22nd. May, 2015.
The markets took a bearish hit during trade yesterday, with the publication of the latest E D & F Man Volcafe quarterly Coffee Demand and Supply report, which indicated a modest surplus coffee supply for the forthcoming October 2015 to September 2016 coffee year.  The report firstly increased its earlier coffee supply for the present October 2014 to September 2015 coffee year by 1.6 million bags to 143.8 million bags, as against an estimated world coffee demand of 150.2 million bags and therefore, a 6.4 million bags deficit for the present coffee year.    This figure would be a relatively modest deficit, which shall be easily countered by the significant world coffee stocks and particularly within Brazil, at the start of the present coffee year.

But more bearish a factor in terms of the funds that look to the fore rather than the past, was the estimate that world coffee supply for the coming October 2015 to September 2016 coffee year shall rise to 154.5 million bags and even though they have forecasted a rising world coffee supply to total 153.2 million bags for this coming coffee year, it still indicates a forecasted surplus supply of 1.3 million bags.   Thus with the report hitting the commodity press, it proved to take the wind out of the sails of the speculative and technical sectors of the markets for later in the day trade.

In the meantime the new Brazil conilon robusta crop is peaking and the new arabica coffee harvest is starting to come into play, while in terms of weather there have been some incidences of scattered showers over the main arabica coffee districts in south east Brazil.   Thus it is very much business as usual and with the main coffee districts having experienced a couple of months of relatively good rains, the ground water retention levels are good and the trees well able to counter the stress of the cool and dry winter harvest season.   Thus for the present, there are no fears in place on the longer term prospects for Brazil coffee supply, so long as the next spring and summer rain seasons comes into play for the last quarter of this year and to set the next 2016 crop.

The Brazilian government, who have come under pressure from the coffee farmers lobby in recent weeks, have reversed their decision to allow the countries domestic roasters to import relatively high quality washed arabica coffees from neighbouring Peru.   The protests which were supported by the threat of importing coffee pests and diseases that might infest the Brazil coffee farms are perhaps more related to the farmers fearing competition for their monopoly position, in terms of coffee supply to the world’s second largest consumer market industries.  

The well respected United States Department of Agriculture Foreign Agricultural Service has forecasted that the Coffee production in Mexico which they had revised lower for the present October 2014 to September 2015 coffee year to 3.3 million bags, shall remain close to this figure for the next October 2015 to September 2016 coffee year.    They support this relatively modest figure that falls short of many trade and industry reports that talk in terms of the present coffee years output in Mexico of being in excess of 3.5 million bags, by noting that the countries farmers are still suffering from the Roya or Leaf Rust infestation.  

The arbitrage between the markets has narrowed yesterday to register this at 52.16 usc/Lb., while this equates to an attractive 40.61% price discount for the London robusta coffee market.  This arbitrage continues 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 18,414 bags yesterday; to register these stocks at 2,148,217 bags. There was meanwhile a smaller in volume 9,959 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 49,266 bags.

The commodity markets were mixed yesterday, but with the softer U.S. dollar assisting to inspire the overall macro commodity index to show a degree of buoyancy through the day.    The Oil, Natural Gas, Cocoa, Copper, Orange Juice, Wheat and Corn markets had a day of buoyancy and the Silver market was steady, while the Sugar, Cotton, Soybean, Gold and Platinum markets tended softer and the Coffee markets took a tumble for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.37% higher to see this Index registered at 433.73.  The day starts with the U.S. Dollar steady and selling at 1.569 to Sterling and 1.116 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 64.50 per barrel.   

The London and New York markets started the day yesterday on a steady note within and environment of thin and lacklustre trade and retaining a sideways track into the afternoon, but as the afternoon progressed and lacking much in the way of industry buying support, the markets started to drift marginally lower.  This however all changed post the latest bearish support from E D & F Man Volcafe, which inspired speculative selling and triggered technical and producer sell stops, to see both markets significantly pick up in volume and start to take a sharper downside track for the rest of the day’s trade.    The London market ended the day on a soft note and with 71.7% of the losses of the day intact, while the New York market ended the day on a very soft note and with 92.6% of the earlier losses of the day intact.   This dismal close and ahead of today being a slow day for many European players who shall already be looking towards Monday’s Whit Monday public holiday, is unlikely to attract much support and one might expect to see little better than a steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1644 – 43                                               
JUL      1682 – 43                                             JUL      128.45 – 7.55
SEP      1707 – 44                                             SEP     131.25 – 7.45
NOV     1728 – 43                                             DEC     135.10 – 7.30
JAN      1748 – 43                                             MAR    138.80 – 7.30
MAR     1771 – 40                                             MAY    141.00 – 6.95
MAY     1795 – 38                                             JUL      142.70 – 6.70
JUL      1816 – 35                                             SEP      144.25 – 6.40
SEP      1841 – 31                                             DEC     146.55 – 5.80
NOV     1870 – 15                                             MAR     148.85 – 5.35

21st. May, 2015.
Adding to the host of more positive crop forecasts for the new crop in Brazil this year, which is presently being harvested, was the comment from the vice president of Interagricola in Brazil and a company that is part of the international Ecom coffee trade house.   There was no specific number quoted, but they are of the opinion that due to improved weather conditions within Brazil over the past two and half months that the new crop is due to be higher than their 49.75 million bags forecast that they quoted in March this year.

This comment follows the recent forecasts of 50.3 million bags from Mercon, 51.9 million bags from E D & F Man Volcafe and 52.4 million bags from the USDA and by nature, the comment would indicated that Ecom now also foresee a new Brazil crop that is well above 50 million bags.   This Ecom comment indicates that once one accepts that Brazil shall not remain an aggressive export seller of their conilon robusta coffees over the medium term, that export and domestic demand for the coming year shall dictate that this new crop shall only be in deficit of two to three million bags.   A deficit that shall easily be countered by the carryover stocks that Brazil is taking into this new crop.

The well respected United States Department of Agriculture Foreign Agricultural Service has forecasted that the Coffee production in Colombia for the present October 2014 to September 2015 coffee year shall be 12.5 million bags, which shall rise to 12.7 million bags during the follow on October 2015 to September 2016 coffee year.   One might comment that this is a relatively conservative forecast, as there are already many forecasts that are talking Colombian production to soon be in excess of 13 million bags per annum.

The same USDA have forecasted that the coffee production and supply within Guatemala for the present October 2014 to September 2015 coffee year is 3% higher than the previous coffee year at approximately 3.5 million bags, with the prospects for this to rise to 3.6 million bags for the follow on October 2015 to September 2016 coffee year.   This recovery in the crop they say, being related to the maturity of the replanted trees and pruned trees, following the devastating Roya or Leaf Rust problems a couple of years ago.

The USDA have however in terms of El Salvador taken something of a negative note in that they have reported that while coffee production for the present coffee year is 24% higher than the previous coffee year at 624,000 bags, that due to continued problems of Roya or Leaf rust and biannual bearing factors, that the follow on October 2015 to September 2016 crop shall be significantly lower at approximately 351,000 bags.   These figures in terms of many other private trade and industry forecasts and the fact that El Salvador had already exported 377,725 bags of coffee within the first seven months of the present coffee year, could be seen to be rather conservative.   Likewise the forecast for such a dramatic decline for the follow on coffee year and thus it shall need to be a case of wait and see, if the forecasts are perhaps a little too negative in nature.  

The USDA have likewise been relatively conservative with their forecast for coffee production in India and have reported that they foresee that the countries coffee production for the forthcoming October 2015 to September 2016 coffee year shall be only marginally higher than production for the present coffee year, at a total of 5.2 million bags.   This view towards a similar to larger crop for the coming coffee year in India is one that is commonly shared by many earlier forecasts, which have recently come to the market.

The arbitrage between the markets has narrowed yesterday to register this at 57.76 usc/Lb., while this equates to an attractive 43.47% price discount for the London robusta coffee market.  This arbitrage continues 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 20,143 bags on yesterday; to register these stocks at 2,166,631 bags. There was meanwhile a smaller in volume 9,959 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,952 bags.

The commodity markets were mixed yesterday, with the firmer U.S. dollar having a negative impact within many markets.  Likewise the news that the manufacturing sector in China had contracted for the third straight month and therefore, puts in question the prospects of retaining in excess of 7% growth, on the longer term.   The Oil, Orange Juice, Wheat, Gold, Silver and Platinum markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, 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 0.07% lower to see this Index registered at 432.12.  The day starts with the U.S. Dollar steady and selling at 1.554 to Sterling and 1.111 to the Euro, while North Sea Oil is steady in early trade and is selling at 64.00 per barrel.   

The London and New York markets started the day yesterday on a steady to softer note within and environment of thin and lacklustre trade and retaining this marginally softer track into the afternoon, when there was a short lived recovery for the New York market that moved back into positive territory and with the London market returning to par.   The markets did however soon come under renewed pressure which was not helped by the latest Ecom Brazil news and both markets returned to negative territory.   The London market continued to end the day on a soft note and with 92.6% of the losses of the day intact, while the New York market likewise ended the day on a soft note and with 89.5% of the earlier losses of the day intact.  This softer close is likely 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.

MAY     1687 – 22                                               
JUL      1725 – 25                                             JUL      136.00 – 3.85
SEP      1751 – 25                                             SEP     138.70 – 3.65
NOV     1771 – 24                                             DEC     142.40 – 3.45
JAN      1791 – 23                                             MAR    146.10 – 3.30
MAR     1811 – 24                                             MAY    147.95 – 3.30
MAY     1833 – 25                                             JUL     149.40 – 3.30
JUL      1851 – 25                                             SEP     150.65 – 3.40
SEP      1872 – 25                                             DEC    152.35 – 3.55
NOV     1885 – 25                                             MAR    154.20 – 3.40

20th. May, 2015.
With the summer rain season having started to come into play in Vietnam and by nature indicating that there should be no fears of weather issues to damage the potential for a larger new robusta coffee crop being harvested in the last quarter of this year, one might speculate that it may start to inspire the price resistant farmers and internal traders to start being more accepting of the reality of the lower prices that are dictated by the reference prices of the London market.  Especially so now, as with the new and larger Indonesian crop is starting to come to the market, it shall potentially bring with it competition and force Vietnams farmers to be more aggressive in their selling activities so as to cash in some of their stocks.

The largest coffee cooperative in Brazil and the world Cooxupé have reported that some light harvesting of the new arabica coffee crop, with the harvest expected to pick up steam in June.   However based on the minimal so far harvested, they really are not in a position as of yet to start adjudging the cherry to yield outturns from the new crop.   This being a critical factor following the unseasonal dry conditions in South East Brazil over January and early February this year, which was a factor that contributed to speculation of severe damage to the new crop.

The forecasts for a dismal new arabica coffee crop for this year, has however been countered in the recent weeks, by a host of new forecasts for a better than initially expected new Brazil arabica coffee crop.   It is though only by July this year and with the new arabica crop harvest peaking, that more accurate assessments of the potential of this new arabica coffee crop can come to the market.  Albeit that true accuracy is only usually forthcoming on the longer term, but the evidence of the selling and export activity out of Brazil.   

The International Coffee Organisation have predicted that mostly due to deficit coffee supply from Brazil this year that global coffee supply for the forthcoming October 2015 to September 2016 coffee year shall likewise result in a deficit of approximately 4 million to 5 million bags, which shall see world coffee stocks reduced within the next coffee year.   It is however noted that the International Coffee Organisation is by nature obliged to work with the official crop reports from its member nations which are more often than not conservative in nature and therefore, one might presume that the deficit if any, shall be much more modest that this assessment of longer term coffee supply.

Taking into account the widely accepted lower Brazil conilon robusta coffee crop this year that is contrary to the many private trade and industry forecasts for a larger new Brazil arabica coffee crop, the Brazil Coffee Exporters Association have predicted that the country’s coffee exports for this year shall be 3.5% lower than last year at approximately 35 million bags.   This forecast that is generally agreed upon is however of no concern to the consumer markets as the dip is related only to the price competitive opportunist exports of conilon robusta coffees out of Brazil, which shall be easily countered by rising supply from the larger Indonesian robusta coffee crop that is now starting to come to the market, along with large volumes of unsold Vietnam robusta coffee stocks that still remain within farm hands.   

The well respected United States Department of Agriculture Foreign Agricultural Service have forecasted that due to improved weather the Ugandan coffee supply for the forthcoming October 2015 to September 2016 coffee year shall increase by over 7%, to 3.8 million bags.   While they have forwarded a longer term forecast and with the comment that with the combination of the prevailing Uganda Coffee Development Association and private industry support programs, that the Ugandan annual coffee production shall increase to approximately 4.5 million bags by 2018.

The United States Department of Agriculture Foreign Agricultural Service have also forecasted that the Tanzanian coffee production and coffee supply for the coming October 2015 to September 2016 coffee year shall improve by close to 20%, to 1.2 million bags.   While they have forecasted that the neighbouring Kenya coffee supply for this forthcoming coffee year shall remain steady, at approximately 900,000 bags.

The latest statistics from the Cameroun have confirmed a positive month of April for the country, with the robusta coffee exports for the month being 82,550 bags or 188.9% higher than the same month last year, at a total of 126,250 bags.   This being matched by the countries arabica coffee exports for the month being 5,450 bags or 140.94% higher than the same month last year, at a total of 9,317 bags.    

The arbitrage between the markets has narrowed yesterday to register this at 60.47 usc/Lb., while this equates to an attractive 43.24% price discount for the London robusta coffee market.  This arbitrage continues 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 930 bags on yesterday; to register these stocks at 2,186,774 bags. There was meanwhile a larger in volume 4,178 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 29,993 bags.

The commodity markets generally came under some pressure yesterday, with the improved economic data coming forth from the U.S.A. and with the corresponding firming of the U.S. dollar.   The Sugar and Orange Juice markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, Cocoa, Coffee, Cocoa, Cotton, 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 1.31% lower to see this Index registered at 432.43.  The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.550 to Sterling and 1.111 to the Euro, while North Sea Oil is steady in early trade and is selling at 63.30 per barrel.   

The London and New York markets started the day yesterday on a steady note, with the markets taking a generally slow and quiet sideways track and either side of par into the afternoon trade, but with the New York market starting to come under pressure from producer price fixation selling and heading into negative territory as the afternoon progressed and followed by a slide back to below par, for the London market.  This reversal of the fortunes for the markets along with the added negative influences of the softening of the overall macro commodity index set the track for the rest of the day’s trade, with both markets sliding lower as the day progressed.   The London market continued to end the day on a soft note and with 79.2% of the losses of the day intact, while the New York market likewise ended the day on a soft note and with 66.7% of the losses of the day intact.   This softer close and with the U.S. dollar continuing to show some muscle is likely 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.

MAY     1709 – 19                                               
JUL      1750 – 19                                             JUL      139.85 – 3.30
SEP      1776 – 19                                             SEP     142.35 – 3.30
NOV     1795 – 19                                             DEC     145.85 – 3.25
JAN      1814 – 18                                             MAR    149.40 – 3.20
MAR     1835 – 16                                             MAY    151.25 – 3.05
MAY     1858 – 16                                             JUL     152.70 – 2.95
JUL      1876 – 19                                             SEP     154.05 – 2.85
SEP      1897 – 19                                             DEC    155.90 – 2.75
NOV     1910 – 19                                             MAR    157.60 – 2.70

19th. May, 2015.
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net short sold position within the market by 29.71% over the week of trade leading up to Tuesday 12th. May;  to register a net short sold position of 10,077 Lots on the day.   Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 1.94%, to register a net long position of 26,429 Lots on the day.

