7th. July, 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 12.05% during the week of trade leading up to Tuesday 30th. June;  to register a net short sold position of 14,540 Lots.  This net short sold position which is the equivalent of 4,122,026 bags has most likely been increased again, over the period of mixed but overall negative trade which has since followed.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net long position within the market by 16.15% over the week of trade leading up to Tuesday 30th.  June;  to register a net long of 24,523 Lots on the day.    This net long that is the equivalent of 4,087,167 bags has been marginally softened over the period of mixed but overall softer trade, which has since followed.

The United States Department of Agriculture Foreign Agricultural Service has forecasted that the Kenya coffee production for the forthcoming August 2015 to July 2016 national coffee crop year shall relatively flat, with an estimated production of 900,000 bags of arabica coffees.   This figure which is a relatively positive one in comparison to the many private industry forecasts of closer to 800,000 bags, they note has pushed coffee that historically was the leading foreign exchange earner to forth position and well below the income the country earns from Tea the star exporter, Horticulture and Textiles.  

Mexico’s Agricultural Secretariat has addressed their struggling coffee industry that they say has declined by 40% in volume of production over the last fifteen years, to crops levels which now total only approximately 3.6 million bags per annum.   In this respect the government that had already allocated the equivalent of 44.6 million U.S. dollars towards programs to stimulate the industry this year, has increased this grant by the equivalent of a further 82.7 million U.S. dollars.   This funding they say shall assist farmers to replant approximately 75,000 hectares of aged and relatively low yielding coffee trees, with new disease resistant and higher yielding trees, with the target to renew at least 250,000 hectares over the next three years.    

This is a similar program to what has been successful in both Colombia and Honduras over the past ten years and is one that has potential merit for the Mexican coffee farmers and the prospects for a recovery in the countries future coffee production, albeit that it shall take at least four years before the results shall start to come into effect.   The question is however with the prevailing relatively dismal prices that the international coffee markets dictate for the fine washed arabica coffees that Mexico is famed for, how inspired many farmers might be to reinvest into the planting of new coffee trees, even with the assistance of the state to finance the re-planting of their farms.   Many farmers have already looked to alternative and more secure crops to farm and the present circumstances, do little to inspire confidence.

While J. M. Smucker and its prominent Folgers and Dunkin’ Donuts brands have announced reductions in their wholesale prices for coffee in the U.S.A. and with this move being expected to be followed by the other leading brands, Starbucks have announced that due to in store costs and despite lower green coffee prices, they shall be increasing the prices for in store cups of coffee.  Thus broadening the gap in prices between out of home and in home coffee consumption, but perhaps not so noticeable in terms of the rise in market share in terms of the in home consumption of relatively high cost single serve coffee capsules.

The arbitrage between the markets has narrowed yesterday to register this at 47.54 usc/Lb., while this equates to a 37.99% price discount for the London robusta coffee market.  This arbitrage remaining relatively to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,535 bags yesterday; to register these stocks at 2,145,917 bags. There was meanwhile a larger in volume 2,395 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,015 bags.

The commodity markets seemingly took something of a knock from the overall negative impact that came with the Greek crisis yesterday, with the overall macro commodity index taking a downside track for the day.   The Sugar, Soybean, Gold and Silver markets nevertheless had a day of buoyancy and the Natural Gas market was steady, while the Oil, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn and Platinum markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.24% lower: to see this Index registered at 427.35.  The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.559 to Sterling and 1.104 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 opened the day on a softer note yesterday and both markets maintained this soft track into the afternoon trade, but with something of a recovery for both markets as the afternoon progressed, to see the London market move back to par and the New York market posting some modest gains.   This recovery was however not sustained and with negative influences of the macro commodity index coming in to dampen spirits, both market soon moved back into negative territory and with sell stops being triggered started on a downside track and with the New York market registering one and half year lows in value.    The London market continued to end the day on a soft note and with 82.2% of the earlier losses of the day intact, while the New York market ended the day near to the lows of the day and with 95.7% of the losses of the day intact.   This overall soft close and with the volatile New York market ending near to the lows of the day does little to inspire, but one might expect to see a hesitantly cautious steady to start for early trade today against the prices set yesterday, as follows:

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

JUL      1844 – 9                                                 JUL      123.30 – 2.30
SEP      1711 – 37                                               SEP     125.15 – 2.25
NOV     1724 – 37                                               DEC     128.95 – 2.20
JAN      1741 – 34                                               MAR    132.60 – 2.25
MAR     1761 – 34                                               MAY    134.85 – 2.15
MAY     1785 – 32                                                JUL     136.90 – 2.10
JUL      1805 – 32                                                SEP     138.90 – 2.00
SEP      1824 – 32                                               DEC     141.75 – 1.80
NOV     1843 – 32                                               MAR     144.40 – 1.65
JAN      1866 – 32                                               MAY     145.95 – 1.70

6th. July, 2015.
The Colombian Coffee Growers Federation has reported that the country’s coffee production for the month of June was 296,000 bags or 31.36% higher than the same month in the previous year, at a total of 1,240,000 bags.  This higher performance follows many months of rising production levels and the cumulative production for the first nine months of the present October 2014 to September 2015 coffee year is now 723,000 bags or 8.19% higher than the same period in the previous coffee year, at a total of 9,548,000 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 June were 236,000 bags or 31% higher than the same month last year, at a total of 997,000 bags.   This improved performance has contributed to the countries cumulative exports for the first nine months of the present coffee year to be 605,000 bags or 7.3% higher than the same period in the previous coffee year, at a total of 8,888,000 bags.

