1 million and 46.6 million bags, as against their assessment of last year’s crop having been 45.3 million bags.

At first sight this is a rather dismal crop forecast and potentially bullish in nature, but one has to seriously question the very modest conilon robusta coffee figure that is included within both their 2014 crop assessment and for the forthcoming new 2015 crop.  The usually very reliable trade and industry figures for the conilon robusta production in 2014 and supported by evidence of business concluded for these coffees since their harvest over March to June 2014, are that the crop was between 16.8 and 17.5 million bags.  While the forecasts by the trade and industry players are that the new 2015 crop shall most likely be close to these last figures.

Thus if one is to say work on a 17 million bags figure for conilon robusta coffees in 2014 and a 16 million bags figure for 2015, it would inflate their 2014 crop to 50.3 million bags and their minimum crop forecast for the 2015 crop to 48.5 million bags and their maximum forecast to 50.4 million bags.    These being numbers in terms of the still reasonable stocks of Brazil arabica coffees, that would not really threaten longer term Brazil coffee supply through to the 2016 Brazil crop.

But the question still remains over the prospects for rainfall over south east Brazil for the first quarter of this year, as this has to be cumulatively close to average levels, it the Brazil arabica coffee forecast of 32.5 million to 34.4 million bags is to be secure.  Thus while on analysis and adjustment for the conilon quantities this latest CONAB report would appear to be not very bullish for the market, the uncertain weather for the coming weeks would tend to make it  more neutral than bearish for short term market sentiment.

Vietnam’s week long Tet New Year holiday starts in four and half weeks’ time, with the countries commercial activities due to close for nine days from the 14th. February.   This holiday that shall celebrate the start of the Year of the Goat will however start to slow commercial activity a few days prior to the start of the holiday and traditionally within Vietnam the need to finance the holidays, it has encouraged more active selling of new crop coffee stocks in the weeks prior to it.   However this is seemingly not the case this year, as all evidence is that the farmers and internal market traders are showing price resistance to the robusta coffee prices that are being dictated by the London market and for the present, the export differentials out of Vietnam remain relatively firm.

Thus for the present new crop export selling activity is relatively lacklustre in nature, as the consumer market industries follow more a need to buy policy than taking a longer term premium differential cover for the Vietnam robusta coffee needs.   One might think though that in time and as and when the exporters have covered their short sold forward export commitments and are under less pressure to buy that it shall become more of a buyer’s market in Vietnam and that in time, once might expect to see export differentials soften a little bit.  But this is now looking to be more a medium term than a short term scenario and most probably more likely to occur for the second quarter rather than the first quarter of this year, by when Vietnam shall be actively competing with robusta coffee exports from Indonesia, India and Uganda.

The arbitrage between the markets has broadened yesterday to register this at 87.86 usc/Lb., while this equates to a relatively attractive 49.65% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,051 bags yesterday, to register these stocks at 2,285,949 bags.   There was meanwhile a smaller in volume 1,280 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,228 bags.

The commodity markets experienced another mixed day yesterday, but with the negative influences of the World Bank’s latest forecast that lowered world growth expectations for 2015, many markets remained on a negative track.  The Natural Gas, Sugar, New York arabica Coffee, Cotton, Orange Juice, Gold, Silver and Platinum markets showed buoyancy, while the Oil, Cocoa, London robusta Coffee, Copper, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.25% lower; to see this Index registered at 441.71.   The day starts with the U.S. Dollar steady and trading at 1.517 to Sterling and 1.179 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 45.25 per barrel.

The London market started the day yesterday shedding a little weight, while the New York market started on a steady note, but soon losing some value and joining the London market in negative territory.  Both markets lost more value as they moved into early afternoon’s trade, but with the markets recovering half of their early afternoon’s losses, as the afternoon progressed and the New York market finally breaking through to positive trade, while the London market remained below par.    The London market continued to end the day on a negative note and with 42.9% of the earlier losses of the day intact, while the New York market ended the day with modest buoyancy with only 9.3% of the earlier gains of the day intact.   This rather uninspiring close is likely to encourage little better than a near to steady start for early thin trade against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1942 – 11                                                         
MAR     1964 – 9                                                 MAR     176.95 + 0.20
MAY     1993 – 8                                                 MAY     179.65 + 0.25
JUL      2017 – 6                                                  JUL      182.15 + 0.30
SEP      2036 – 5                                                 SEP      184.20 + 0.35
NOV     2047 – 4                                                  DEC     187.00 + 0.35
JAN      2055 – 3                                                 MAR     188.85 + 0.30
MAR     2070 – 3                                                 MAY     189.50 + 0.15
MAY     2085 – 3                                                  JUL     189.55 + 0.05
JUL      2092 – 3                                                  SEP     189.45 + 0.10

13th. January, 2015.
The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market decrease their net long position within this market by 1.36% in the week of trade leading up to Tuesday 6th. January, to see this long position turned into a net long that was registered at 10,923 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 1,820,500 bags has most likely been little changed to perhaps register a marginal increase during the period of mixed trade that has since followed.