Meanwhile the Non Commercial Speculative sector of this market increased their net short sold position within the market by 17.17% during the week of trade leading up to Tuesday 12th. May;  to register a net short sold position of 14,127 Lots, this net short sold position which is the equivalent of 4,004,942 bags has most likely been reduced over the period of mixed but overall generally positive trade that has since followed and likewise, the net short sold position of the Managed Money sector of the market.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market reduce their net long position within the market by 10.65% over the week of trade leading up to Tuesday 12th. May;  to register a net long of 15,945 Lots on the day.    This net long that is the equivalent of 2,657,500 bags has most likely been little changed over the period of mixed but overall sideways trade, which has since followed.

The United States Department of Agriculture Foreign Agricultural Service has forecasted that due to favourable weather conditions of late and with the new robusta coffee crop starting to be harvested, that the Indonesian coffee production and supply for the present April 2015 to March 2016 coffee year shall be approximately 24% higher than for the present coffee year.   In this respect they forecast that robusta coffee supply shall rise to 9.3 million bags and arabica coffee supply to 1.6 million bags and therefore, an overall crop of 10.9 million bags.  This positive crop report is very much in line with many other trade and industry forecasts, which likewise talk in terms of a 20% to 25% increase in Indonesian coffee production.

The report does highlight that in the meantime the Indonesian domestic coffee market is on a steady increase and is going to continue to increase the demands for coffee supply and to a degree dent the export potential, but make the point that the Indonesian domestic coffee industry is also an active importer of low priced coffees and therefore, assists to release more of the countries production for export.   Thus the report forecasts that Indonesian coffee exportable production shall rise for this April 2015 to March 2016 coffee year by 2,050,000 bags to total 7.8 million bags, while approximately 400,000 bags shall be imported to supplement the domestic industry demands.

There was a report from the Vietnam News Agency yesterday that quotes the Vietnam Coffee and Cocoa Association as having reported that the countries last harvest was 20% lower than the previous crop, as is evident from the sharp dip in coffee exports for the first four months of this year.   This is a dramatically higher dip than has been widely reported by the traditionally more accurate and reliable trade and industry players in Vietnam, who have been talking to date in terms of the crop having only been approximately 5% lower than the last crop.   As they do likewise report that the sharp dip in exports is entirely related to internal market price resistance over the past five months, which leaves a very high percentage of the new crop still within the hands of the farmers and internal traders.

The arbitrage between the markets has broadened yesterday to register this at 62.91 usc/Lb., while this equates to an attractive 43.95% price discount for the London robusta coffee market.  This arbitrage continues 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 545 bags on yesterday; to register these stocks at 2,185,844 bags. There was meanwhile a larger in volume 4,939 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,171 bags.

The commodity markets had another mixed day yesterday, with the starting to steady during the day, following the past week of weakness.  The Cocoa, London robusta Coffee, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy and the New York arabica Coffee had a Fund inspired very strong day’s trade, while the Oil, Natural Gas, Sugar, Cotton, 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 0.04% lower to see this Index registered at 438.19.  The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.566 to Sterling and 1.132 to the Euro, while North Sea Oil is steady in early trade and is selling at 65.10 per barrel.   

The London and New York markets started the day yesterday on a steady note, with the New York market taking marginally above par track and the London market a marginally below track, into the afternoon trade.   The New York market started to attract support as the afternoon progressed and with the Americans coming into work and industry price fixation buying not really encountering much in the way of producer price fixation selling volumes, which was assisted by a quiet start to the week in Brazil and the delayed Ascension Day holiday in Colombia.    This started the New York market on a steady upside track and assisting to inspire a move back into positive territory for the London market, while the recovery in New York started to trigger fund and industry buy stops and accentuate the gains in late afternoon trade.   The London market ended the day on a positive note and on its highs of the day, while the New York market ended the day on a strong note and with 95.1% of the earlier gains of the day intact.  This positive close is likely to inspire a steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1728 + 27                                             MAY     141.65 + 4.45  
JUL      1769 + 25                                             JUL      143.15 + 4.90
SEP      1795 + 26                                             SEP     145.65 + 5.00
NOV     1814 + 26                                             DEC     149.10 + 4.95
JAN      1832 + 26                                             MAR    152.60 + 4.95
MAR     1851 + 25                                             MAY    154.30 + 4.75
MAY     1874 + 26                                             JUL     155.65 + 4.50
JUL      1895 + 25                                             SEP     156.90 + 4.25
SEP      1916 + 24                                             DEC    158.65 + 4.25
NOV     1929 + 24                                             MAR    160.30 + 4.30

18th. May, 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 17.17% during the week of trade leading up to Tuesday 12th. May;  to register a net short sold position of 14,127 Lots, this net short sold position which is the equivalent of 4,004,942 bags has most likely been reduced over the period of mixed but overall generally positive trade that has since followed.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 168,969 bags or 3.36% during the month of April, to register these stocks at 5,204,078 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 500,000 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 6.2 million bags, it would have equated to at least a very safe 12.4 weeks of roasting activity and still a safe reserve, in terms of the potential for a continued steady flow of new crop coffees from Mexico, Central America, Colombia, Peru, Vietnam and Indonesia.   To soon be followed by the new crop coffees from Brazil, where all the latest forecasts are now pointing towards a much better than had initially been forecasted, new arabica coffee crop.

These latest forecasts for the new Brazil crop are now pointing to a new arabica coffee crop of between 35 million and 38 million bags and in terms of a Brazil domestic coffee industry that is based upon the use of approximately 13 million bags of conilon robusta coffees along with 7.5 to 8 million bags of arabica coffees, would indicate that there should be at least 27 million bags of new crop arabica coffees available for the consumer markets.    These new crop arabica coffees would be over and above an approximate 4 million to 5 million bags of carry over arabica coffee stocks, which would assist to ensure a steady Brazil arabica coffee supply through to the next 2016 crop.

There have already been some scattered rain showers encountered over the main coffee regions in Vietnam over the past few weeks, but now the Vietnam official weather forecasters have predicted that this week shall see the start of the main summer rain season that shall be wide spread over all of the coffee regions.    These rains much needed to save costs for the farmers who have over the past few months being making use of pumps to provide supplementary irrigation for their coffee trees, to ensure a good new crop harvest for the last quarter of this year.   This new crop that has so far been forecasted by many trade and industry players to be larger new crop of between 28 million and 30 million bags, which shall come into play over and above the potential for good carryover stocks that shall result from the prevailing price resistant activities of the farmers and internal traders, which has slowed the delivery of their new crop coffee stocks to the exporters.
 
The arbitrage between the markets has broadened on Friday to register this at 59.14 usc/Lb., while this equates to an attractive 42.78% price discount for the London robusta coffee market.  This arbitrage continues 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 2,564 bags on Friday; to register these stocks at 2,185,299 bags. There was meanwhile a larger in volume 3,763 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,110 bags.

The Certified robusta coffee stocks held against the London market were seen to increase by 43,500 bags or 1.49% over the two weeks of trade, leading up to Monday 11th. May: to register these stocks at 2,968,333 bags on the day.    This is a sharp rise from a year ago when the stocks were almost completely depleted and they have reached a level last seen in early 2012, but they are still well down from their levels between 2008 and their peak in 2011.    

The commodity markets had a mixed day on Friday, which was with many European players taking a long weekend break after Thursdays Ascension Day holiday, a relatively quiet day’s trade.  The Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Silver and Platinum markets had a day of buoyancy and the London robusta Coffee and Copper markets were near to steady, while the Oil, Orange Juice, Wheat, Corn, Soybean and Gold markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.13% lower to see this Index registered at 438.36.  The day starts with the U.S. Dollar near to steady and selling at 1.573 to Sterling and 1.144 to the Euro, while North Sea Oil is showing some buoyancy in early trade and is selling at 65.40 per barrel.   

The London and New York markets started the day on Friday on a relatively steady sideways track, but with both markets tending south of par in early afternoon trade and the New York market soon recovering into positive territory, while the London market maintained a softer stance.    The New York market continued to hold a positive stance through the day of relatively thin trade, while the London market was likewise lacklustre in nature and traded back up to close to par.    The London market ended the day on only a marginally softer note and having recovered 76.9% of the earlier losses of the day by the close, while the New York market ended the day on a modestly positive note and with 44.1% of the earlier gains of the day intact.   This relatively steady close along with an only near to steady U.S. dollar and a stronger Brazil real in play, is likely to inspire a cautiously steady thinly traded start for early trade today against the prices set on Friday, as follows:

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

MAY     1701 – 3                                               MAY     137.20 + 1.55  
JUL      1744 – 3                                               JUL      138.25 + 0.75
SEP      1769 – 2                                               SEP     140.65 + 0.70
NOV     1788 – 2                                               DEC     144.15 + 0.70
JAN      1806 – 2                                               MAR    147.65 + 0.65
MAR     1826 – 2                                               MAY    149.55 + 0.55
MAY     1848 – 2                                               JUL     151.15 + 0.40
JUL      1870 – 2                                               SEP     152.65 + 0.45
SEP      1892 – 2                                               DEC    154.40 + 0.55
NOV     1905 – 2                                               MAR    156.00 + 0.45

15th. May, 2015.
The respected Brazilian analysts Safras & Mercado have come forth yesterday with their new Brazil crop forecast at 50.4 million bags.  This made up from a new arabica coffee crop of 36.1 million bags and a new conilon robusta crop of 14.3 million bags.   This forecast is a little less than the recent United States Department of Agriculture forecast at 52.4 million bags, but is not very different from the recent trade forecasts that have been coming to the market.

This forecast in terms of expectations for less consumer market demand for the conilon robusta coffees for the coming year as consumers switch back to the good stocks of Asian robusta coffee, would indicate a deficit Brazil coffee supply of between 3 million to 4 million bags.   One that shall be countered by the carryover stocks that are expected to contribute to steady Brazil coffee supply through to the next 2016 crop, but when the stocks should be mostly depleted and thus dictating that this shall need to be a good crop next year.   A factor that shall have the market players keeping a close eye upon the weather conditions in Brazil in the last quarter of this year, which shall influence the prospects of this next crop.

Meanwhile it would seem that the markets have perhaps already discounted the fact that the new Brazil crop shall indeed be in excess of 50 million bags and the bout of reports as such, is having little impact upon the already relatively soft nature of the terminal markets.    Noting that the softening of the U.S. dollar that is heading into four month lows, has in terms of producer domestic prices softened farm gate coffee prices and is continuing to inspire a degree of price resistance and generally maintaining harder asking export differentials for new business.  

The Vietnam Customs have reported that the countries coffee exports of mostly robusta coffees for the month of April were 20% lower than the previous month, at a total of 1.73 million bags.    This modest volume they report has contributed to the country’s coffee exports for the first four months of this year being 40.7% lower than the same period last year, at a total of 7.95 million bags.  

This report and following the last harvest that is largely pegged at between 26 million and 27 million bags, is a further confirmation of the fact that farmers and internal traders are still holding on to significant stocks of unsold coffees.    These coffees shall eventually have to come to the market as there is medium term pressure coming with the advent of the next new and so far forecasted to be a larger new crop harvest, which shall start in five months’ time.

The National Weather Service’s Climate Prediction Centre in the U.S.A. has forecasted that the mild El Nino phenomenon in the Pacific Ocean shall most likely continue through to close to the end of this year, which will bring with it in terms of coffee, drier weather for the Pacific rim producers Colombia, Peru and Indonesia but that it is not a severe El Nino and should not be damaging for crop potential.   It does however traditionally in terms of its further afield influence most usually bring with it increased rainfall for south east Brazil, which is a positive factor for the next spring and summer rain season for the region, which should likewise be positive for the flowering and early development of the next 2016 Brazil coffee crop.   Therefore while it is a still a long way to the fore, the early indications are that there should be a good sized new Brazil coffee crop for next year.         

The arbitrage between the markets has broadened yesterday to register this at 58.26 usc/Lb., while this equates to an attractive 42.37% price discount for the London robusta coffee market.  This arbitrage continues 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 7,845 bags yesterday; to register these stocks at 2,182,735 bags. There was meanwhile a smaller in volume 3,779 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 42,873 bags.

The commodity markets had a mixed day yesterday against a steadier U.S. dollar and with trade often thinned by the absence of many leading players in Western Europe, who were taking the Ascension Day public holiday.   The Natural Gas, Cocoa, Coffee, Cotton, Wheat, Corn, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Sugar, Copper, Orange Juice and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.88% higher to see this Index registered at 438.95.  The day starts with the U.S. Dollar steady and selling at 1.576 to Sterling and 1.139 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 64.70 per barrel.   

The London and New York markets started the day yesterday in very thin trade on a steady note and followed this track into the afternoon, when the New York market started to come under some pressure and moved back into negative territory.   This was however short lived and with the Americans coming into work and bringing a bit more volume into play albeit still relatively thin trade, the New York market recovered into positive territory, which was followed by a more modest recovery for the London market.  The New York market maintained its recovery and took something of a sideways track for the rest of the day, while the London market continued on a modest upside track.   The London market ended the day on a positive note and closed the day at its high of the day, while the New York market ended the day on a positive note and with 75% of the gains of the day intact.   This overall positive close is likely to inspire a steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1704 + 23                                             MAY     135.65 + 1.25  
JUL      1747 + 23                                             JUL      137.50 + 2.10
SEP      1771 + 23                                             SEP     139.95 + 2.10
NOV     1790 + 23                                             DEC     143.45 + 2.05
JAN      1808 + 23                                             MAR    147.00 + 2.00
MAR     1828 + 23                                             MAY    149.00 + 1.90
MAY     1850 + 23                                             JUL     150.75 + 1.85
JUL      1872 + 23                                             SEP     152.20 + 1.70
SEP      1894 + 23                                             DEC    153.85 + 1.40
NOV     1907 + 23                                             MAR    155.55 + 1.20

14th. May, 2015.
The National Coffee Council in El Salvador have announced that the countries coffee exports for the month of April which work out at 11,898 bags or 18.44% higher than the same month last year, at a total of 76,418 bags.   This improved performance contributes to the countries cumulative coffee exports for the first seven months of the present October 2014 to September 2015 coffee year being 51,768 bags or 15.88% higher than the same period in the previous coffee year, at a total of 377,725 bags.

This cumulative coffee exports figure for El Salvador is however, marginally lower than the cumulative figure announced yesterday and would indicate that there has been some upward adjustments to the earlier month by month figures announced, as the National Coffee Council has now reported a cumulative export volume of 382,885 bags.  It is a figure that assists to confirm that the countries coffee production that suffered severely from the devastating problems of Roya of Leaf Rust is on a steady recovery track, with their new crop having been assessed at approximately 800,000 bags and potentially to well exceed this, for the next crop that shall start being harvested at the end of this year.  

The Colombian Coffee Federation have reported that their Chief Executive Officer Luis Genaro Munoz has resigned and shall vacate his post with almost immediate effect, by stepping down at the end of this month.   There is presently no replacement and the Federations Chief Operating Officer Luis Felipe Acero Lopez shall step in on a temporary basis, to lead the Federation until a new Chief Executive Officer is appointed.

This news is of little consequence in terms of the prevailing activities of the Federation that heads up the world’s third largest coffee producer and the world largest fine washed arabica coffee producer, but has some significance in terms of the reasons why Luis Genaro Munoz has resigned.  In this respect the indications are that he was objection to proposals to that Colombia starts to inspire farmers in the lower altitude plains to start farming other varieties of coffees that would by nature of their warmer climate result in higher yielding and lower quality coffees, which would detract from the reputation of the present high grown fine cupping coffees that come from Colombia.