All indications are now that with the mid-year Mitaca crop harvest in full progress 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.

At the other end of the quality scale albeit something of a subjective comment but realistic in terms of value, the Asian robusta coffee market continues to be dampened in spirit by the continued price resistance that is being experienced within the internal market in Vietnam, which has resulted in relatively firm export prices and hand to mouth buying activity of Vietnam robusta coffees on the part of the main consumer market players.   This has assisted to buoy robusta coffee export volumes out of Indonesia and mostly Sumatra, where the country is in the process of harvesting a larger new crop.

But the big question is that with Vietnam now only three months away from the start of their potentially larger new crop and some estimating that internal market stocks might well exceed 9 million bags, when the pressure of the pending new crop shall start to influence a more aggressive selling stance within the internal market and a flood of catch up sales starting to impact upon the consumer market and likewise, the certified stocks and the fortunes of the related London robusta coffee market.

The prominent European coffee roaster Mondelez International confirmed on Friday that they had completed the scheduled merger with D. E. Master Blenders 1753 and to see the merged company, now flying under the banner of Jacobs Douwe Egberts.   There does however remain the issue of the sale of the Carte Noir brand that has to be completed, so as to satisfy the dictates of the European Competitions Commission and with Lavazza now joined in these negotiations by competitive bids, this might still take a little time to conclude.   

The arbitrage between the markets has narrowed on Friday to register this at 48.11 usc/Lb., while this equates to a 37.76% price discount for the London robusta coffee market.  This arbitrage remaining relatively to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,793 bags on Thursday; to register these stocks at 2,147,452 bags. There was meanwhile a smaller in volume 2,351 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 29,410 bags.

The commodity markets with the dominant U.S.A. markets on a long weekend Independence Day holiday on Friday mostly closed, are not a factor to report today.   It is however difficult to read what influence there might be for the markets today, while many players are distracted by the uncertain economic issues that come with the news of the Greek referendum that has very clearly rejected the austerity program dictates of the European Union.     The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets remains unchanged: to see this Index registered at 432.71.  The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.559 to Sterling and 1.107 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 58.20 per barrel.   

The London market opened the day on Friday and looking to a day of trading solo while the New York market takes its Independence Day holiday, on a quiet and softer note.   The market maintained this thinly traded soft stance into the afternoon’s trade, but to start to recover as the afternoon progressed and to head back to par.   The market continued to end the day and with trade remaining thin and lacklustre, on a modestly positive note and with 37.5% of the earlier gains of the day intact.   This close provides little in the way of guidance for sentiment for trade today, but one might expect to see little better than a cautiously near to steady start for the markets against the closing levels on Friday in the London market and on Thursday in the New York market, as follows:  

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

JUL      1853 – 22                                                JUL      125.60 + 0.50
SEP      1748 + 3                                                  SEP     127.40 + 0.40
NOV     1761 + 3                                                  DEC     131.15 + 0.40
JAN      1775 + 1                                                  MAR    134.85 + 0.45
MAR     1795 unch                                               MAY    137.00 + 0.40
MAY     1817 unch                                               JUL     139.00 + 0.50
JUL      1837 unch                                               SEP     140.90 + 0.65
SEP      1856 unch                                              DEC     143.55 + 0.80
NOV     1875 unch                                               MAR    146.05 + 0.90
JAN      1898 unch                                               MAY    147.65 + 0.95

3rd. July, 2015.
There has been an amendment to the latest Commitment of Traders report from the London robusta coffee market which has seen the Speculative sector of this market increase their net long position within the market by 42.78% over the week of trade leading up to Tuesday 23rd.  June;  to register a net long of 21,114 Lots on the day.    This net long that is the equivalent of 3,519,000 bags has most likely been little changed over the period of mixed but overall sideways trade, which has since followed.

The National Coffee Institute of Honduras have reported that the countries coffee exports for the month of June were 237,357 bags or 46.87% higher than the same month last year, at a total of 743,803 bags.   This number contributes to the countries cumulative exports for the first nine months of the present October 2014 to September 2015 coffee year to being 898,728 bags or 24.71% higher than the same month last year, at a total of 4,536,008 bags.

This significantly improved performance from Honduras this year reflects not only the larger new crop that the country harvested over the last quarter of last year and the first quarter of this year, but also the comparatively affordable prices that the countries farmers have been demanding for their new crop coffees, relative to the reference prices of the New York market.   This assisting to attract consumer market support and to see Honduras and Colombia who have likewise been relatively aggressive sellers, take market share away from the other Central American producers and Mexico, who have been showing various degrees of price resistance to the dictates of the softening New York market.

The interesting factor about this cumulative export performance from Honduras of 4,536,008 bags is that it is now only 263,992 bags less than the forecasts from Honduras that they expected to export 4.8 million bags during the present October 2014 to September 2015 coffee year.  Thus with forward contracts still to be shipped over the remaining three months of the coffee year, it is looking quite likely that the country shall well exceed the forecast and see exports for the coffee year perhaps top the 5 million bags mark.  It is however evident that the country is now well sold, as offers for new business out of Honduras have dried up over the past couple of weeks.

There is a cold front entering south east Brazil and bringing colder and wet weather to the main arabica coffee districts that are presently in full harvest, which shall interrupt the harvest activity for a couple of days.   However there has been no comment from Brazil that this cold front shall be cold enough to be frost threatening and albeit that it is not an impossible factor and coming in at the traditionally more likely full moon period, there has been no speculative reaction to this news within the coffee markets.