Supportive for the markets during the afternoon yesterday was a report from the Cocatrel Coffee Cooperative in the leading Brazilian arabica coffee state of Minas Gerais, which stated that following a meeting between fifteen cooperatives they estimate the coffee production in Minas Gerais might this year be as much as 20% less than last year’s already relatively modest deficit crop.    This modest forecast being based not only on the damage done to the potential of the coffee trees following the stress of the early in 2014 partial drought, but also upon the relatively modest rains experienced during the delayed start new spring and summer rain season.

In terms of this issue of Brazil rains over the main south eastern Brazil arabica coffee districts, the latest forecasts are talking in terms of many leading coffee areas within these districts likely to experience only around 50% of their monthly average rainfall.   With many of the districts already reporting very modest rainfall for the month so far and the potential that this scenario shall continue into the coming week, with the weather to only change during the second half of next week, when good widespread rains are presently forecasted to impact upon south eastern Brazil, but not in sufficient volume, to compensate for the relatively dry start to the month.

It has to be noted that these Brazil weather reports do most usually caution that the relatively dry weather for the start of the year is not a repeat of last year’s partial drought conditions, as there have been at least some light rains experienced over south east Brazil.   Thus highlighting that the present conditions are not a mirror of the previous year’s disastrous January and February partial drought and most certainly so with the late in the month rains being forecasted, but are more an indication of the more difficult conditions for new crop arabica coffee cherries to develop.  Therefore, only the potential for these lower moisture weather conditions to result in a higher percentage of smaller beans from this crop and a negative effect upon overall volume, rather than a dramatically lower crop.  

While not in any way striking new news the Brazilian Exporters Association highlighted yesterday that the countries green coffee exports for 2014 were 4.78 million bags or 17.02% higher than the previous year’s 28.08 million bags, at a total of 32.86 million bags.    This report is perhaps only significant in terms of the fact that it highlights that the consumer markets in terms of a potentially lower new Brazil crop, were only very recently able to live with a Brazil coffee supply of below 30 million bags per annum.    Thus in terms of the countries domestic coffee consumption of approximately 20 million bags per annum and the significant coffee stocks still in hand, the potential for a couple of million bags deficit crop this year, is something that the consumer markets could easily live with.   This report when it came to the board during the afternoon’s trade and following the month end rain reports from Brazil assisted to take some of the wind out of the sails of the speculative sector of the New York market.

The arbitrage between the markets has narrowed yesterday to register this at 87.26 usc/Lb., while this equates to a relatively attractive 49.37% price discount for the London robusta coffee market.   This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 526 bags on yesterday, to register these stocks at 2,288,000 bags.   There was meanwhile a similar in volume 550 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,948 bags.

The Certified robusta coffee stocks held against the London market were seen to increase by 61,667 bags or 2.92% over the two weeks of trade leading up to Monday 5th. January: to register these stocks at 2,171,333 bags on the day.  The New Year has however brought with it firming differentials within the internal market in Vietnam, which is inflating nearby robusta coffee prices and one would not expect to see for the short term, much in the way of growth potential for these stocks.

The commodity markets experienced another mixed day yesterday, but mostly towards the negative track for the day.   The Cocoa, London robusta Coffee, Orange Juice, Corn, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, New York arabica Coffee, Cotton, Copper, Wheat and Soybean markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.19% lower; to see this Index registered at 442.83.   The day starts with the U.S. Dollar steady and trading at 1.516 to Sterling and 1.182 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 45.90 per barrel.

The London market started the day yesterday with a degree of buoyancy and followed by a follow through from Friday firmer start for the New York market, with the markets gaining support from speculative weather concerns in Brazil and some cautious price fixation activity.   The markets maintained their positive track into the afternoon’s trade and with the New York market having peaked at a 4.85 usc/Lb. gain for the day, but started to shed some weight as the afternoon progressed and both markets slipped back towards par.   The New York market further suffered from a degree of exhaustion later in the afternoon, which saw the market move below par and start on a downside track, while the London market maintained some modest muscle for the rest of the day’s trade.   The London market ended the day on a positive note and with 26.3% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 69.5% of the losses of the day intact.    This mixed close and with the more speculative New York market having lost is positive traction during the day, is perhaps not going to inspire much better than a cautious near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.
                                                
JAN      1953 + 20                                                         
MAR     1973 + 10                                               MAR     176.75 – 3.30
MAY     2001 + 11                                               MAY     179.40 – 3.30
JUL      2023 + 13                                                JUL      181.85 – 3.30
SEP      2041 + 15                                               SEP      183.85 – 3.30
NOV     2051 + 17                                                DEC     186.65 – 3.30
JAN      2058 + 17                                               MAR     188.55 – 3.25
MAR     2073 + 17                                               MAY     189.35 – 3.25
MAY     2088 + 17                                                JUL     189.50 – 3.20
JUL      2095 + 17                                                SEP     189.35 – 3.20