Should these proposals now proceed and if so they would start to impact on the volumes of Colombian coffee supply only in a few years’ time, one would not foresee any problems to the reputation of Colombian coffee, as exporters and consumer market roasters would easily differentiate the different qualities.   However it would have a significant impact upon world coffee supply, should Colombia that is already with its high altitude farm rejuvenation program on track towards annual crops of close to 15 million bags, further proceed to expand its coffee farming and hectares into these new lower altitude regions.

The Vietnam state run Agribank has announced that they are prepared to offer soft loans to coffee farmers to assist them to replace aged coffee trees with new trees, at a maximum 7% interest rate and approximately 30% lower than the prevailing interest rates available to the farmers.   This announcement related to the assessment that approximately 30% of the country’s coffee trees are now over twenty years old and that to ensure Vietnams longer term consumer market share from annual crops that presently average 28 million bags, they would need to support farmers to maximise longer term yields.   

The arbitrage between the markets has broadened yesterday to register this at 57.20 usc/Lb., while this equates to an attractive 42.25% price discount for the London robusta coffee market.  This arbitrage continues 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 4,487 bags yesterday; to register these stocks at 2,190,589 bags. There was meanwhile a smaller in volume 2,341 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,094 bags.

The commodity markets once again selectively experienced a degree of buoyancy yesterday, in line with the softening U.S. dollar which is reacting to soft economic data and the speculation that there shall not be a nearby rising of the dollar interest rates.   The Oil, Natural Gas, Cocoa, Cotton, Corn, Soybean, Gold, Silver and Platinum markets had day of buoyancy and the New York arabica Coffee market was steady, while the Sugar, London robusta Coffee, Copper, Orange Juice and Wheat markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.36% higher to see this Index registered at 435.10.  The day starts with the U.S. Dollar tending softer and selling at 1.575 to Sterling and 1.140 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 65.50 per barrel.   

The London and New York markets started the day yesterday showing a degree of buoyancy and maintained a relatively positive track into the afternoon trade, when the New York market started to come under pressure and slipped back into negative territory, while the London market remained relatively steady.    The New York market started to lose more value as the afternoon progressed and seemingly had it influence upon the London market, which slipped back into modest negative territory.    The New York market did however and with the supportive sentiment that came with positive nature of the overall macro commodity index bounce back from its lows and head back on a steady upside track towards par and followed partially, by the London market.     The London market ended the day on a marginally softer note and having recovered 53.3% of the earlier losses by the close, while the New York market ended the day on a near to steady note and having recovered 96.1% of the earlier in the day losses by the close.   This somewhat positive close is somewhat supportive for sentiment but with most of the leading Western European countries on their Ascension Day holiday today and therefore leading industry buyers off the field of play, one might not expect to see much better than a thinly traded steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1681 – 7                                               MAY     134.40 – 0.10  
JUL      1724 – 7                                               JUL      135.40 – 0.10
SEP      1748 – 8                                               SEP     137.85 + 0.05
NOV     1767 – 8                                               DEC     141.40 + 0.20
JAN      1785 – 8                                               MAR    145.00 + 0.15
MAR     1805 – 8                                               MAY    147.10 + 0.15
MAY     1827 – 8                                               JUL     148.90 + 0.20
JUL      1849 – 8                                               SEP     150.50 + 0.15
SEP      1871 – 8                                               DEC    152.45 + 0.25
NOV     1884 – 8                                               MAR    154.35 + 0.30

13th. May, 2015.
Following the report yesterday from the Brazil Government Statistics Agency IBGE that the new Brazil crop shall be a modest 42.4 million bags, the well-respected United States Department of Agriculture Foreign Agriculture Service have come forth with their latest Brazil coffee report and have forecasted that the new crop that is presently starting to be harvested, to be 52.4 million bags.   This forecast tops the recent trade house forecasts from Mercon and E D & F Man that have forecasted the new Brazil crop at 50.3 million bags and 51.9 million bags, respectively.   While with the official Brazilian forecasts traditionally seen to be overly conservative in nature, one would say that the USDA forecast shall be the one that will have the most influence upon sentiment.

Where this latest USDA forecast significantly differs from all the earlier forecasts that have been coming to the market, is that the relatively impressive overall volume is related to a sharp rise in the arabica coffees that they say is due from this new crop, which they have pegged at 38 million bags.   While in terms of the conilon robusta coffee share, they foresee this to be very much in line with many other forecasts at 14.4 million bags.

The significance of this forecast one would say is that it is Brazil arabica coffee production that is critical to consumer market supply, as while the past year and following last year’s good conilon robusta harvest that many had pegged at between 17 million and 18 million bags has assisted to buoy Brazil overall coffee export volumes, the exports of conilon robusta were more price competitive against the Asian robusta coffees advantageous sales than fuelling specific consumer market demand.   Whereas the more specific consumer market in terms of quality demand for Brazil coffees is directed towards the countries natural arabica coffees, which are a base coffee for a host of leading brands.

Thus is one is to believe the recent trade and USDA Brazil forecasts and take into account that there are still reasonable levels of carryover stocks of Brazil arabica coffees from last year in hand, it would further indicate that there shall be no shortage of Brazil arabica coffee supply through to the next 2016 crop.   Whereas in terms of the indicated smaller supply of conilon robusta coffees from Brazil for the next twelve months, this shall be replaced by Asian robusta coffees within the consumer markets and shall not with the good supply from Asian, dent overall consumer market robusta coffee supply.    Thus for the present, the Brazil news is tending to fuel bearish sentiment within the markets.

In terms of the rising support for sustainability certified coffee brands within the main North American and Western European consumer markets which dominate the use of such branding, the 4C Association have reported that close to 10 million bags of 4C certified coffees were shipped to the consumer markets during 2014.    This figure would be equate to approximately 15% of Western European and North American coffee demand and with the 4C Certified coffees coming in alongside and in addition to the popular Rainforest Alliance, Utz Certified and Fairtrade certified coffees, it is an indicator of the rising dominance of sustainability certified coffees within the traditional coffee markets.   Noting that aside from these more public certified coffees, that there are also the in-house certification brands that are being promoted you leading international brands such as Starbucks and Nespresso and one would suggest that sustainability branding is already starting to dominate shelf space within these main and higher value consumer markets and by nature, shall inspire development 100% sustainability branding of coffee within these markets.  

The arbitrage between the markets has broadened yesterday to register this at 56.98 usc/Lb., while this equates to an attractive 42.05% price discount for the London robusta coffee market.  This arbitrage continues 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 1,405 bags yesterday; to register these stocks at 2,195,076 bags. There was meanwhile a larger in volume 3,046 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,753 bags.

The commodity markets selectively experienced a degree of buoyancy yesterday, in line with the unsteady U.S. dollar.   The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Copper, Wheat, Corn, Gold and Silver markets had a day of buoyancy and the Platinum market was steady, while the London robusta Coffee, Cotton, Orange Juice and Soybean markets bucked the trend and had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.76% higher to see this Index registered at 433.53.  The day starts with the U.S. Dollar tending marginally softer and selling at 1.568 to Sterling and 1.126 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 66.05 per barrel.   

The London and New York markets started the day yesterday on a steady track and with both markets showing a degree of erratic buoyancy into the afternoons trade, when the New York market added some value, while the London market struggled to remain on par.   The New York market came under pressure as the afternoon progressed and both markets moved back into negative territory, but while the New York market and with some assistance from the positive nature of the macro commodity index moved back into positive territory, the London market remained south of par.   The London market continued to end the day on a modestly softer note and with 76.5% of the losses of the day intact, while the New York market ended the day on a positive note and with 56.1% of the earlier gains of the day intact.  This mixed close is not convincing and one might expect that with the added negative influences of the USDA Brazil crop report, that it might inspire little better than a steady to soft start for early trade today against the prices set yesterday, as follows:

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

MAY     1688 – 13                                             MAY     134.50 + 1.15  
JUL      1731 – 13                                             JUL      135.50 + 1.15
SEP      1756 – 12                                             SEP     137.80 + 0.90
NOV     1775 – 11                                             DEC     141.20 + 0.70
JAN      1793 – 11                                             MAR    144.85 + 0.65
MAR     1813 – 9                                               MAY    146.95 + 0.55
MAY     1835 – 9                                               JUL     148.70 + 0.40
JUL      1857 – 11                                             SEP     150.35 + 0.35
SEP      1879 – 9                                               DEC    152.20 + 0.25
NOV     1892 – 9                                               MAR    154.20 – 0.10

12th. May, 2015.
The latest report from the London robusta coffee market has seen the speculative Managed Money Fund sector of this market increase their net long position within the market by 11.24% during the week of trade leading up to Tuesday 5th. May; to register a net long of 18,233 Lots on the day.   This net long which is the equivalent of 3,038,833 bags is most likely little changed to marginally higher, over the period of mixed trade that has since followed.

We need to update and with our apologies for any misleading information provided, our coffee export figures for Guatemala that were reported last week, as our figures quoted last week did not include the countries coffee exports for the last five days of the month and apparently, a very active week.   Thus we now report that The National Coffee Association in Guatemala have reported that the country’s coffee exports for the month of April were 35,281 bags or 8.85%% lower than the same month last year, at a total of 363,357 bags.   This figure and following a slow start to their coffee year so far, contributes to the cumulative coffee exports for the first seven months of the present October 2014 to September 2015 coffee year being 261,448 bags or 15.81% lower than the same period in the previous coffee year, at a total of 1,392,258 bags.

The news that the Vietnam Coffee and Cocoa Association and the Association of Indonesian Coffee Exporters and Industries have signed a Memorandum of Understanding to share marketing information and technical information on coffee is unlikely to have any impact upon the longer term prices of Asian coffees, as the markets are competitive and there is little that producers can affordably or realistically do to influence the free market trends.   It is however a potentially very positive development, in terms of production levels for Indonesia who have much to learn from the past two decades of successes in the field in Vietnam.

The reality is that with robusta farmers in Vietnam proving to have in many instances up to triple the yields of their counterpart robusta coffee farmers in Indonesia, that there is considerable potential for Indonesia to more than double their robusta coffee yields over the next decade.   The Indonesian farmers so long as there are no disruptive weather problems in play can presently expect to produce in excess of 10 million bags of robusta coffee per annum and therefore, one can foresee the potential longer term production that might be possible if they are to learn from their new found friends in Vietnam.

The Coffee Exporters Association in India have reported that due to good rains since March this year that the countries year end new arabica coffee crop might be expected to be 20% higher for the forthcoming October 2015 to September 2016 coffee year, at a total of 1.8 million bags.   These rains they say shall also be beneficial for the support of the trees for the follow on next robusta crop to be at similar levels to this year, which has been estimated at approximately 3.86 million bags.   Albeit that many private trade and industry reports have already assessed this year’s Indian robusta coffee crop as being in excess of 4 million bags.   

Major players within the domestic roasting industry have welcomed the decision by the Brazil government to allow for imports of coffees from neighbouring Peru, which would add the ability to bring variety to their consumer blends by the inclusion of fine washed arabica coffees from Peru.   The Brazil market is however relatively price sensitive and one might not think that despite Peru not bringing in a larger new crop, that this shall relate to significant volumes of Peruvian coffees coming into Brazil and to free up new crop volumes of Brazil coffees to contribute to the Brazil coffee exports.   
 
The arbitrage between the markets has broadened yesterday to register this at 55.24 usc/Lb., while this equates to an attractive 41.12% price discount for the London robusta coffee market.  This arbitrage continues 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 425 bags yesterday; to register these stocks at 2,196,481 bags. There was meanwhile a larger in volume 4,287 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,799 bags.

The commodity markets once again lost much of their lustre yesterday, with the overall macro commodity index tending softer through the day.   The Sugar and Cocoa markets had a day of buoyancy, while the Oil, Natural Gas, 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 0.53% lower to see this Index registered at 430.26.  The day starts with the U.S. Dollar tending marginally softer and selling at 1.557 to Sterling and 1.117 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 63.25 per barrel.   

The London market started the day yesterday with some early buoyancy and the New York market taking an erratically steady track, but with both markets entering the afternoon trade on only a hesitantly steady track and with both markets losing a little weight, as the afternoon progressed.    The London market proceeded to register further losses through the afternoon, but with some degree of recovery for the markets by the close, albeit that the weakening of the Brazil Real that is now trading at 3.05 to the U.S. dollar and by nature of its value threatening increased Brazil selling, is tending to dampen spirits.   The London market ended the day on a soft note but having recovered 56.2% of the earlier losses of the day by the close, while the New York market while closing on a marginally softer note, had recovered 86% of its earlier losses of the day by the close.   The ability of both markets to bounce off their lows yesterday might inspire a degree of confidence and assist to inspire a steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1701 – 16                                             MAY     133.35 + 0.45  
JUL      1744 – 14                                             JUL      134.35 – 0.30
SEP      1768 – 16                                             SEP     136.90 – 0.45
NOV     1786 – 15                                             DEC     140.50 – 0.60
JAN      1804 – 14                                             MAR    144.20 – 0.65
MAR     1822 – 16                                             MAY    146.40 – 0.60
MAY     1844 – 16                                             JUL     148.30 – 0.55
JUL      1868 – 16                                             SEP     150.00 – 0.55
SEP      1888 – 16                                             DEC    151.95 – 0.65
NOV     1901 – 16                                             MAR    154.15 – 0.65

11th. May, 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 23.86% during the week of trade leading up to Tuesday 5th. May;  to register a net short sold position of 12,056 Lots, this net short sold position which is the equivalent of 3,417,823 bags has most likely been little changed over the period of softer but finally recovered to overall sideways trade that has since followed.

The Association of Coffee Exporters in Brazil have announced their more detailed April export figures which indicate that green coffee exports for the month were 84,518 bags or 3% lower than the same month last year, at a total of 2,733,379 bags.  Added to this they have reported that the countries value added soluble coffee for the month and calculated in terms of their green coffee equivalent were 34,820 bags or 11.6% lower than the same month last year, at a total of 300,138 bags.   

This would result in the combination of green coffee and value added soluble exports for the month being 119,338 bags or 3.83% lower than the same month last year, at a total of 2,998,697 bags.   However perhaps more important to note is the fact that the value of the country’s exports were 40.2 million U.S. dollars or 7.44% lower than the same month last year, at a total of 500.2 million U.S. dollars.

This is a matter of some concern that the soft market is catching up with Brazil and the forward sales are no longer buoying values of exports, which is resulting in the loss of value starting to exceed the volumes of coffee exports.   However fortunately for the country’s coffee industry in terms of the farm gate values that might be related to the soft coffee exports, there has been the life vest that has come with the softer value of the Brazil Reais which was trading at around 2.23 to the U.S. dollar in April 2014 and at around 3.03 during April 2015.    This would put the value of the April 2015 Brazil coffee exports in terms of Brazil Reais terms 25.77% higher than the same month last year, despite the lower volume, albeit that inflation within Brazil that is presently running at a rate of over 8% per annum is eating into this advantageous exchange rate insurance against softer international coffee prices.   

The International Coffee Organisation have meanwhile reported that Brazil’s coffee exports for the period from April 2014 to March 2015 were 4.1 million bags or 12.54% higher than the same period in the previous twelve months, at a total of 36.8 million bags.   Therefore with the added domestic consumption figure of possibly as much as 21 million bags, a coffee disappearance of in excess of 57.5 million bags over the period and a factor that would have in terms of the modest 2014 deficit crop, have significantly reduced the country’s coffee stocks.