The prominent European coffee roaster Mondelez International who had promised the European Competitions Commission that they would shed themselves of their French brand Carte Noire in order to gain approval for the merger with D. E. Master Blenders 1753, have revealed that the sale of Carte Noir is no longer an exclusive negotiation with the Italian company Lavazza.   Thus while D. E. Master Blenders 1753 have already sold their mostly Baltic States, Greenland and Iceland distributed brand Merrild to Lavazza to comply with the European Commission’s dictates on competiveness, there are other roasters who are in the pool to take over Carte Noire from Mondelez International.

The arbitrage between the markets has broadened yesterday to register this at 48.25 usc/Lb., while this equates to a 37.87% price discount for the London robusta coffee market.  This arbitrage remaining relatively to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,793 bags yesterday; to register these stocks at 2,147,452 bags. There was meanwhile a smaller in volume 2,351 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 29,410 bags.

The commodity markets were buoyed in sentiment yesterday with the news of improve employment figures emerging from the U.S.A., while the U.S.A. based markets were rounding off ahead of the long weekend holiday in the U.S.A. which is closed today to take an early day of for their Independence day holiday that is due tomorrow.   The Oil, Natural Gas, New York arabica Coffee, Orange Juice, Wheat, Corn, Soybeans and Platinum markets had a day of buoyancy and the Cotton and Silver markets were steady, while the Sugar, Cocoa, London robusta Coffee, Copper and Gold markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% higher to see this Index registered at 432.71.  The day starts with the U.S. Dollar steady and selling at 1.561 to Sterling and 1.109 to the Euro, while North Sea Oil is steady and is selling at 60.70 per barrel.   

The London market opened the day yesterday on a predictably softer note, while the New York market started the day with corrective buoyancy, following the previous day’s sell off.   The markets continued on this mixed fortunes track into the afternoon trade but with the New York market starting to come under pressure and move back to par and from there on, the New York market and within an environment of thin and erratic trade bounced either side of par as the afternoon progressed, while the London market remained close to and mostly marginally below par.   The London market continued to come under late in the day negative pressure and to end the day on a soft note and with 83.9% of the earlier losses of the day intact, while the New York market ended the day on a modestly positive note and with only 29.6% of the earlier gains of the day intact.   With the London market due to trade solo today while the New York market takes a long weekend one might expect to see little excitement for this market and perhaps a steady start in thin trade against the prices set yesterday, as follows:

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

JUL      1875 + 62                                               JUL      125.60 + 0.50
SEP      1745 – 26                                               SEP     127.40 + 0.40
NOV     1758 – 22                                               DEC     131.15 + 0.40
JAN      1774 – 17                                               MAR    134.85 + 0.45
MAR     1795 – 13                                               MAY    137.00 + 0.40
MAY     1817 – 11                                               JUL     139.00 + 0.50
JUL      1837 – 10                                               SEP     140.90 + 0.65
SEP      1856 – 10                                               DEC    143.55 + 0.80
NOV     1875 – 10                                               MAR    146.05 + 0.90
JAN      1898 – 10                                               MAY    147.65 + 0.95

2nd. July, 2015.
The National Coffee Institute of Costa Rica have reported that the countries coffee exports for the month of June were 325 bags or 0.2% higher than the same month last year, at a total of 163,634 bags.   This number contributes to the countries cumulative exports for the first nine months of the present October 2014 to September 2015 coffee year to being 85,691 bags or 8.21% lower than the same month last year, at a total of 957,761 bags.   One might comment that perhaps the marginally lower number for the coffee year so far is not necessarily related to problems for the last harvest, but more to the internal market price resistance that has prevailed within Costa Rica so far during most of this coffee year and has inflated export differentials for their coffees, which has turned some traditional consumer market buyers towards more affordable alternatives from Colombia, Honduras and Peru.

The preliminary export figures for the month of June from Brazil have been announced and with coffee exports for the month reported to have been 235,905 bags or 9% lower than the same month last year, at a total of 2.386,264 bags.    This modest dip not really seen to be that significant as it most probably reflects some degree of consumer market price resistance to the relatively higher differentials that have prevailed over the recent months, which came with the internal market arabica coffee farmer’s price resistance to the dictates of the falling value of the reference prices of the New York market.

One might comment that with the general perspective within the consumer markets and within most of the private trade in Brazil that the new crop that is now heading towards the peak harvest period for the arabica coffees later this month that the overall new crop shall be in excess of 51 million bags, the consumer market buyers are holding back for more aggressive selling and potentially softer export differentials to increase their volumes of Brazil arabica coffee purchases.    Meanwhile the majority of buyers within the main northern hemisphere consumer markets are tending to rather concentrate upon the summer holidays, while they await the potential for more aggressive selling of producer stocks post the holiday season.   

With one of the leading coffee companies in the U.S.A. J. M. Smucker announcing that it is going to reduce the prices for most of their Folgers and Dunkin’ Donuts branded coffees by 6%, it contributed to a degree of bearishness to the market yesterday.   This move by J. M. Smucker is undoubtedly going to be followed by the other major industry players, as they bid to retain their market share within this competitive market.  The inference being that if the wholesale prices for coffee are lower, it limits how much roasters shall be prepared to pay up for green coffee stocks.

An interesting report is that China is going to export containers of coffee from the south east province of Yunnan to Europe by train that shall transit from China via Kazakhstan, Russia, Belarus, Poland and Germany, on its way to ETA Rotterdam.    This estimated fifteen day trip that is faster than the longer route by sea is taking 34,167 bags of Chinese arabica coffee and is the start of a targeted 400,000 bags of coffee, which shall be exported to Europe this year in this manner.  The same report and with the steady expansion of coffee production in Yunnan in progress, has ambitiously forecasted that following last year’s coffee export performance of 1.12 million bags, that they foresee exports increasing to over 2 million bags per annum in the coming year or two.

The arbitrage between the markets has narrowed yesterday to register this at 46.67 usc/Lb., while this equates to a 36.75% price discount for the London robusta coffee market.  This arbitrage now becoming less attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen again in time and when Vietnam stocks start to impact upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,137 bags yesterday; to register these stocks at 2,151,245 bags. There was meanwhile a larger in volume 2,264 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 31,761 bags.

The commodity markets remained mixed but with many coming under some degree of pressure, from the negative influences of a firming U.S. dollar.   The Cocoa, Copper, Orange Juice and Platinum markets had a day of buoyancy and the Silver market was steady, while the Oil, Natural Gas, Sugar, Coffee, Cotton, 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 0.45% lower to see this Index registered at 431.49.  The day starts with the U.S. Dollar steady and selling at 1.561 to Sterling and 1.068 to the Euro, while North Sea Oil is steady and is selling at 60.90 per barrel.   

The London market opened the day yesterday on a near to steady note, while the New York market started the day taking an immediate softer track and with both markets heading into the afternoon maintaining a steady stance for the London market and a softer track for the New York market.    As the afternoon progressed the New York market lost some more weight and seemingly had some influence upon the London market, which drifted back into modest negative territory.   The New York market came under further pressure as the afternoon progressed and with firmer U.S. dollar adding to its demise and with fund sell stops being triggered to accentuate the downside track, which was followed by a further but much less aggressive softening for the London market.   The London market continued to end the day on a soft note but having recovered 55.2% of the earlier losses of the day by the close, while the New York market ended the day on a very soft note and with 95.6% of the earlier losses of the day intact.    This dismal close for the New York market is most likely to inspire a soft opening for the London market but perhaps a degree of corrective buoyancy for the New York market for early trade today against the prices set yesterday, as follows:

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

JUL      1813 – 72                                               JUL      125.10 – 5.55
SEP      1771 – 13                                               SEP     127.00 – 5.40
NOV     1780 – 11                                               DEC     130.75 – 5.25
JAN      1791 – 11                                               MAR    134.40 – 5.20
MAR     1808 – 8                                                 MAY    136.60 – 5.15
MAY     1828 – 5                                                  JUL     138.50 – 5.10
JUL      1847 – 5                                                  SEP     140.25 – 5.00
SEP      1866 – 5                                                 DEC     142.75 – 4.90
NOV     1885 – 5                                                  MAR    145.15 – 4.80
JAN      1908 – 5                                                  MAY    146.70 – 4.65

1st. July, 2015.
With the month of June 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 June were 66,111 bags or 22.13% higher than the same month last year, at a total of 364,845 bags.  This improved performance and following the rising robusta export volumes for the previous five months contributes to the cumulative robusta coffee exports from Sumatra for the first nine months of the present October 2014 to September 2015 coffee year to being 718,559 bags or 31.16% higher than the same period in the previous coffee year, at a total of 3,024,903 bags.
   
All indications are that this improved performance and following an improved new crop that is still in progress in Sumatra, that the robusta coffee exports from this island shall continue to post improved volumes for the rest of this coffee year.  These exports can be expected to be further buoyed by the fact that so far this year the price competition from Vietnam has been significantly dulled, but the price inflating internal market price resistance that prevails within this world’s leading robusta coffee producer.

The National Export Centre in Nicaragua have reported that the countries coffee exports for the month of May were 1,287 bags or 0.49% higher than the same month last year, at a total of 261,866 bags.   This relatively steady performance does however follow the improved performances over the preceding months and the countries cumulative coffee exports for the first eight months of present October 2014 to September 2015 coffee year are 208,324 bags or 21.1% higher than the same period in the previous coffee year, at a total of 1,197,708 bags.    

The International Coffee Organisation has reported that the global coffee exports for the month of May were 12% lower than the same month last year, at a total of 9.28 million bags.   This dip in the May coffee exports contributing to the cumulative global coffee exports for the first eight months of the present October 2014 to September 2015 coffee year being 4.6% lower than the same period in the previous coffee year, at 72.31 million bags.

The dip in cumulative coffee exports for the first eight months of the present coffee year the ICO note is related to a 6.1% dip in robusta coffee exports at a total of 27.34 million bags, along with a 3.6% dip in arabica coffee exports that totalled 44.97 million bags.   This indicates a drop in the market share of robusta coffee within the consumer market to a more modest 37.8%, but one might think that this is more related to the strong price resistance that has been shown over the period by Vietnam and to a lesser degree by the other robusta coffee producers, which has reduced the share of robusta coffees within consumer stock levels.  

This price resistance in Vietnam continues and the fact that consumer roasters are not rushing to pay up to secure these coffees, would indicate that there is not really any critical tight supply within consumer market robusta coffee inventories, rather a controlled hand to mouth buying policy on the part of many roasters.   Thus the question is with the new Vietnam crop due to start in October, when the internal market shall finally bite the bullet and start to liquidate their considerable stocks at prices that are more related to the tenderable values of the London market.   One might guess that this shall start to impact by as early as late August, unless some unforeseen influences shall come forth to inflate the international terminal price levels.