The big question remains what were these stocks as if one is to apply the trade and industry assessments of the last 2014 crop that generally talk in terms of a crop of approximately 48 million bags and therefore the use of 9 million bags to fuel the subsequent high export volumes, it might indicate in terms of the prevailing relatively good volumes of internal market supported exports that continue, that the stocks in had as at April last year were in fact higher than the approximate 12 million bags that many had suggested.  Albeit that these are rough figures, as there are some trade reports that have assessed the last 2014 crop at between 49 to 50 million bags, which would be nature indicate a lesser demand upon the large carryover stocks that were taken into the last 2014 harvest.   

In terms of consumer market demand for Brazil coffees one might have to be cautious and see the surge in exports over April 2014 to March 2015 to have been somewhat accentuated by advantageous buying of competitive in value to Asian robusta coffees Brazil conilon robusta coffees, which came out of a significantly improved conilon crop in 2014.   Rather than look to the surge in demand as a factor that is related to the more steady demand for Brazil arabica coffees and therefore to further suggest that the real dedicated consumer market demand for Brazil coffees is closer to 32 million to 33 million bags per annum and an overall domestic and export market demand of between 53 million to 54 million bags per annum, rather the higher figures reported above.  Therefore indicating that following some of the latest new crop forecasts for a 2015 Brazil coffee crop in excess of 50 million bags, that there shall be sufficient carry over arabica coffee stocks to fulfil export market demand through to the next 2016 crop.

The arbitrage between the markets has broadened on Friday to register this at 54.91 usc/Lb., while this equates to an attractive 40.78% price discount for the London robusta coffee market.  This arbitrage continues 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 16,052 bags on Friday; to register these stocks at 2,196,056 bags. There was meanwhile a smaller in volume 10,252 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,086 bags.

The commodity markets again gained some support from a softer U.S. dollar on Friday, with the overall macro commodity index showing buoyancy.    The U.S. Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Brent Oil and Orange Juice markets tended softer for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.16% higher to see this Index registered at 432.54.  The day starts with the U.S. Dollar tending to show some buoyancy and selling at 1.542 to Sterling and 1.116 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 64.00 per barrel.   

The London market started the day on Friday on a marginally softer note, but with the New York market starting the day with modest buoyancy, the London market quickly recovered into likewise modest positive territory.   This set a positive mood and as the morning progressed, both markets started to surge forward in thin trade and with stop loss buy orders accentuating the gains.    There was however something of a ceiling above the markets that took advantage of the surge and brought selling pressure into the markets to both stall the rally and see the markets reverse partially for the day, as the afternoon progressed.  The London market continued to end the day on a positive note and with only 48.8% of the gains of the day intact, while the New York market ended the day on a positive note and with 59% of the gains of the day intact.   This positive close is supportive for sentiment and despite some renewed muscle for the U.S. dollar; one might expect to see a cautious steady to buoyant start for early trade today against the prices set yesterday, as follows:

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

MAY     1717 + 39                    MAY    132.90 + 2.05  
JUL      1758 + 40                     JUL    134.65 + 2.95
SEP      1784 + 39                     SEP    137.35 + 2.85
NOV     1801 + 38                    DEC    141.10 + 2.75
JAN      1818 + 38                    MAR    144.85 + 2.75
MAR     1838 + 38                    MAY    147.00 + 2.70
MAY     1860 + 39                    JUL     148.85 + 2.65
JUL      1884 + 42                    SEP     150.55 + 2.60
SEP      1904 + 42                    DEC     152.60 + 2.60
NOV     1917 + 42                    MAR    154.80 + 2.50

Kind regards,  
Lionel

8th. May, 2015.
The National Coffee Association in Guatemala has reported that the country’s coffee exports for the month of April were 136,545 bags or 34.25% lower than the same month last year, at a total of 262,093 bags.   This relatively dismal performance contributes to the cumulative coffee exports for the first seven months of the present October 2014 to September 2015 coffee year being 362,712 bags or 21.93% lower than the same period in the previous coffee year, at a total of 1,290,994 bags.

This relatively sharp dip in the cumulative exports from Guatemala which has more than adequately compensated for by the 902,584 increase in exports from neighbouring Honduras and the 199,000 bags increase in exports from Colombia, is perhaps mostly related to internal market price resistance that has inflated asking price differentials by the Guatemalan exporters over the past seven months, rather than problems with the size of the new crop.  But there is the added factor that there have been lower volumes of cross border coffees from Honduras contributing to the Guatemalan coffee exports, which impact upon both the volumes out of Guatemala and to the rising volumes out of Honduras over the period.

The autumn weather conditions in Brazil have so far brought with them fair rains and in many instances above average for this generally very dry pre winter month, to further assist to maintain fair ground water retention levels ahead of the dry winter harvest season.    This will further assist the trees to cater for the stress that comes with the harvest season, while building up stability towards the post winter spring and summer rain season and the flowering for next year’s new crop.    This next rain season in terms of the widely expected El Nino developing within the Pacific Ocean that traditionally has an influence upon increased rains in south east Brazil, is so far expected to be positive for the prospects of next year’s new crop.

In terms of the forthcoming summer rain season for Vietnam that is critical for the prospects of the forecasted larger new year end crop of mostly robusta coffees is so far looking to be a normal season, with early forecasts indicating that the region shall be in receipt of between nine and ten tropical low pressure storms.   Of these the forecasters expect that between four to five of the storms shall directly impact on Vietnam and bring with them very good rains, which shall assist to build up good ground water retention levels ahead of their dry October to April winter and spring season.   Thus so far, the positive new crop forecasts for the world’s second largest producer would seem to be good.

Thus with weather news for the world’s two largest producers Brazil and Vietnam who account for approximately 57% of world production during a good yielding coffee year being so far positive for rising coffee supply for 2016, there is presently little in the way of supportive fundamental news in play.   Especially so as aside from Brazil and Vietnam, there are no striking weather related scare stories coming forth from any other producer blocs and with forecasts for potentially rising production levels from Colombia, Indonesia, Peru and Central America over the next twelve months, the markets look to remain within the hands of the bears and somewhat flat in nature for the foreseeable future.

The arbitrage between the markets has broadened yesterday to register this at 53.77 usc/Lb., while this equates to an attractive 40.83% price discount for the London robusta coffee market.  This arbitrage continues 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 3,060 bags yesterday; to register these stocks at 2,212,108 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 33,834 bags.

The commodity markets generally gained little support from the softer U.S. dollar yesterday, with the overall macro commodity index taking a negative track for the day.  The Sugar, Cocoa and New York arabica Coffee markets nevertheless had a day of buoyancy, while the Oil, Natural Gas, 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 0.96% lower to see this Index registered at 427.17.  The day starts with the U.S. Dollar while softer against news of a conservative win in the UK to the pound tending to show some buoyancy in general in early trade and selling at 1.543 to Sterling and 1.119 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 63.80 per barrel.   

The London market started the day yesterday on a steady to softer note, while the New York market had a relatively steady start, but with the London market losing some weight into the afternoon’s trade, while the New York market experienced added positive buoyancy.   As the afternoon progressed the London market maintained a softer track, while the New York market added to its gains and while this latter market did encounter a bout of selling pressure and dip back towards par it was short lived and the New York market soon recovered, while the London market bounced back from its lows.   The London market continued to end the day on a soft note but having recovered 60% of its earlier losses of the day by the close, while the New York market ended the day on a positive note and with 71.4% of the gains of the day intact.   This close while positive in terms of the buoyancy retained within the New York market does not inspire much in the way of confidence and one would expect to see only a hesitant and cautious close to steady start for early trade today, against the prices set yesterday, as follows:

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

MAY     1678 – 14                                               MAY     130.85 + 2.80  
JUL      1718 – 18                                                JUL     131.70 + 1.75
SEP      1745 – 18                                               SEP     134.50 + 1.75
NOV     1763 – 18                                               DEC     138.35 + 1.70
JAN      1780 – 18                                               MAR    142.10 + 1.70
MAR     1800 – 17                                               MAY    144.30 + 1.65
MAY     1821 – 16                                                JUL     146.20 + 1.60
JUL      1842 – 18                                                SEP     147.95 + 1.65
SEP      1862 – 20                                               DEC     150.00 + 1.65
NOV     1875 – 20                                               MAR     152.30 + 1.65

7th. May, 2015.
The Colombian Coffee Growers Federation has reported that the country’s coffee production for the month of April was 92,000 bags or 11.06% higher than the same month in the previous year, at a total of 924,000 bags.  This higher performance follows many months of rising production levels and the cumulative production for the first seven months of the present October 2014 to September 2015 coffee year is now 312,000 bags higher than the same period in the previous coffee year, at a total of 7,143,000 bags.

It is similarly the case in terms of Colombian fine washed arabica coffee exports and the Coffee Growers Federation has reported that coffee exports for the month of April were 105,000 bags or 12.77% higher than the same month last year, at a total of 927,000 bags.   This improved performance has contributed to the countries cumulative exports for the first seven months of the present coffee year to be 199,000 bags or 2.98% higher than the same period in the previous coffee year, at a total of 6,885,000 bags.

All indications are now that with the mid-year Mitaca crop harvest starting that Colombia is on track for the present coffee year towards production of close to 13 million bags, which is a long way up from the dip during the La Nina phenomenon to production below 8 million bags.   Likewise with Colombia having been a relatively ready and steady competitive seller of their fine coffees and in competition that exports for this present coffee year might get close to 12 million bags.

This latest news follows the recent bout of trade related forecasts for a much better than initially forecasted new Brazil crop that rather than bringing forth a significant deficit new crop that might be close to 9 million bags below the combination of domestic and export market demand, shall now only be a modest 2 million to 4 million bags deficit.    This would be a figure if correct, that shall be very easily countered by the reduced by still substantial carryover coffee stocks into the new crop, which shall support an uninterrupted steady flow of Brazil coffees to the consumer markets.   Thus the latest report from Colombia albeit very much expected but the reality confirmed by the numbers, contributes to the bearish sentiment within the speculative sector of the volatile New York arabica coffee market and has its influence upon sentiment for the London robusta coffee market.

The question is that with the fall in coffee market prices what influence it might have upon farm inputs and future production for the Brazilian coffee farmers, as even with the recent decline in the value of the Brazil Real, the soft prices shall prove to be problem for many farmers.   This problematic situation being enhanced by the presently faltering Brazil economy that has resulted in the Brazil government’s decision to cut back on agricultural subsidies and more directly farm credit programs, which shall remove the chances of significant financial support for the coffee farmers.   Thus making one speculate that if the international coffee prices do not improve later in the year, it might have some impact upon farm inputs and possibly reduce the potential for the next 2016 Brazil crop.

Meanwhile the Brazil government has announced their next auction of Federal coffee stocks and with 18.300 bags of these aged arabica coffee stocks on offer, on Wednesday next week.   This is however a relatively small number and with reserve prices being set, one might not expect too much excitement over this auction.

The arbitrage between the markets has narrowed yesterday to register this at 51.21 usc/Lb., while this equates to an attractive 39.41% price discount for the London robusta coffee market.  This arbitrage continues 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 20,620 bags yesterday; to register these stocks at 2,215,168 bags. There was meanwhile a smaller in volume 14,925 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 33,834 bags.

The commodity markets were mixed but many gained some support from a weaker U.S. dollar, which reacted to the relatively poor U.S.A. jobs data and the resulting renewed speculation that this shall delay the chances of a dollar interest hike.  The Oil, Natural Gas, Sugar, Orange Juice, Wheat and Corn markets had a day of buoyancy and the Platinum market was steady, while the Cocoa, Coffee, Copper, Soybean, Gold and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.05% lower to see this Index registered at 431.32.  The day starts with the U.S. Dollar near to steady in early trade and selling at 1.524 to Sterling and 1.136 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 65.30 per barrel.   

The London market and New York markets started the day yesterday with some modest buoyancy, but with both markets slipping below par into the afternoon trade.   There was a short lived recovery experienced for the New York market while the London market continued on a relatively steady downside track, but once the New York market slipped back again and started to trigger stop loss sell orders, both markets and lacking any significant industry buying under the markets, headed towards their late in the day lows.   The London market ended the day on a soft note and with 76.4% of the losses of the day intact, while the New York market ended the day on a very soft note and with 82.2% of the earlier losses of the day intact.    This soft close and with prices breaking below the recent trading range does little to inspire and one might expect little better than a steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1692 – 43                                               MAY     128.05 – 4.50  
JUL      1736 – 42                                                JUL     129.95 – 3.70
SEP      1763 – 39                                               SEP     132.75 – 3.60
NOV     1781 – 37                                               DEC     136.65 – 3.60
JAN      1798 – 36                                               MAR    140.40 – 3.55
MAR     1817 – 34                                               MAY    142.65 – 3.50
MAY     1837 – 33                                                JUL    144.60 – 3.50
JUL      1860 – 31                                                SEP    146.30 – 3.30
SEP      1882 – 31                                               DEC    148.35 – 3.10
NOV     1895 – 31                                               MAR    150.65 – 2.90

6th. May, 2015.
The National Coffee Institute of Honduras has reported that the country’s coffee exports for the month of April were 191,877 bags or 38.21% higher than the same month last year, at a total of 694,037 bags.   This improved performance follows improved performances since the start of this new coffee year and the cumulative coffee exports for the country for the first seven months of the present October 2014 to September 2015 coffee year are 902,584 bags or 36.35% higher than the same period in the previous coffee year, at a total of 3,385,707 bags.

There is however some question over the cumulative exports reported above which are calculated from the month by month coffee exports reported by the National Coffee Institute in Honduras, as they now report that the cumulative exports for the first seven months of the present coffee year are a lower figure of 3.12 million bags.   This figure is however nevertheless 636,877 bags or 25.65% higher than the same period in the previous coffee year and whichever figure is correct, the country is still showing an impressive export performance for the present coffee year and is well on track to exceed its forecasted exports for the present coffee year of in excess of 4.8 million bags and therefore at least a 13.64% improvement over the performance during the previous coffee year.

This surge in coffee exports from Honduras that is related not only to an improved new crop but also to a lesser degree of internal market price resistance that has made coffees from Honduras very competitive against the prices being offered by their neighbours in Central America over the past seven months, has allowed Honduras to more than fill the gap within the consumer markets that has come with more modest dips in export volumes from Guatemala and Costa Rica.    These exports from Honduras likewise being joined by a free flow of affordable new crop fine washed arabica coffees from Colombia and soon to be joined by the flow of new crop coffees from the larger new crop in Peru that is now starting to come to the market, to ensure a good medium to longer term supply of fine washed arabica coffees to the consumer markets.

Exporters are back at work in Vietnam post the combination of the 40th. Anniversary of the fall of Saigon and the unification of the country and the May Day holidays, to find that continued internal market price resistance to the price dictates of the reference prices of the London market likewise continues to inflate their asking differentials for new business.   However most speculate that time is on the side of the consumers and with full summer rain season on the nearby horizon and farmers still holding large volumes of coffee stocks, the expectations are that there shall be more aggressive and relatively affordable selling coming into play by the third quarter of this year.

The National Cocoa and Coffee Board of the Cameroun have reported that the countries robusta coffee exports for the first four months of their December 2014 to November 2015 robusta coffee year were 1,866 bags or 4.05% lower than the same period in the previous robusta coffee year, at a total of 44,217 bags.  While the countries arabica coffee exports for the first six months of their more conventional October 2014 to September 2015 arabica coffee year, are reported at a relatively modest 6,767 bags.

There has been progress in the plans for the amalgamation of Mondelez International and D.E. Master Blenders 1753, which would create a European coffee giant under the new name of Jacobs Douwe Egberts in that the European Commission have approved the deal, so long as both companies manage to conclude their deals to sell off some of their brands.    In this respect that D. E. Master Blenders 1753 shall shed itself of its Merrild brand and licence its Senseo brand in Austria and Mondelez sells their Carte Noire brand, but in respect of the latter Lavazza have said that they shall only make a final decision on the purchase of Carte Noire late in June and the project still remains under some small degree of question.  

The arbitrage between the markets has broadened yesterday to register this at 53.00 usc/Lb., while this equates to an attractive 39.66% price discount for the London robusta coffee market.  This arbitrage continues 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 1,270 bags yesterday; to register these stocks at 2,235,788 bags. There was meanwhile a smaller in volume 729 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 18,909 bags.

The commodity markets gained some support from the soft nature of the stock markets yesterday and likewise some softening of the U.S. dollar through the day, which brought more focus on commodities.   The Oil, Sugar, Cocoa, Coffee, Copper, Orange Juice, Soybean, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Cotton, Wheat and Corn 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 431.52.  The day starts with the U.S. Dollar steady in early trade and selling at 1.521 to Sterling and 1.124 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 66.00 per barrel.   

The London market started the day yesterday tending softer, while the New York market opened on a hesitantly steady note and seemingly had some influence to see the London market steady at just below par and joined by the New York market at just below par into the early afternoon trade.    Both markets did however recover as the afternoon progressed and with some assistance from the positive nature of the overall macro commodity index to move back into positive territory, with the London market tending to take a steady sideways track and the New York market a more erratic track for the rest of the day’s trade.   The London market ended the day on a modestly positive note and with 46.2% of the gains of the day intact, while the New York market ended the day on a positive note and with 42.9% of the earlier gains of the day intact.   This uncertain but nevertheless positive close combined with the softer nature of the U.S. dollar one would expect to inspire a steady to perhaps modestly buoyant start for early trade today against the prices set yesterday, as follows:

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

MAY     1735 + 3                                                 MAY     132.55 + 0.70
JUL      1778 + 6                                                  JUL     133.65 + 0.75
SEP      1802 + 6                                                 SEP     136.35 + 0.70
NOV     1818 + 5                                                 DEC     140.25 + 0.75
JAN      1834 + 4                                                MAR     143.95 + 0.70
MAR     1851 + 1                                                MAY     146.15 + 0.70
MAY     1870 + 2                                                 JUL     148.10 + 0.70
JUL      1891 + 5                                                 SEP     149.60 + 0.60
SEP      1913 + 5                                                 DEC    151.45 + 0.40
NOV     1926 + 5                                                 MAR    153.55 + 0.25

5th. May, 2015.
The National Coffee Institute in Costa Rica has reported that the country’s coffee exports for the month of April were 15,542 bags or 9.49% lower than the same month last year, at a total of 148,171 bags.   This more modest performance follows a slower price resistant start for the first five months of the present October 2014 to September 2015 coffee year and therefore, the cumulative coffee exports for the first seven months of the present coffee year are 57,302 bags or 8.16% below the same period in the previous coffee year, at a total of 644,723 bags.

The preliminary April coffee exports from Brazil have been reported to have been 48,900 bags or 1.71% lower than the same month last year, at a total of 2,814,950 bags.   This relatively modest dip is however still a significant number and by nature, does not reflect any sign that farmers have been holding back stocks in anticipation of the forecasted more modest new crop, which would allow for controlled value added exports for the coming year.

Adding to the speculation over the prospects of the new Brazil crop and with the new conilon robusta harvest already in play and to be followed shortly in a few weeks’ time by the harvest of the new arabica crop, has been the new crop forecast by E D and F Man Volcafe yesterday.   This forecast that this large coffee trading group have said is based on a detailed crop tour that took place over March and April and included 14,000 Kilometres of travel and approximately 3,000 farms, has seen them raise their earlier February 2015 forecast by 2.5 million bags to a new figure of 51.9 million bags.

This latest forecast that is based on their forecast for a new arabica coffee crop of 35.5 million bags and a conilon robusta crop of 16.4 million bags, would indicate that the new crop deficit shall prove to be a very modest 2 million to 3 million bags and one that shall be easily countered by the carryover stocks into this new crop.   While with this forecast closely following the Mercon forecast at the end of last month for a new Brazil crop of 50.5 million bags, it shall undoubtedly have some influence upon speculative market sentiment.   Thus limiting the short term upside potential for the more volatile New York market, which is already wallowing in doldrums of generally bearish sentiment.

Albeit early in the month and that internal market price resistance within Vietnam is inflating asking export differentials for robusta coffee export prices relative to the London robusta coffee market, traders in Vietnam are confident that the consumer market demand for robusta coffees shall not impact too severely upon the country’s export volumes for this month.   In this respect and despite the competition from larger new robusta coffee crops from Indonesia and India, the early trade estimates are for exports of Vietnam coffees and mostly robusta coffee shall be between 1.67 million and 2 million bags.   

The arbitrage between the markets has narrowed yesterday to register this at 52.52 usc/Lb., while this equates to an attractive 39.52% price discount for the London robusta coffee market.  This arbitrage continues 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 8,221 bags yesterday; to register these stocks at 2,234,518 bags. There was meanwhile a smaller in volume 3,188 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 19,638 bags.

The commodity markets were mixed yesterday, but with the steadier nature of the U.S. dollar tending to dampen spirits within many markets, as is the potential for still impressive by slower growth forecasted for China a potentially negative factor.  However the Chinese growth factor is so far not having much impact as many speculate that the Chinese government in their bid to maintain growth over a targeted 7% factor would rather come forth with a stimulus program, than let growth slip to lower levels.   The Wheat, Silver, Gold and Platinum markets had day of buoyancy and the Cocoa and Cotton markets were relatively steady, while the Oil, Natural Gas, Sugar, New York arabica Coffee, Corn and Soybean markets tended softer for the day.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.26% higher to see this Index registered at 429.13.  The day starts with the U.S. Dollar steady in early trade and selling at 1.513 to Sterling and 1.113 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 64.55 per barrel.   

The London market was closed yesterday for the May bank holiday in the UK and the New York market started the day on a modestly softer note, but did manage to recover during the early afternoon to take a brief visit into positive territory.   This was however short lived and the market was soon back into negative territory and proceeded for the rest of the day to take an erratic negative track, but with the market nevertheless managing to shrug off the bearish news yet another 50 million bags new Brazil crop forecast and a weakening of the Brazil real that is now back to 3.08 to the U.S. dollar and limit its losses by the end of the day.    The New York market nevertheless ended the day on a softer note, but having recovered 50.9% of the earlier losses of the day.   This softer close for the New York market is likely to impact negatively upon the fortunes of the post-holiday London market for early trade today, while the late in the day partial recovery might prove to be a steading factor for early trade for the New York market, against the prices set in the London market on Friday and the New York market yesterday, as follows:

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

MAY     1732 – 20                                               MAY     131.85 – 1.60
JUL      1772 – 20                                                JUL     132.90 – 1.30
SEP      1796 – 22                                               SEP      135.65 – 1.25
NOV     1813 – 22                                                DEC     139.50 – 1.30
JAN      1830 – 22                                               MAR     143.25 – 1.35
MAR     1850 – 21                                               MAY     145.45 – 1.40
MAY     1868 – 21                                                JUL      147.40 – 1.30
JUL      1886 – 21                                                SEP      149.00 – 1.15
SEP      1908 – 21                                                DEC     151.05 – 0.85
NOV     1921 – 21                                                MAR     153.30 – 0.55

4th. May, 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 7.11% during the week of trade leading up to Tuesday 28th. April;  to register a net short sold position of 9,734 Lots, this net short sold position which is the equivalent of 2,759,546 bags has most likely been further increased over the period of mixed but overall softer trade that has since followed.

With the month of April passed the Government trade authorities within Indonesia’s main robusta producing island of Sumatra have reported that the islands robusta coffee exports for the month of April were 171,335 bags or 99.63% higher than the same month last year, at a total of 343,312 bags.  This improved performance that rising robusta export volumes for the previous three months does not however in terms of the present coffee year, counter the relatively modest export volumes of the last quarter of last year.   Therefore the cumulative robusta coffee exports from Sumatra for the first seven months of the present October 2014 to September 2015 coffee year are 516,322 bags or 18.38% lower than the same period in the previous coffee year, at a total of 2,292,368 bags.   

All indications are however that with Sumatra forecasting a much improved 20% to perhaps even 25% larger new robusta crop now starting to be harvested, that export volumes shall steadily increase in the coming months and shall by the third quarter of this year see Sumatran robusta coffee exports start to catch up and even overtake the cumulative coffee year volumes of the previous coffee year.   Albeit that with the prevailing soft nature of the reference prices of the London robusta coffee market, there can be expected to be some degree of internal market price resistance that might retard the volumes of new crop export sales.

The big question remains how the competition to sell Asian robusta coffees might develop in terms of robusta exports from Indonesia, as with internal market price resistance within Vietnam having resulted in large unsold stocks of robusta coffees from the last October 2014 to January 2015 harvest, these stocks still have to come to the market.   One might suspect that with the next and so far weather conditions permitting larger new crop due to start being harvested in only six months’ time, that normal summer rainfall conditions would start to impact upon internal market sentiment within Vietnam and start to inspire farmers and internal traders to lose some hope and start to liquidate stocks.  Thus with light showers already starting over the main robusta coffee districts within Vietnam, one might expect some stiff competition starting to impact between exporters in Vietnam and Indonesia as they chase mostly calm and restrained consumer market industry buyers for new business.

But this factor might not impact upon the presently relatively firm asking robusta coffee export differentials relative to the London market that the internal markets dictate for the exporters in both countries for a month or two, as it shall take time for the security of a good rain season in Vietnam and for new crop stocks to start building in Indonesia to start to have their influence.    Thus one might expect to see little better than slow and steady Asian robusta coffee export volumes for the next month or two, with the lack of export competition from a smaller new conilon robusta coffee crop in Brazil assisting to maintain some degree of price and differential buoyancy for these Asian coffees.

The arbitrage between the markets has narrowed on Friday to register this at 53.82 usc/Lb., while this equates to an attractive 40.10% price discount for the London robusta coffee market.  This arbitrage continues 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 2,794 bags on Friday; to register these stocks at 2,242,739 bags. There was meanwhile a larger in volume 5,190 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 16,450 bags.

The commodity markets lacked participation from the majority of the European market players on Friday, as the May Day workers holiday was broadly celebrated.    Nevertheless with the U.S.A. and Great Britain hosting the majority of the markets at work, there was a full day of trade and within some markets and including the coffee markets, surprisingly good volumes traded.   The overall macro commodity index was however negative for the day, in line with renewed speculation for an interest rate hike in the U.S.A. and the resulting renewed muscle for the U.S. dollar.  The Natural Gas, Copper and Orange Juice markets had a day of buoyancy, while the Oil, Sugar, Cocoa, Coffee, Cotton, 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 0.19% lower to see this Index registered at 428.00.  The day starts with the U.S. Dollar tending softer in early trade and selling at 1.516 to Sterling and 1.121 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 64.50 per barrel.   

The London and New York markets started the day on Friday on a near to steady note and with the New York market tending steady, but with both markets moving quietly into the afternoon trade on a modestly softer track.   There was however negative pressure coming to the fore within the New York market once the North Americans came to work and the dollar started to gain ground and with volumes picking up and sell stops being triggered, to accentuate the unexpected losses, while the London market followed suit to extend its losses.    There was however a degree of support coming to the fore at the lows and the markets continued on a relatively steady track, through to the close.   The London market which shall be closed today for the May bank holiday ended the day on a softer note and with 76.9% of the losses of the day intact, while the New York market ended the day on a soft note and with 65.7% of the earlier losses of the day intact.   With the London market closed for the day today and the New York market due to trade solo for the day and against a seemingly more settled value for the dollar, one might expect to see some degree of buoyancy for early trade within the New York market against the prices set on Friday, as follows:

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

MAY     1732 – 20                                               MAY     133.45 – 3.10
JUL      1772 – 20                                                JUL     134.20 – 3.25
SEP      1796 – 22                                               SEP     136.90 – 3.25
NOV     1813 – 22                                                DEC    140.80 – 3.25
JAN      1830 – 22                                               MAR    144.60 – 3.00
MAR     1850 – 21                                               MAY    146.85 – 3.00
MAY     1868 – 21                                                JUL     148.70 – 2.80
JUL      1886 – 21                                                SEP     150.15 – 2.65
SEP      1908 – 21                                               DEC     151.90 – 2.50
NOV     1921 – 21                                               MAR     153.85 – 2.45

1st. May, 2015.
The International Coffee Organisation has reported that global coffee exports for the month of March were 270,000 bags or 2.63% lower than the same month last year, at a total of 9.98 million bags.    This contributing to the cumulative global coffee exports for the first six months of the present October 2014 to September 2015 coffee year to be 3.3% lower than the same period in the previous coffee year, at a total of 53.08 million bags.   

This decline in global exports is in terms of the prevailing price resistance that is being shown within most of the producer blocs is a relatively modest dip, while the declining exports are coming into well stocked consumer markets.  Therefore with some degree of modest consumption growth being experienced within the North American market as against relatively flat overall consumption figures from the European market, one would expect only a relatively modest dip within the main consumer market stock levels.

The Brazil government held its first successful auction of the federal retention stocks of aged arabica coffees yesterday; with the sale of 28,602 bags of these arabica coffees, with these coffees only accounting for 70.1% of the coffees that were offered up in the auction and with the balance of the coffees apparently not attracting prices that matched their reserve price levels.   This leaves the government with approximately 1 million bags of federal stocks and one might expect to see more of these auctions that are targeting the price sensitive domestic market, in the coming weeks.

The autumn weather is now starting to impact within the main Brazil coffee districts and while there have been some scattered showers; the chilly dry autumn weather is starting to impact.   Likewise and while the new conilon robusta coffee harvest is already picking up pace, the start of the new arabica coffee crop harvest is due to start in a few weeks’ time.    This will no doubt bring with it the early hulling outturn results and some more qualified speculation as to the prospects of this new crop during the month of June, but one might expect that some of these reports shall bring with them a degree of market manipulative low outturn percentages.

The Brazil real has meanwhile slipped back in value to above 3 Reais to the U.S. dollar, but this modest weaker currency has not influenced internal market selling activity and for the present, there remains a degree of price resistance on the part of the farmers in terms of their selling activity of there now much depleted stock coffees.   Thus one might expect to see Brazil sales and exports start to slow for the next couple of months and until such time as the new crop coffees start to impact upon the market, in increased volumes.  

The arbitrage between the markets has narrowed yesterday to register this at 56.17 usc/Lb., while this equates to an attractive 40.87% price discount for the London robusta coffee market.  This arbitrage continues 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 12,423 bags yesterday; to register these stocks at 2,245,533 bags. There was meanwhile a smaller in volume 825 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 21,640 bags.

The Certified Robusta coffee stocks held against the London market were seen to increase by 53,667 bags or 1.87% in the two weeks of trade leading up to Monday 27th. April; to register these stocks at 2,924,833 bags.  The potential growth in these stocks is however being somewhat retarded by the prevailing price resistance within the internal market in Vietnam, which is likewise impacting upon the volumes of new crop exports from the country.

The commodity markets had a mixed day yesterday, with many players within the European markets already closing down for today’s May Day workers day holiday and the long weekend that is not in play, for much of the world.   The softer U.S. dollar was however supportive within many markets, albeit that the overall macro commodity index was relatively flat.   The Oil, Natural Gas, Sugar, Cocoa, London robusta Coffee, Cotton and Copper markets had a day of buoyancy, while the New York arabica 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 0.17% lower to see this Index registered at 428.81.  The day starts with the U.S. Dollar tending to steady at its softer levels and trading at 1.533 to Sterling and 1.125 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 64.50 per barrel.   