The arbitrage between the markets has broadened yesterday to register this at 51.48 usc/Lb., while this equates to a still attractive to roasters 38.88% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,060 bags yesterday; to register these stocks at 2,150,108 bags. There was meanwhile a larger in volume 3,527 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,025 bags.

The commodity markets remained mixed but experienced an overall more positive track yesterday and perhaps to a degree, with the new of increased consumer confidence levels in the U.S.A. assisting to buoy sentiment.   The Oil, Sugar, Cotton, Wheat, Corn and Soybean markets had a day of buoyancy and the Natural Gas and New York arabica coffee markets were steady, while the Sugar, London robusta Coffee, 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 1.45% higher to see this Index registered at 433.44.  The day starts with the U.S. Dollar steady and selling at 1.570 to Sterling and 1.114 to the Euro, while North Sea Oil is tending softer and is selling at 60.35 per barrel.   

The London market opened the day yesterday on a near to steady note, while the New York market started the day with modest buoyancy, to see both markets take this track into the afternoons trade, when both markets settled back to marginally below par.    The New York market as the afternoon progressed steadily lost some more weight, while the London market remained marginally below par.  The New York market did however soon regain support and experienced a modest rally, while the London market moved into negative territory, but with the rally in New York faltering in late trade.   The London market continued to end the day on a soft note and with 50% of the losses of the day intact, while the New York market shed all of its gains of the day and to end the day on par.   The failure of the New York market to maintain its gains might perhaps dent confidence and one might expect little better than a 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.

JUL      1885 – 7                                                 JUL      130.65 – 0.15
SEP      1784 – 8                                                 SEP     132.40 unch
NOV     1791 – 7                                                 DEC     136.00 unch
JAN      1802 – 6                                                 MAR    139.60 – 0.05
MAR     1816 – 9                                                 MAY    141.75 + 0.05
MAY     1833 – 10                                                JUL    143.60 + 0.15
JUL      1852 – 10                                                SEP    145.25 + 0.25
SEP      1871 – 10                                               DEC    147.65 + 0.50
NOV     1890 – 10                                               MAR    149.95 + 0.75
JAN      1913 – 10                                               MAY    151.35 + 0.90

30th. June, 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 85.17% over the week of trade leading up to Tuesday 23rd. June;  to register a net short sold position of 13,521 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 2.04%, to register a net long position of 28,106 Lots on the day.

Meanwhile the Non Commercial Speculative sector of this market increased their net short sold position within the market by 36.67% over the same week;  to register a net short sold position of 16,533 Lots.  This net short sold position which is the equivalent of 4,687,032 bags has most likely been marginally 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 latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net long position within the market by 19.55% over the week of trade leading up to Tuesday 23rd.  June;  to register a net long of 17,704 Lots on the day.    This net long that is the equivalent of 2,950,667 bags has most likely been further buoyed over the period of mixed but overall more positive trade, which has since followed.

The physical coffee markets continue to drift through the doldrums of the start of the summer holiday season for the main northern hemisphere coffee markets, with relatively dull consumer market buying interest and nothing in the way of fundamental news that would threaten longer term supply, to inspire buyers to take anything more than regular short to medium term stock cover.   While in the meantime with most producers continuing to show some degree of price resistance to the price dictates of the relatively soft terminal markets and thus inflating asking export price differentials against these markets, there is little to inspire the consumer market traders to take on relatively expensive in terms of differentials, stocks of both arabica and robusta coffees.   

This situation might suggest that for the present the consumers very much have the muscle within the market, as with many producers still holding good stocks of coffees and new crop coffees coming to the markets from Brazil, Colombia and Indonesia and with the new Vietnam, Central American, Indian and East African crops now only a few months away, there is little further that the producers can do to pressure prices higher.   Therefore, this scenario leaves the consumers with the confidence that they are well able to play the waiting game, for the producers to have to finally come to the market in a more aggressive selling manner.

The arbitrage between the markets has broadened yesterday to register this at 51.12 usc/Lb., while this equates to a still attractive to roasters 38.61% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,777 bags yesterday; to register these stocks at 2,148,084 bags. There was meanwhile a smaller in volume 1,061 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 37,552 bags.

The commodity markets remained mixed in trade yesterday, with many markets reflecting the hesitancy that prevails within the world economic forum, as all eyes remain focused upon the developing crisis within Greece.  One might comment that it is a country punching well above its weight in terms of its influence upon economic sentiment, as the reality is that it is a relatively small number in terms of the European economy let alone the world economy, which Greece is threatening to default on.   The Natural Gas, Sugar, Wheat, Corn and Gold markets had a day of buoyancy and the Cocoa market was steady, while the Oil, Coffee, Cotton, Copper, Orange Juice, Soybean, 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 0.09% higher to see this Index registered at 427.26.  The day starts with the U.S. Dollar steady and selling at 1.572 to Sterling and 1.119 to the Euro, while North Sea Oil is steady and is selling at 59.10 per barrel.   