The London and New York markets started the day yesterday on a slow and steady note, but with the markets starting to pick up some value into the afternoons trade.  This seemingly set a good pre long weekend base for many of the players and both markets started to pick up value as the afternoon progressed, but to see the New York market come under pressure as the afternoon progressed and slip back into negative territory.   The London market shrugged off negative pressure and maintained a positive sideways track, while the New York market attracted sell stops to increase its losses but hit a nearby support level and to take a sideways softer 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 ended the day on a softer note and with 52.5% of the earlier losses of the day intact.   This has resulted in a near to steady start for early trade today, but one might not expect with the main producers and many of the consumer markets on holiday today, too much excitement and movement against the prices set yesterday, as follows:

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

MAY     1752 + 13                                               MAY     136.55 – 1.80
JUL      1792 + 16                                                JUL     137.45 – 1.55
SEP      1818 + 18                                               SEP     140.15 – 1.65
NOV     1835 + 17                                               DEC     144.05 – 1.60
JAN      1852 + 17                                               MAR    147.60 – 1.70
MAR     1871 + 17                                               MAY    149.85 – 1.65
MAY     1889 + 17                                                JUL     151.50 – 1.60
JUL      1907 + 17                                                SEP     152.80 – 1.65
SEP      1929 + 17                                               DEC     154.40 – 1.65
NOV     1942 + 17                                               MAR     156.30 – 1.70

30th. April, 2015.
The coffee markets were devoid of fundamental news yesterday, with no striking comments coming from any of the main producer blocs and by nature, confirming that it is business as usual and that there are no threats to medium to long term coffee supply.   Albeit that there is no question that there shall be another modest deficit crop this year from Brazil, but one that shall be supported by the carryover stocks coming into this crop, which are foreseen by the market to be sufficient to ensure steady Brazil coffee supply through to the next 2016 crop.

Meanwhile with Brazil aside and the markets seemingly ignoring the constant new Brazil crop forecasts that lean towards the higher and more modest deficit crop factor, there are no concerns over longer term washed arabica coffee supply from Central America, Colombia, Peru, Africa and Asia, as weather has been kind to the coffee farmers and supply is steadily on the increase.    But there is nevertheless a wait and see stance in terms of the quality of the new summer rain season for Vietnam, which presuming that this rain season shall be a normal one, is forecasting a larger new crop that is due to be harvested during the last quarter of this year.

Vietnam is focused today on the celebrations related to the fortieth anniversary of the capture of Saigon by the northern forces and the resulting end of the war and the unification of the country, which shall be followed on with tomorrows May Day workers day holiday.   This holiday is broadly celebrated and including the majority of the coffee producing countries, albeit that the home of the two leading coffee futures markets in New York and London shall be trading quietly tomorrow.   Lacking the participation of not only the majority of the coffee producers but also most of the European countries, who make up the largest consumer bloc and followed by the North American market.  Thus it shall be surprising if there is anything better than a relatively thin and lacklustre day for the coffee markets for today, following yesterday’s hesitant and often directionless trade.

The arbitrage between the markets has broadened yesterday to register this at 58.44 usc/Lb., while this equates to an attractive 42.04% price discount for the London robusta coffee market.  This arbitrage continues 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 335 bags yesterday; to register these stocks at 2,257,956 bags. There was meanwhile a larger in volume 1,655 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,465 bags.

These relatively modest and flat certified washed arabica coffee stocks held against the New York market which are  dominated by 1,158,724 bags or 51.32% share held by Mexico and the Central American countries along with 330,284 bags or 14.63% Colombian coffees and 397,555 bags or 17.61% Peru coffees, do not really provide any indication of world coffee supply.  The lack of growth of these stocks not being related in any way to tight washed arabica coffee supply, but to the continued price resistance within the internal markets of all of the producers, which does not bring new coffees to the market at prices that encourage tendering stocks to the exchange.

One might question though how long the prevailing price resistance shall continue as unless Brazil brings any market supportive news into play and the spring and summer rains for Brazil prove to be good at the end of the third quarter and start of the last quarter of the year and support forecasts for a larger new 2016 crop for Brazil, it is likely that coffee farmers worldwide shall start to lose confidence in the prospects for a market recovery.   Thus eliminating any emotive reason to hold back from the market and possibly even more so for the Mexicans and Central Americans who would need to liquidate any remaining coffee stocks, with the start of their new and potentially larger new harvest during the last quarter of the year.

The commodity markets were generally buoyed again yesterday, by the softer nature of the U.S. dollar that has reacted in value to the unexpected modest 0.2% GNP growth figures reported by the U.S.A. for the first quarter of this year.   It is however noted that this GNP growth factor was reduced mostly by falling exports during the first quarter of the year and with this decline not only effected by the firm value of the dollar, but by exports reduced by the combination of harsh winter weather and long port strikes that took place at the time.   Nevertheless and while it remains uncertain that softer growth is due for the U.S.A. for the second quarter, it is a factor that has increased speculation that there shall not be any short term rising of the U.S. interest rates and thus, the dollar is on a back foot for the present.   The Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper, Wheat, Corn, Soybean, Silver and Platinum markets had a day of buoyancy, while the Sugar, Orange Juice and Gold markets tended softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.76% higher to see this Index registered at 429.55.  The day starts with the U.S. Dollar showing some degree of buoyancy against yesterday’s softer levels and trading at 1.541 to Sterling and 1.108 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 64.00 per barrel.   

The London market started the day yesterday with follow through buoyancy, while the New York market started off on a softer note and with both market maintaining this mixed track into the quiet and lacklustre afternoon trade.   The London market continued to maintain its positive stance and with the New York market clawing its way back up to par and back into modest positive territory, but with the London market tending to falter late in the day.    The London market ended the day on a modestly positive note and with only 16.7% of the earlier gains of the day intact, while the New York market ended the day on a likewise modestly positive note and with 56.2% of the earlier in the day’s gains intact.    This close does little to inspire and one might think that with the dollar tending to steady that the markets are due for little better than a steady start for early trade today, against the prices set yesterday, as follows:  
 
LONDON ROBUSTA US$/MT                           NEW YORK ARABICA USc/Lb.

MAY     1739 + 2                                                 MAY     138.35 + 0.20
JUL      1776 + 4                                                  JUL     139.00 + 0.45
SEP      1800 + 3                                                 SEP     141.80 + 0.45
NOV     1818 + 3                                                 DEC     145.65 + 0.35
JAN      1835 + 3                                                 MAR    149.30 + 0.30
MAR     1854 + 2                                                 MAY    151.50 + 0.35
MAY     1872 + 2                                                  JUL     153.10 + 0.35
JUL      1890 + 2                                                  SEP     154.45 + 0.35
SEP      1912 + 2                                                 DEC     156.05 + 0.25
NOV     1925 + 2                                                 MAR     158.00 + 0.25

29th. April, 2015.
The government in El Salvador following the examples of Colombia and Honduras, has announced its intent to finance the distribution of 15 million new higher yielding and disease resistant varieties of coffee seedlings to its coffee farmers over the coming year, with the intent that these trees shall replace aged coffee trees within approximately 30% of the country’s coffee farms.    Similar farm renovation programs that have taken place within Colombia and Honduras over the past few years have most definitely, and has been proved by the rising production levels for both countries, proven this to be a very worthwhile concept of farm support.   

It shall however take at least three years before the results of the program in El Salvador can be quantified, but one might think that it shall add significantly to the El Salvador coffee export volumes by the 2020/2021 coffee year.   While similar ongoing programs within Honduras the leading producer within the Central American producer bloc, are likely to see the countries production and exports continue to rise in the coming years.

The government in the Cameroon has announced that with the assistance of EU aid, it plans to invest the equivalent of 21 million US dollars in a program to produce and distribute coffee and cocoa seedlings and targeting 425,000 farmers for this aid.  The focus of the project in terms of coffee is to inspire young farmers to the coffee and cocoa industry and in terms of coffee where there has already been some recovery and is presently close to 600,000 bags per annum, to try to recover towards 1.65 million bags of coffee per annum.

This target of in excess of 1.5 million bags of coffee is attracting sceptical comment from the existing coffee farmers, but the country did produce a relatively impressive 2.4 million bag coffee crop twenty five years ago.    Thus one might comment that if enough effort and finance were to be put into the inspiration of the resuscitation of the Cameroon coffee industry, it is not an impossible target.   Albeit in terms of the negative aspects of variable and often soft prices it is a difficult mission and is most probably, one would need to view it as a relatively long term target.   

There was no comment emanating from Brazil yesterday to the latest new crop forecasts that have been coming to the market, which have contributed to the dampening of speculative spirits with the market for early this week.   But with the slightly softer U.S. dollar in play and some opportunist industry support coming into play, the markets did manage to steady and maintain some degree of buoyancy at the lower side of the recent trading range.    

With the major players in terms of production and including the top four Brazil, Vietnam, Colombia and Indonesia along with some other prominent producers such as India and Mexico taking the Friday 1st. May Labour Day holiday, as shall most of the Western European consumer countries, one might expect to see physical coffee trade starting to slow down for the last two days of this short week for many within the industry.   The New York and London markets shall however continue to operate on Friday and one can never determine what the funds might do while the industry is at rest, but this long weekend shall be followed by the delayed long weekend for the London market, which shall close for the UK bank holiday on Monday next week.

The arbitrage between the markets has broadened yesterday to register this at 58.17 usc/Lb., while this equates to an attractive 41.98% price discount for the London robusta coffee market.  This arbitrage continues 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 1,129 bags yesterday; to register these stocks at 2,257,162 bags. There was meanwhile a larger in volume 1,733 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,120 bags.

The commodity markets were mixed yesterday, but with the rising speculation that there shall be no short term raising of U.S. interest rates and the resulting weakening of the U.S. dollar, it assisted for a degree of buoyancy within many markets and further buoyancy for the overall macro commodity index.  The Oil, Natural Gas, Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Sugar, Cocoa and Orange Juice markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.31% higher to see this Index registered at 426.30.  The day starts with the U.S. Dollar steady and trading at 1.535 to Sterling and 1.097 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 62.20 per barrel.   

The London and New York markets started the day yesterday on a hesitantly steady to buoyant note and maintained a steady track into the afternoon trade, but while the London market added to its modest gains, the New York market in continued thin and lacklustre trade, slipped back briefly below par and recovered once again into modestly positive territory.    Both markets continued through the rest of the on something of a thinly traded sideways track, with the softer U.S. dollar contributing to the support.   The London market ended the day on a positive note and with 60% of the gains of the day intact, while the New York market likewise ended the day on an even more positive note and with 93.7% of the earlier gains of the day intact.   The steady to positive nature of the close yesterday is perhaps supportive for a degree of confidence and one might expect to see a steady to buoyant start for early trade today against the prices set yesterday, as follows:

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

MAY     1741 + 11                                               MAY     138.15 + 2.05
JUL      1772 + 12                                                JUL     138.55 + 1.50
SEP      1797 + 12                                               SEP     141.35 + 1.55
NOV     1815 + 13                                                DEC    145.30 + 1.55
JAN      1832 + 13                                               MAR    149.00 + 1.60
MAR     1852 + 13                                               MAY    151.15 + 1.70
MAY     1870 + 13                                                JUL    152.75 + 1.80
JUL      1888 + 13                                                SEP    154.10 + 1.85
SEP      1910 + 13                                               DEC    155.80 + 1.90
NOV     1923 + 13                                               MAR    157.75 + 1.95

28th. 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 54.79% in the week of trade leading up to Tuesday 21st. April;  to register a net short sold position of 4,030 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 0.07%, to register a net long on the day of 25,136 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the New York market decreased their net short sold position within the market by 36.82%, to register a net short of position of 9,087 Lots.   This net short sold position which is the equivalent of 2,576,124 bags has most likely been increased over the period of mixed but overall 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 increased their net long position within this market by 20.32% in the week of trade leading up to Tuesday 21st. April, to see this long position registered at 15,940 Lots, on the day.  This speculative net long position within the London market which is the equivalent 2,656,667 bags has most likely been decreased, over the period of mixed but following yesterday’s liquidation trade that has since followed.

Speculation on the prospects for the new Brazil crop came to the fore once again yesterday, with the international trade house Mercon Coffee Group forecasting that the new crop shall be higher than most other forecasts, at a total of 50.3 million bags.   Adding to this negative to the market forecast in terms of an indication that the new crop deficit shall only be a relatively modest 3 million to 4 million bags, they have indicated that carryover stocks that were 16.9 million bags as at the 1st. July 2014, would still be a high 11.2 million bags as at 1st. July this year.   This latter carryover stock figure being dramatically higher than the general estimates that range between 4 million and 5 million bags and by nature, indicating no fears of tight Brazil coffee supply through to the next 2016 crop.

This Mercon Coffee Group was accompanied yesterday by the latest report from the commodity brokers Marex Spectron, who have pegged the new Brazil crop at a similarly only modest deficit figure of 49 million bags.  This figure along with their further assessment generally good production from the other producer blocs, they forecast shall only result in very modest 2.6 million bags deficit in world coffee supply for the forthcoming October 2015 to September 2016 coffee year, which would easily be supplemented by the prevailing good world coffee stocks.   

These reports contributed towards the dampening of speculative spirits within the markets for trade yesterday and bucked the support for sentiment that was coming to the markets from the firming of the Brazil Reais, which is now trading at 2.91 to the U.S. dollar, which has been dampening internal market selling spirits and the resulting and exporter hedge selling into the markets.   One might however expect that to counter the negative effects upon the markets from these latest Brazil forecasts, that there shall be some more modest forecasts soon to come from Brazil but what effect such scare story reports might have upon market sentiment is perhaps questionable, as they might be seen to be more market manipulative than accurate by many market players.

However one might think that there shall not be strong selling aggression within Brazil of of new crop coffees over the next five months, while farmers await some degree of guidance from the weather conditions for the flowering and setting of the next 2016 crop.    This crop needing to be a large one, if it is to guarantee good Brazil coffee supply for the follow on 2016/2017 coffee year and to build up the much depleted stocks, as an insurance against the prospects of a possible down crop in 2017.  Thus despite the shock of yesterday’s sell off, one would think that it is unlikely that Brazil shall contribute towards a much lower short to medium term New York arabica coffee market.

The London robusta market perhaps though under more threat, as there remain large volumes of unsold robusta coffee stocks within the internal market in Vietnam and these are shortly to be joined by the larger new robusta crop from Indonesia, as they compete for market share within the consumer markets.   However with the new Brazil conilon robusta crop unquestionably lower this year and likely to reduce consumer market supply of these Brazil robusta coffees by in excess of 3 million bags, this might assist to provide a home for increased medium to longer term Asian robusta coffee supply and reduce the negative to the market aspects of this increasing supply.  

The arbitrage between the markets has narrowed yesterday to register this at 57.22 usc/Lb., while this equates to an attractive 41.75% price discount for the London robusta coffee market.  This arbitrage continues 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 11,564 bags yesterday; to register these stocks at 2,257,162 bags. There was meanwhile a smaller in volume 3,276 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,387 bags.

The commodity markets were mixed yesterday, but with the weaker U.S. dollar contributing to the overall macro commodity index showing a degree of buoyancy.   The Sugar, Cocoa, Cotton, Copper, Orange Juice, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Coffee, 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 0.29% higher to see this Index registered at 424.98.  The day starts with the U.S. Dollar near to steady and trading at 1.525 to Sterling and 1.089 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 62.15 per barrel.   