The London and New York markets started the day on softer note yesterday and with both markets taking this soft track into the afternoon trade, which attracted increased selling pressure as the afternoon progressed and to see both markets taking a relatively sharp dip further south.   There was however some buying support coming into play and this assisted both markets to reflect something of a bounce and with the markets posting more modest losses, but while the New York market held on to its partial recovery, the London market once again slipped back in value.   The London market continued to end the day on a very soft note and with 74.3% of the losses of the day intact, while the New York market ended the day on a soft note and having recovered 76.1% of the earlier losses of the day by the close.    The partial recovery for the New York market might prove to have some supportive influence upon sentiment and this might assist for a steady start for early trade today against the prices set yesterday, as follows:

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

JUL      1892 – 32                                                JUL      130.80 – 0.90
SEP      1792 – 26                                                SEP     132.40 – 1.05
NOV     1798 – 25                                                DEC     136.00 – 1.00
JAN      1808 – 26                                                MAR    139.65 – 0.90
MAR     1825 – 26                                                MAY    141.70 – 0.90
MAY     1843 – 26                                                 JUL    143.45 – 0.90
JUL      1862 – 27                                                 SEP    145.00 – 0.85
SEP      1881 – 27                                                DEC    147.15 – 0.80
NOV     1900 – 27                                                MAR    149.20 – 0.85
JAN      1923 – 27                                                MAY    150.45 – 0.95

29th. June, 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 36.67% during the week of trade leading up to Tuesday 23rd. June;  to register a net short sold position of 16,533 Lots.  This net short sold position which is the equivalent of 4,687,032 bags has most likely been reduced, over the period of mixed but overall positive trade which has since followed.

With the export registrations for the month in hand the authorities in Vietnam have estimated the countries coffee exports for the month of June shall be 2.5% higher than the same month last year, at a total of 1.83 million bags.     This number would contribute to the countries cumulative coffee exports for the first nine months of the present October 2014 to September 2015 coffee year to being 25% lower than the same period in the previous coffee year, at 16.43 million bags.

These exports have included the substantial carryover last quarter of 2013 crop stocks that were carried over into the new harvest and one might guess that these exports might only include approximately 14.5 million bags, out of the last quarter 2014 crop coffees.   This 2014 crop has been generally been estimated at around 26.5 million bags, which would tend to highlight in terms of the relatively low export volumes so far this coffee year, the effect of internal market price resistance and inflated export price differentials that has slowed export volumes out of Vietnam this year.

It is generally estimated that Vietnam’s farmers and internal traders are still holding in excess of 9 million bags and perhaps even as much as 10 million bags of past crop coffee stocks and with the new crop due to start in three and half months, one might expect to soon see these coffees starting to chase the market, so as to clear the decks, for receipt of the new crop coffees.  Thus with consumer market demand not due to match the numbers of robusta coffee availability out of Vietnam, one might expect to see prices starting to become more affordable to the trade by the last quarter of the month and at levels that might assist the trade to tender stocks to the London exchange.

The Ugandan Coffee Development Authority have reported that the countries coffee exports for the month of May were 23,118 bags or 8.07% lower than the same month last year, at a total of 263,330 bags.   This lower volume follows a run of months of lower export volumes and the countries cumulative coffee exports for the first eight months of the present October 2014 to September 2015 coffee year are 330,323 bags or 13.51% lower than the same period in the previous coffee year, at a total of 2,114,635 bags.   

The value of the coffee exports from Uganda for the month of May was likewise $ 5,264,694.00 or 14.69% lower than the same month last year, at a total of $ 30,580,259.00.  However this follows some comparatively higher value exports earlier on in the October 2014 to September 2015 coffee year and the cumulative value of coffee exports from Uganda for the first eight months of the present coffee year is still $ 6,777,655.00 or 2.57% higher than the same period in the previous coffee year, at a total of $ 270,866,203.00.   This higher value and likewise in comparatively higher value U.S. dollars takes some of the bite out of the negative aspects of the more modest export volumes and prices, to assist to inspire the countries coffee farmers to maintain focus upon the prevailing steady growth in coffee farming activity and quality of farming, for the countries program to target production levels in excess of 4 million bags per annum in the coming years.  

The arbitrage between the markets has narrowed on Friday to register this at 50.99 usc/Lb., while this equates to a still attractive to roasters 38.21% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,569 bags on Friday; to register these stocks at 2,149,825 bags. There was meanwhile a larger in volume 7,495 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,491 bags.

The commodity markets had another mixed day on Friday, but with sufficient buoyancy within the majority of the markets, to assist the overall macro commodity index to maintain a degree of buoyancy.   The Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Copper, Wheat, Corn and Gold markets had a day of buoyancy, while the Natural Gas, New York arabica Coffee, Orange Juice, 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 0.60% higher to see this Index registered at 426.86.  The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.570 to Sterling and 1.099 to the Euro, while North Sea Oil is tending softer and is selling at 59.40 per barrel.   

The London market started the day on Friday with some buoyancy and seemingly catching up with the late in the day recovery for the New York market the previous day, while the New York market started the day with some early losses.   Trade was thin and erratic through the morning but with the New York market remaining mostly in negative territory and the London market retaining some modest buoyancy, into the early afternoon trade.    However as the afternoon progressed and with volumes steadily increasing, the London market added to its gains and the New York market moved back into positive territory.   The markets maintained a positive track for most of the afternoon but both markets came under pressure in late in the day trade and with the London market continued to end the day on a positive note and with 73.1% of the gains of the day intact, the New York market that had earlier in the day posted gains of 2.70 usc/Lb. shed its gains and slipped back to end the day on a negative note and with 50% of the earlier losses of the day intact.    This mixed close provides likewise mixed signals and one might expect to see only a steady to soft start for the London market and a 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.