The London and New York markets started the day yesterday on a modestly softer note and taking this softer track, through to the afternoon’s trade.   However with the markets coming under pressure from the renewed negative sentiment and volumes building up, there were stop loss sell stops triggered within both markets that brought with it higher volumes and extended losses for both markets and were countered only at the lows, by some renewed and advantageous consumer industry support.  The London market ended the day on a soft note and with 86.2% of the losses of the day intact, while the New York market ended the day on a similarly soft note and with 67.5% of the earlier losses of the day intact.    This soft close does not inspire confidence, but one might nevertheless expect to see a degree of corrective buoyancy due for early trade today to steady the markets against the soft prices set yesterday, as follows:

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

MAY     1730 – 65                                               MAY     136.10 – 5.05
JUL      1760 – 56                                                JUL     137.05 – 5.10
SEP      1785 – 54                                               SEP     139.80 – 5.00
NOV     1802 – 52                                                DEC    143.75 – 4.90
JAN      1819 – 49                                               MAR    147.40 – 4.75
MAR     1839 – 49                                               MAY     149.45 – 4.40
MAY     1857 – 51                                                JUL     150.95 – 4.10
JUL      1875 – 52                                                SEP     152.25 – 3.90
SEP      1897 – 52                                               DEC     153.90 – 3.80
NOV     1910 – 52                                               MAR     155.80 – 3.85

27th. 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 36.82% during the week of trade leading up to Tuesday 21st. April;  to register a net short sold position of 9,087 Lots, the highest short position held since February 2014. This net short sold position which is the equivalent of 2,576,124 bags has most likely been little changed over the period of mixed but overall relatively steady range bound sideways trade that has since followed.

The General Statistics Office in Vietnam has forecasted with the most of the month of April’s export registrations in hand, that the country’s exports of mostly robusta coffees shall be approximately 40% lower than the same month last year, at a total of approximately 2 million bags.    This figure is however significantly more positive that what some traders have been previously forecasting, with many having foreseen the prevailing price resistance within the internal market in Vietnam being cause for even more modest export figures for the month.

Meanwhile ahead of the seasonal May to September summer rainfall season for Vietnam there are once again the usual comments about the dry conditions and the costs being incurred by the country’s coffee farmers, to apply pre rain season supplementary irrigation.   However so far there has not been the usual market manipulative comments about drought damage to the potential of the next year end robusta coffee crop, but more comments that with limitations to the water resources in central Vietnam, that farmers should be cautioned against further extending the lands planted under coffee.  But one might expect that if the rain season does not soon kick in, that there shall be fear stories over the potential damage that might be caused to the potential of the next crop, starting to come to the market.

While internal market coffee trade in Brazil has slowed ahead of the new crop harvest, this slowing of selling activity and internal market price resistance is being further influenced by the recovery of the Brazil Reais that is now once again trading at around 2.95 to the U.S. dollar.    While in terms of carryover stocks of mostly arabica coffees into the New Crop, there are some who estimate that by the end of next month, these might be as low as 4 million bags and therefore, not conducive to aggressive old and new crop selling.

This potential slowing in Brazilian selling activity might in terms of the lower volumes of price fixation hedge selling for arabica coffees, prove to raise the nearby ceiling for the New York arabica coffee market for this week.   Albeit that the market does still have good volumes of unsold new crop Central American coffees and the pending new Mitaca crop coffees from Colombia and the new Peru crop coffees somewhat hanging over this market.   Nevertheless despite the weight of arabica coffees still to come to the market, one might rather lean towards a slower pace from Brazil contributing towards a steady to buoyant New York market for the medium term, rather than looking to further south in terms of value.

The arbitrage between the markets has broadened on Friday to register this at 59.78 usc/Lb., while this equates to an attractive 42.05% price discount for the London robusta coffee market.  This arbitrage continues 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 3,090 bags on Friday; to register these stocks at 2,268,726 bags. There was meanwhile a larger in volume 5,544 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,663 bags.

The commodity markets were mixed on Friday and with the macro commodity index tending sideways to marginally softer, despite the support from the overall softer U.S. dollar that was in play.  The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton and Copper markets had a day of buoyancy, while the London robusta 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 1.18% lower to see this Index registered at 423.73.  The day starts with the U.S. Dollar near to steady against Friday’s lower levels and trading at 1.517 to Sterling and 1.087 to the Euro, while North Sea Oil is steady in early trade and is selling at 63.00 per barrel.   

The London market opened on a marginally softer note on Friday, while the New York market started the day with modest buoyancy and with the London market remaining below par into the afternoon trade, while the New York market remained on a positive track.   This remained the track for most of the rest of what was a thinly traded and lacklustre day’s trade for the coffee markets, which lacked any striking fundamental news to provide direction.   The London market continued to end the day on a soft note and with 77.8% of the earlier losses of the day intact, while the New York market ended the day with a degree of buoyancy but with only 26.5% of the earlier gains of the day intact.   This mixed close but with the New York market while not able to hold on to most of its gains still retaining buoyancy, might well assist to inspire a 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.

MAY     1795 – 16                                               MAY     141.15 + 0.70
JUL      1816 – 14                                                JUL     142.15 + 0.65
SEP      1839 – 13                                               SEP     144.80 + 0.70
NOV     1854 – 13                                               DEC     148.65 + 0.80
JAN      1868 – 15                                               MAR    152.15 + 0.70
MAR     1888 – 14                                               MAY    153.85 + 0.65
MAY     1908 – 12                                                JUL     155.05 + 0.75
JUL      1927 – 6                                                  SEP     156.15 + 0.65
SEP      1949 – 1                                                  DEC    157.70 + 0.55
NOV     1962 + 2                                                  MAR    159.65 + 0.25

24th. April, 2015.
The issues of Brazil weather have over the past weeks been on something of a back foot, with good March and April rains so far and with the latter April rains tending to be above average for this traditionally relatively dry pre winter dry season month.   These rains and with further rains forecasted for next week, are going to do much to add to the rising ground water retention levels ahead of the dry winter harvest season, which shall further assist the trees to counter the stress due with the harvest, while good ground water retention levels that result in moist trees, further assist the trees to counter the negative effects of any mild instances of frost.

Thus so far and so long as the spring and summer rains that are due to come into play for the last quarter of this year prove to be up to normal standards, the prospects for the next 2016 Brazil crop are looking good and so long as there are no unforeseen negative climatic conditions late this year, it should be a good 55 million bags plus crop.   Thus for the present and despite the prospects for a modest new Brazil crop this year that shall have to be supplemented by the declining carryover stocks, the Brazil crop factor is providing little in the way of support for speculative sentiment within the market.

Added to this dampening of speculative spirits is the strong chance of a modest El Nino phenomenon in the Pacific Ocean in the coming months, which is a phenomenon that traditionally brings with it higher rainfall for south east Brazil.   Thus this is a factor that would indicate a strong chance for a normal spring and summer rain season for Brazil, which traditionally starts to kick in around the end of September.

There have been reports that the Vietnam Ministry of Agriculture and Rural Development are looking to approach officials in Brazil, Colombia and Indonesia, to discuss ways in which these leading producers who account for approximately 70% of world  coffee production, to find a way to support coffee market prices.   However historic experience has shown that any such moves while having a short term positive effect upon prices do finally have a longer term influence upon over production and finally, end up with even more disastrous prices for the producers.    This is aside from the prevailing world business culture of free markets and prices and thus one would think that it is unlikely that there shall be any support from the other countries for such discussions and especially so, as these other countries were active partners to previously failed price support programs and agreements.

Meanwhile following the recent opening earlier this year by the large new Neumann Kaffee Gruppe coffee mill in Ho Chi Minh City, the E D and F Man Volcafe group have also opened a large new coffee mill, with these two mills adding to the sophisticated coffee processing infrastructure within Vietnam.   The country firmly holding on to its second place status within world coffee production and robusta coffee supply, while Vietnamese farming companies continue to expand their coffee farming interests into the neighbouring countries in south east Asia.   

In terms of fine washed arabica coffees supply there remains good volumes of unsold coffees within Central America, but sales are relatively flat with the internal market price resistance to the price dictates of the prevailing soft nature of the related New York market tending to slow new sales.   There is however further competition due to come with the start of the new Mitaca crop from Colombia and the larger new crop from Peru, which shall add further volumes to fine washed arabica coffee supply to the consumer markets and one might wander what effect these new coffees might have upon longer term asking export differentials for Central and South American washed arabica coffees.

The arbitrage between the markets has narrowed yesterday to register this at 58.49 usc/Lb., while this equates to an attractive 41.34% price discount for the London robusta coffee market.  This arbitrage continues 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 454 bags yesterday; to register these stocks at 2,265,636 bags. There was meanwhile a larger in volume 5,643 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,207 bags.

The commodity markets were buoyed yesterday by the news of lower house sales in the U.S.A. and the speculation that this shall delay the prospects for an increase in the U.S. interest rates, which softened the value of the U.S. dollar later in the day.  While the oil markets gain some support, from news of price related declining production levels in North America.    The news of factory and manufacturing activity falling within China and Japan is however not supportive in terms of commodity demand and for the present, one would suggest that these factors shall contribute towards something of a ceiling within many industry related markets.   The Oil, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Gold markets had a day of buoyancy and the Silver market was steady, while the Natural Gas, Coffee and Platinum markets bucked the trend and had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.09% higher to see this Index registered at 424.47.  The day starts with the U.S. Dollar showing some buoyancy and trading at 1.505 to Sterling and 1.081 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 62.25 per barrel.   

The London and New York markets started the day yesterday on a hesitantly near to steady note, but with both markets coming under pressure as the morning progressed and entering the afternoon trade on a softer track.   There were a couple of short term spikes for the New York market during the afternoon but with the market quickly bouncing back from a nearby ceiling, while the London market took something of a sideways below par track.  The London market continued to end the day on a modestly softer note and with 52.4% of the losses of the day intact, while the New York market ended the day on a soft note and with 86% of the earlier losses of the day intact.   This soft close does little to inspire and with little in the way of supportive fundamental news in play, one might expect to see only 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.

MAY     1811 – 9                                                 MAY     140.45 – 1.95
JUL      1830 – 11                                                JUL     141.50 – 2.15
SEP      1852 – 11                                               SEP     144.10 – 2.20
NOV     1867 – 10                                               DEC     147.85 – 2.05
JAN      1883 – 7                                                 MAR    151.45 – 2.00
MAR     1902 – 7                                                 MAY    153.20 – 2.20
MAY     1920 – 7                                                  JUL    154.30 – 2.40
JUL      1933 – 7                                                  SEP    155.50 – 2.45
SEP      1950 – 7                                                 DEC    157.15 – 2.35
NOV     1960 – 7                                                 MAR    159.40 – 2.55

23rd. April, 2015.
Following the earlier March export figures that were reported at the beginning of this month the Indonesian island of Sumatra which dominates the nation’s robusta coffee production has reported that their robusta coffee exports for the first three months of this year were 243,185 bags higher than initially reported.  In this respect they now report that the coffee exports for the month of March were 140,983 bags or 73% higher than the same month last year, at a total of 334,104 bags.   This follows a relatively dismal performance over the first three 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 687,657 bags or 26.08% lower than the same period in the previous coffee year, at a total of 1,949,056 bags.

This relatively poor six 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 month or two.   However the weather conditions have been much improved and the prospects are for a much improved new robusta coffee crop that many forecast shall be between 20% to 25% larger than last year, which should see selling becoming more aggressive and the Sumatran robusta coffee exports start to pick up in volume during the third quarter this year and thereon for the last quarter of the present coffee year.

The Uganda Coffee Development Authority has reported that the countries coffee exports for the month of March were 35,916 bags or 10.33% lower than the same month last year, at a total of 311,747 bags.  This lower volume follows similar lower volumes in recent months and the countries cumulative exports for the first six months of the present October 2014 to September 2015 coffee year are 238,635 bags or 13.07% lower than the same period in the previous coffee year, at a total of 1,587,240 bags.

However in terms of value and despite the lower volumes, the Ugandan coffee exports for the month of March were US$ 2,163,872 or 5.58% higher than the same month last year, at a total of US$ 40,936,305.   It is likewise the same in terms of value for the Ugandan coffee exports for the first six months of the present October 2014 to September 2015 coffee year, which are US$ 19,722,917 bags or 10.5% higher than the same period in the previous coffee year, at a total of US$ 207,480,332.

This increased value factor and in terms of the presently much firmer value of the U.S. dollar is therefore encouraging for the Ugandan coffee farmers who are presently on something of a resurgence track, as despite some lower volumes of sales, their income in terms of domestic prices has nevertheless improved.   Thus one might feel confident that so long as there are no unforeseen negative weather issues to the fore, that the Ugandan coffee production that is presently around 3.6 million bags per annum, shall continue to increase and target annual crops of well in excess of 4 million bags per annum within the next two to three years.

Brazil’s independent truck drivers and operators in protest against what they see to be too low rates held a meeting yesterday at the headquarters of the National Transport Association in Brasilia, announced a strike that started from midnight yesterday.    There is however no clarity as to how supportive the individual truckers shall prove to be for this strike and for the present while it would be threatening for deliveries of commodities and including coffee to the export ports, it is not yet foreseen to be that much of a disruptive factor for short term coffee exports and exports in general, from Brazil.

The arbitrage between the markets has broadened yesterday to register this at 60.14 usc/Lb., while this equates to an attractive 41.87% price discount for the London robusta coffee market.  This arbitrage continues 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 1,616 bags yesterday; to register these stocks at 2,265,182 bags. There was meanwhile a larger in volume 7,045 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,850 bags.

The commodity markets were mostly flat yesterday, but with some markets registering a degree of buoyancy with the marginally softer dollar that came into play.    The Brent Oil, Natural Gas, Sugar, Cocoa, Coffee and Orange Juice markets had a day of buoyancy, while the U.S. Oil, Cotton, Copper, Wheat, 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 0.08% lower to see this Index registered at 419.91.  The day starts with the U.S. Dollar steady and trading at 1.503 to Sterling and 1.071 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.10 per barrel.   

The London and New York markets started the day yesterday on a hesitantly steady note, but with the New York market starting to pick up support and show some buoyancy into early afternoon trade.   The New York market and lacking producer selling pressure over the market started to build upon its new found gains and to trigger stop loss buy stops to extend and accelerate its gains, with the London market following suit and moving back into positive territory.    The New York market did not however manage to sustain the rally and started to attract profit taking selling pressure later in the day and to shed some of it new found weight, while the London market took something of a sideways track at its higher afternoon value.   The London market continued to end the day on a positive note and with 84.2% of the gains of the day intact, while the New York market ended the day on a modestly positive note and with only 20.9% of the earlier gains of the day intact.    This relatively uncertain end to the day for the New York market is likely to inspire little better than a hesitantly and cautious steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1820 + 19                                              MAY     142.40 + 2.10
JUL      1841 + 16                                               JUL     143.65 + 0.95
SEP      1863 + 14                                              SEP     146.30 + 0.85
NOV     1877 + 12                                              DEC     149.90 + 0.75
JAN      1890 + 9                                                MAR    153.45 + 0.65
MAR     1909 + 10                                              MAY    155.40 + 0.50
MAY     1927 + 12                                               JUL    156.70 + 0.45
JUL      1940 + 9                                                 SEP    157.95 + 0.40
SEP      1957 + 8                                                DEC    159.50 + 0.40
NOV     1967 + 8                                                 MAR   161.95 + 0.25

22nd. April, 2015.
There are signs that the internal market in Vietnam is becoming a little bit easier, but still suffers from a degree of price resistance on the part of the farmers and the internal traders.  Thus life still remains somewhat difficult for the countries exporters, who continue to struggle to source coffee stocks at prices that are conducive to the profitable conclusion of their forward sale export commitments.  While in the meantime the exporters in their bid to make profit from their new sales and to a degree to compensate for some losses incurred to fulfil existing contracts, continue to demand relatively high export differentials relative to the London market for new robusta coffee sales.

Meanwhile with the month of April coming near to a week away from the forthcoming Labour day long weekend, traders are forecasting that the coffee exports for the month shall be potentially lower than last month’s 2.17 million bags performance, with estimates that April exports of mostly robusta coffees shall only be around 2 million bags.   Such a performance would contribute to the countries cumulative exports for the first seven months of the present October 2014 to September 2015 coffee year to only be approximately 12.83 million bags, which would be the lowest export performance since the 2009/2010 coffee year.

The question is what impact such a modest performance might have upon the selling aggression for the last five months of this present coffee year within Vietnam, as with these figures indicating the significant unsold stocks still in farm and internal trader’s hands and with a larger new crop forecasted to start in October, it would suggest that there might be some increased selling activity to soon to come to the market and activity that might with the corresponding price fixation hedge selling activity, be negative for the London market.   In this respect one might think that as soon as the new rain summer rain season starts next month and bring with it the security that the next crop shall be as forecasted a good one that it might inspire farmers to wish to liquidate stocks and come to the market with more aggression, which might finally start to bring more coffees to the certified robusta coffee stocks of the London market that were last reported on the 16th. February at a relatively modest 2,871,167 bags.

Sumatra as the main robusta producing island of Indonesia is close to starting to bring in good volumes of its new and potentially 20% to 25% larger new crop harvest and one might expect that by June this year, that there shall be some more aggressive new crop selling of these new crop coffees.    Such activity and coming into play in competition to the sales of the large stocks of Vietnam robusta coffees, is also a factor that might contribute to some more aggressive catch up selling within the internal market in Vietnam and for the present unless there is some overall fund inspired recovery for the coffee markets in general, it would appear that with unforeseen supportive weather issues aside to the fore, that the medium term prospects for the London robusta coffee market look to be relatively lacklustre in nature.

In the meantime with the Brazil Reais having recovered some ground against the U.S. dollar and with the new arabica coffee crop harvest still a few weeks away from picking up steam, the internal market selling activity of carry over arabica coffee stocks is slow.   This is contributing to some degree of buoyancy for exporters asking differentials for short term new business and has slowed new business activity out of Brazil, but with most consumer roasters already well covered with short to medium term forward contracts, there is unlikely to be any concern over the relative buoyancy in prices for new arabica coffee business out of Brazil.     

The arbitrage between the markets has broadened yesterday to register this at 59.92 usc/Lb., while this equates to an attractive 41.99% price discount for the London robusta coffee market.  This arbitrage continues 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 7,225 bags yesterday; to register these stocks at 2,266,798 bags. There was meanwhile a smaller in volume 2,050 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 29,805 bags.

The commodity markets were mostly flat yesterday and with many markets taking something of a sideways track for the day, to contribute to a likewise flat overall macro commodity index.  The Natural Gas, New York arabica Coffee, Wheat, Gold and Silver markets showed some buoyancy and the London robusta Coffee market was near to steady, while the Oil, Sugar, Cocoa, Cotton, Copper, Orange Juice, Corn, Soybean and Platinum markets tended softer for the day.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% lower to see this Index registered at 420.24.  The day starts with the marginally lower U.S. Dollar steady and trading at 1.493 to Sterling and 1.073 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 58.50 per barrel.   

The London and New York markets started the day yesterday on a hesitantly steady note and with both markets trading either side of par in thin trade, through to the afternoon trade.   As the afternoon progressed though there was some underlying and mostly technical support coming forth for the New York market and with this market posting good gains and with the London market following suit, with more modest gains.  There was however something of a nearby ceiling for the New York market that slipped back from its highs and seemingly having its influence upon the London market, which drifted back to below par.   The London market ended the day on a modestly softer note and with 44.4% of the earlier losses of the day intact, while the New York market ended the day on a positive note but with only 35.8% of the earlier gains of the day intact.    This close does little to inspire and one might expect little better than a hesitantly steady start for early trade today against the prices set yesterday, as follows:

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

MAY     1801 – 3                                                 MAY     140.30 + 1.60
JUL      1825 – 4                                                  JUL     142.70 + 1.45
SEP      1849 – 4                                                 SEP     145.45 + 1.50
NOV     1865 – 4                                                 DEC     149.15 + 1.50
JAN      1881 – 2                                                 MAR    152.80 + 1.50
MAR     1899 – 1                                                 MAY    154.90 + 1.50
MAY     1915 – 1                                                  JUL    156.25 + 1.40
JUL      1931 – 1                                                  SEP    157.55 + 1.45
SEP      1949 – 1                                                 DEC    159.10 + 1.45
NOV     1959 + 3                                                 MAR    161.70 + 1.45

21st. 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 93.24% in the week of trade leading up to Tuesday 14th. April;  to register a net short sold position of 8,914 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 1.02%, to register a net long on the day of 25,154 Lots.
   
During this same week of trade the Non Commercial Speculative sector of the market increased their net short sold position within the market by 58.68%, to register a net short of position of 14,381 Lots.   This net short sold position which is the equivalent of 4,076,950 bags has most likely been decreased 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, which was the equivalent of 2,527,079 bags on the day.

The latest Commitment of Traders report from the London robusta coffee has reported that the more speculative Managed Money sector of this market increased their net long position within this market by 22.85% in the week of trade leading up to Tuesday 14th. April, to see this long position registered at 13,781 Lots, on the day.  This speculative net long position within the London market which is the equivalent of a relatively modest 2,296,833 bags has most likely been little changed, over the period of mixed but overall relatively steady trade that has since followed.

The National Export Centre of Nicaragua has reported that the countries coffee exports for the month of March were 57,982 bags or 29.97% higher than the same month last year, at a total of 251,429 bags.   This improved performance that follows some positive results over the previous months contributes to the countries cumulative exports for the first six months of the present October 2014 to September 2015 coffee year to be 174,644 bags or 32.92% higher than the same period in the previous coffee year, at a total of 705,146 bags.

There remains very little in the way of fundamental news coming to the coffee markets, as the weather conditions for most producer blocs remain relatively normal, albeit that while still early days for the summer rainfall season in Vietnam, the early rains have so far been mostly lighter than the same time last year.   This is however not yet a matter of concern and for the present, the forecasts are for yet another reasonable summer rainfall for Vietnam and likewise, for a larger new crop.   Thus there is little in the way of particularly supportive news for the coffee markets, which are tending to remain within the prevailing and relatively soft trading range.   

The arbitrage between the markets has narrowed yesterday to register at 58.29 usc/Lb., while this equates to an attractive 41.27% price discount for the London robusta coffee market.  This arbitrage continues 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 3,145 bags yesterday; to register these stocks at 2,274,023 bags. There was meanwhile a larger in volume 4,850 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,755 bags.

The commodity markets had a mixed day yesterday, but with the overall macro commodity index tending to react to the muscle of the U.S. dollar and taking a softer track through the day.   The Oil, London robusta Coffee, Wheat and Soybean markets had a day of buoyancy and the New York arabica Coffee was steady, while the Natural Gas, Sugar, Cocoa, Cotton, Copper, Orange Juice, 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 0.99% lower to see this Index registered at 420.41.  The day starts with the U.S. Dollar showing some degree of buoyancy and trading at 1.487 to Sterling and 1.070 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.80 per barrel.   

The London market started the day yesterday with some early buoyancy and the New York market on a near to steady note, but with the New York market soon starting on a downside track and followed by the London market likewise moving back into negative territory and both market taking a negative track into the afternoon trade.    The markets did however both recover as the afternoon progressed and started to return towards par but to encounter late afternoon negative pressure, which was short lived and with the markets showing some late in the day hesitant buoyancy.    The London market continued to end the day on a modestly positive note but with only 33.3% of the earlier gains of the day intact, while the New York market ended the day on a near to steady note and having recovered 96.7% of the earlier losses of the day by the close.   This relatively steady close might however come under some renewed pressure from the early in the day follow through muscle that is being shown by the U.S. dollar, which might see the markets take a cautiously steady to soft track for early trade today against the prices set yesterday, as follows:

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

MAY     1804 + 5                                                MAY     138.70 unch
JUL      1829 + 3                                                 JUL     141.25 – 0.15
SEP      1853 + 3                                                SEP     143.95 – 0.05
NOV     1869 + 3                                                DEC     147.65 + 0.10
JAN      1883 + 2                                                MAR    151.30 + 0.15
MAR     1900 + 4                                                MAY    153.40 + 0.20
MAY     1916 + 4                                                JUL     154.85 + 0.10
JUL      1932 + 4                                                SEP     156.10 + 0.15
SEP      1950 + 4                                               DEC     157.65 + 0.25
NOV     1956 + 7                                               MAR     160.25 + 0.35

20th. 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 36.98% during the week of trade leading up to Tuesday 14th. April;  to register a net short sold position of 14,381 Lots, the highest short position held since February 2014. This net short sold position which is the equivalent of 4,076,950 bags has most likely been reduced over the period of mixed but overall more positive trade that has since followed. 

The arbitrage between the markets has broadened on Friday to register at 58.39 usc/Lb., while this equates to an attractive 41.30% price discount for the London robusta coffee market.  This arbitrage continues 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 12,050 bags on Friday; to register these stocks at 2,270,878 bags. There was meanwhile 4,056 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 32,605 bags. 

The commodity markets were mixed on Friday and the release of US consumer price data which reported an overall increase in March, was received by the market as an indication of the likelihood for an interest rate hike by the Federal Reserve, to be delayed.  The US Dollar regained lost ground during the day and an overall mixed to softer trend set for commodities on the day.  It was a softer day for Oil, Natural Gas, Sugar, Cocoa, Cotton, a mixed day for Coffee, Wheat and a more positive close for Soybean, Corn, Copper, Gold, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.52% lower to see this Index registered at 424.60.  The day starts with the U.S. Dollar steady and trading at 1.495 to Sterling and 1.078 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.93 per barrel.   

The coffee markets started the day on Friday, in a buoyant mood with both markets trading positively through the morning session, albeit in light volume of trade. The pendulum swung however, toward the middle of the day as the Brazil Real lost some ground against the firmer US Dollar to bring a degree of producer sellers as well as fund short covering, back to the floor.  As had been the trend all week, the New York arabica market took the lead on Friday, with London following in the more sedate manner and limited outright volume, another much quieter day for the London robusta market.  The earlier push lower in New York triggered stops along the way  though met with a degree of buying interest at the lower end of the trading range and this market with the assistance of a softer US Dollar, gradually posted a recovery toward the latter half of the session, as did London. Both markets managed to fend off further late in the day selling pressure to once more, climb back up through unchanged and back to positive territory toward the end, to set the close after a relatively choppy session in New York, near to unchanged on the day, as did London settle hardly changed on the day.  There is a possibility of a degree of a continuation of volatility in New York during at least the first half of this week, ahead of New York first notice day on 22nd May, when the speculative position against this prompt month, must be closed off or rolled over, while the markets set the close on Friday, as follows:  

LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. 
MAY     1799 + 3 MAY 138.70 – 0.90 
JUL      1826 – 1 JUL 141.40 – 0.10
SEP      1850 – 1 SEP 144.00 – 0.05
NOV     1866 Unch DEC 147.55 – 0.10
JAN      1881 + 2 MAR    151.15 – 0.20
MAR     1896 + 2 MAY    153.20 – 0.40
MAY     1912 + 2 JUL     154.75 – 0.55
JUL      1928 + 2 SEP     155.95 – 0.60
SEP      1946 + 2 DEC     159.90 – 0.75
NOV     1949 + 2 MAR    161.35 – 0.85

17th. April, 2015.

With Brazil having been an active seller over the past months the respected domestic analysts Safras e Mercado have estimated that by late March approximately 87% of the 2014 crop of 48.9 million bags had been sold. This figure they say is in line with the 86% average factor at the same time last year, of sales of the previous 2013 crop coffees.  There is likelihood that some of these sales are related to carry over stocks from the previous crop, this while trade has slowed within the Brazil interior as exporters are restrained by a firming Brazil Real against the U.S. Dollar, with the new 2015 harvest soon on the horizon. Meanwhile heading into the spring and summer season in the Northern Hemisphere, consumer markets are mostly well covered nearby.

There is in the meantime very little news coming forth from Mexico and Central America, where farmers are struggling to bear the negative nature of the reference prices of the New York market and remain reluctant sellers to the consumer markets.  This while the Colombia fine washed arabica coffee Mitaca harvest has started, with some difficulties being reported by Colombian coffee farmers who are struggling to cater to the increased costs of labour and sufficient pickers as the current mid-crop harvest accelerates. There are indications meanwhile that the main crop that will begin harvest in October 2015 is developing well, with weather conditions conducive and one would anticipate that Colombia will continue to regain their lost international market share subsequent to the two disastrous El Nino and La Nina affected crops of the late 2000’s. This with the assistance of the government coffee authorities positive interventions in the form of replanting more resistant varieties, plantation renewal, finance schemes and subsidies has assisted Colombia in their successful recovery back to production levels of 12 to 13 million bags per annum and secure their position as the largest producer of fine washed arabica coffees to the international consumer markets. 

The arbitrage between the markets has broadened yesterday to register at 58.63 usc/Lb., while this equates to an attractive 41.43% 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.   

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 22,085 bags yesterday; to register these stocks at 2,282,928 bags. There was meanwhile 10,187 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 28,549 bags. 

It was a positive day for the commodity markets yesterday, as weaker than expected economic data in the USA continued to weigh in on the U.S. Dollar, to make Dollar denominated commodities more attractive in other major currencies.  The day continued firm for Oil, Natural Gas, Copper, Orange Juice and Soybean, as did Sugar and Cocoa end the day on a positive note.  The grain markets turned softer with Corn and Wheat lower on the day, as did Cotton lose on the day.  It was a steady day for Gold, Silver and a positive close for Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.14% higher to see this Index registered at 426.83.  The day starts with the U.S. Dollar softer and trading at 1.494 to Sterling and 1.077 to the Euro, while North Sea Oil is softer in early trade at 61.17 per barrel.   

The coffee markets started the day with some buoyancy yesterday, and in light volume with some early pressure capping the gains in both markets, the morning session continued in a positive range.  The continuation of a weaker US Dollar lent some support as the America’s came to the floor, and a firmer session ensued for New York, to trigger stops along the way as the initial buying activity met with a void of sellers, to provide little resistance. This activity quickly brought sellers back to the floor, to set the new trading range for the rest of the day.  The performance in London was similarly positive but far thinner in volumes and this market finished closer to the middle of the days trading range, while New York lost some ground toward the end of the day, to set the close yesterday in both markets, as follows:

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

MAY     1796 + 2 MAY 139.60 + 3.80 
JUL      1827 + 9 JUL 141.50 + 4.15 
SEP      1851 + 10 SEP 144.05 + 4.05
NOV     1866 + 11 DEC 147.65 + 3.95
JAN      1879 + 14 MAR    151.35 + 3.85
MAR     1894 + 16 MAY    153.60 + 3.80
MAY     1910 + 16 JUL     155.30 + 3.75
JUL      1926 + 16 SEP     156.50 + 3.55
SEP      1944 + 16 DEC    158.00 + 3.35
NOV     1947 + 16 MAR    160.65 + 3.20

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