JUL      1924 + 40                                               JUL      131.70 – 1.65
SEP      1818 + 19                                               SEP     133.45 – 1.65
NOV     1823 + 15                                               DEC     137.00 – 1.70
JAN      1834 + 15                                               MAR    140.55 – 1.75
MAR     1851 + 14                                               MAY    142.60 – 1.65
MAY     1869 + 16                                                JUL    144.35 – 1.65
JUL      1889 + 20                                               SEP     145.85 – 1.65
SEP      1908 + 20                                               DEC    147.95 – 1.70
NOV     1927 + 20                                               MAR    150.05 – 1.75
JAN      1950 + 20                                               MAY    151.40 – 1.75

26th. June, 2015.
The authorities in Sumatra which is the largest coffee producing island of Indonesia have revised upwards by 2,778 bags their previously reported robusta coffee exports for the month of May, which they now report were 245,108 bags for the month.  This figure equating to a 63,130 bags or a 34.69% increase in exports over the same month last year.  

The Brazil government have sold 7,260 bags or 74.48% of the approximately twenty year’s old aged federal retention coffee stocks in an auction yesterday, at an average price of 65.81 usc/Lb., which offers a significant discount to the domestic roasters who shall absorb these coffees.   However while the prices are cheap, the volume is modest and has no impact upon the prices that farmers can demand within the internal market for past crop stocks and new crop coffees.

The largest coffee cooperative in Brazil Cooxupe have reported that as at Friday last week their farmers had harvested 11.3% of their new crop arabica coffees, with the harvest volumes now starting to pick up and heading towards a peak by the second half of next month.   Noting that this percentage is significantly behind the 27.5% factor at the same time last year, but one might comment that this is most likely due to the timing of flowerings towards the new crop in September and October last year and perhaps to some degree to the unusually dry spell in January this year that might have contributed to retarding cherry maturity.

Following this the respected Brazil analyst Safras & Mercado have reported that with the new conilon robust coffee harvest having already peaked and the new arabica coffee harvest now picking up, that by Tuesday this week 42% of their estimated at 50.4 million bags new crop had been harvested.   They too making note that this is well below the 52% factor at the same time last year, but with comment that with the prevailing mostly dry weather that shall continue to the end of this month, that this harvest shall pick up in volume.

In the meantime and with the new crop coffees coming in more slowly than usual and exporters holding forward sales commitments in hand and to cover, it is assisting farmers to hold back for relatively firm prices for new crop arabica coffees within the internal market in Brazil.   This is for the meantime contributing to Brazil exporters having to demand relatively firm differentials for new business, but with exporters presently selling into the relatively lower demand summer holiday season for the main northern hemisphere consumer markets.  
 
The arbitrage between the markets has broadened yesterday to register this at 53.50 usc/Lb., while this equates to a still attractive to roasters 39.60% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,550 bags yesterday; to register these stocks at 2,146,256 bags. There was meanwhile a smaller in volume 529 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,986 bags.

The Certified Robusta coffee stocks held against the London market were seen to increase by 38,167 bags over the two weeks of trade leading up to Monday 22nd. June, to register these stocks at 3,110,667 bags.   These stocks so long as Vietnam continues with internal market price resistance that many estimate has the internal market still holding in excess of 35% of the last harvest in stock, are unlikely to show any substantial increase and rather for the present, attract consumer roaster interest for nearby and price competitive fill in coffee supply.   But might however surge in volume during the last quarter of the year, should more aggressive and price competitive selling start to come into play in August and September in Vietnam, ahead of the forthcoming and potentially larger new Vietnam crop.

The commodity markets had another mixed day yesterday but with sufficient buoyancy within selected markets, to assist the overall macro commodity index to show a degree of buoyancy. The Natural Gas, Cotton, Wheat and Corn markets had a day of buoyancy and the New York arabica Coffee, Orange Juice, Gold and Platinum markets were steady for the day, while the Oil, Sugar, Cocoa London robusta Coffee, 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 0.44% higher to see this Index registered at 424.30.  The day starts with the U.S. Dollar steady and selling at 1.574 to Sterling and 1.120 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 60.70 per barrel.   

The London market and New York markets started the day yesterday on a modestly softer track and took this hesitant path into the afternoon trade and with a brief flurry within positive territory for both markets, prior to coming under increased selling pressure and dipping back into negative territory.   The London market continued to end the day on a softer note and with 57.6% of the earlier losses of the day intact, while the New York market recovered from its earlier lows and ended the day on a steady note.    The ability of the New York market to finally hold on to its gains of Thursday might prove to be somewhat supportive for sentiment and to encourage a degree of hesitant buoyancy for early trade today against the prices set yesterday, as follows:

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

JUL      1884 – 23                                               JUL      133.33 + 0.05
SEP      1799 – 19                                               SEP     135.10 unch
NOV     1808 – 19                                               DEC     138.70 + 0.05
JAN      1819 – 19                                               MAR    142.30 + 0.05
MAR     1837 – 19                                               MAY    144.25 – 0.05
MAY     1853 – 19                                                JUL     146.00 – 0.10
JUL      1869 – 19                                               SEP     147.50 – 0.20
SEP      1888 – 19                                               DEC    149.65 – 0.25
NOV     1907 – 19                                               MAR    151.80 – 0.25
JAN      1930 – 19                                               MAY    153.15 – 0.25

25th. June, 2015.
The markets remain devoid of striking fundamental news and for the present the general perspective is that no news is good news in terms of coffee supply and by nature, negative news in terms of terminal market prices.   This however was not the case in trade yesterday, as the speculative sector of the more volatile New York market and lacking any significant volumes of producer price fixation selling over the markets took an upside swing yesterday and with buy stops being triggered, fuelled a relatively sharp recovery for the market.   This was a recovery which likewise inspired a positive move within the London market, which started to attract producer price fixation selling on the way up and to slow the pace of the rally.

The National Cocoa and Coffee Board of the Cameroon has reported that the countries robusta coffee shipments for the month of May were 5,350 bags or 11.89% lower than the same month last year, at a total of 39,650 bags.   This however follows some more substantial volumes of robusta coffee exports in the previous months and the countries cumulative robusta coffee exports for the first six months of their December 2014 to November 2015 robusta coffee year are 75,333 bags or 55.89% higher than the same period in the previous robusta coffee year, at a total of 210,117 bags.

The National Cocoa and Coffee Board of the Cameroon have also reported that the countries arabica coffee exports for the month of May were 6,483 bags or 82.77% lower than the same month last year, at a total of only 1,350 bags.   This results in the countries arabica coffee exports for the first eight months of their present arabica coffee year that runs from October 2014 to September 2015 to total 17,433 bags, which is a figure that is perhaps on track for the targeted arabica coffee exports for the coffee year of approximately 35,000 bags.

While little is mentioned these days about the problems of Roya or Leaf Rust in Central America and Mexico, there are many programs continuing within this large fine washed arabica producer bloc and with the combination of both domestic and international finance coming to the fore, to assist farmers in their bid to supress the negative effects of this virulent fungus.   These programs which provide both chemical controls for the farmers and assist farmers in replanting programs with new disease resistant and higher yielding trees are working and all indications are that they are working well, with Mexico and Central America forecasting in excess of an 8% larger overall new crop for the coming October 2015 to March 2016 harvest and combined production in excess of 18.5 million bags.

The arbitrage between the markets has broadened yesterday to register this at 52.64 usc/Lb., while this equates to a still attractive to roasters 38.96% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,007 bags yesterday; to register these stocks at 2,138,699 bags. There was meanwhile a similar in volume 5,108 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,515 bags.

The commodity markets had another mixed day yesterday but with sufficient buoyancy within selected markets, to assist the overall macro commodity index to show a degree of buoyancy. The Natural Gas, Sugar, Cocoa, Coffee, Copper, Wheat, Corn, Soybean, Silver and Platinum markets had a day of buoyancy and the Cotton market was steady, while the Oil, Orange Juice and Gold markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.29% higher to see this Index registered at 422.44.  The day starts with the U.S. Dollar steady and selling at 1.569 to Sterling and 1.121 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.95 per barrel.   

The London market started the day yesterday on a steady note, while the New York market started the day with early buoyancy and was soon joined by the London market in positive territory and with both markets taking a slow and thinly traded positive track, into the afternoon’s trade.   As the afternoon progressed the more volatile New York market started to attract speculative short covering and some consumer industry stop loss fixation buy stops to increase the gains and with the London market following suit, to see both market triggering additional buy stops to accelerate the gains.    The markets continued on this steady upside track for most of the day but encountering late in the day speculative profit taking and producer price fixation selling, which set something of a ceiling to the markets.   The London market continued to end the day on a positive note and with 90% of the gains of the day intact, while the New York market likewise ended the day on a positive note and with 87.1% of the earlier gains of the day intact.   This overall positive close for the markets is somewhat supportive fort the charts and sentiment within the markets, but would require some strong follow through support to continue the trend and one might think that with a lack of fundamental news to support the markets that they might encounter some degree of hesitancy and 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.

JUL      1907 + 81                                               JUL      133.30 + 5.60
SEP      1818 + 63                                               SEP     135.10 + 5.40
NOV     1827 + 60                                               DEC     138.65 + 5.15
JAN      1838 + 58                                               MAR    142.25 + 5.10
MAR     1856 + 57                                               MAY    144.30 + 5.00
MAY     1872 + 57                                                JUL     146.10 + 4.90
JUL      1888 + 55                                                SEP     147.70 + 4.75
SEP      1907 + 55                                               DEC     149.90 + 4.65
NOV     1926 + 55                                                MAR    152.05 + 4.55
JAN      1949 + 55                                                MAY    153.40 + 4.45

24th. June, 2015.
The soft nature of the reference prices of the London robusta coffee market remain a concern within the internal market in Vietnam, with farmers and internal market traders still holding significantly large stocks and now running out of time ahead of the start of the next and potentially larger new robusta coffee crop that should start in October this year.   Thus while exporters in Vietnam have been struggling to cover their forwards sales commitments with affordable coffees from the price resistant internal market over the past few months, the comments are that one might foresee some easing of this price resistance and some more aggressive internal market selling starting to occur by August.   Meanwhile however and with the internal market price resistance continuing for the present, the asking differentials for new short term robusta coffee business out of Vietnam remain firm.   

This internal market price resistance likewise remains the case within Mexico and Central America and to a lesser degree in Colombia, which continues to dictate relatively firm asking differentials over the prevailing value of the New York market for new washed arabica coffee sales from this producer bloc.   However most consumer roasters are already holding good forward sales cover from the region and with exporters concentrating upon the fulfilment of these forward sales and struggling to find affordable coffees to cover such sales, there is something of an artificial tightness of supply for new business being experienced within Central America at the present.    But perhaps once the slight chance for a windfall weather disaster with frost in Brazil is over and with the new Central American crop due to start at the end of the year, one might expect to see more coffees from the regions start to come to the market.

It has been twenty one years since there were last any damaging frosts within the coffee districts in Brazil and what was traditionally a fear factor within the world coffee industry and one that used to inspire large volumes of precautionary pre Brazil winter cover on the part of the main coffee industries, has tended to fall away from industry strategic planning and likewise, on the part of the speculative sector of the market.   Traditionally though the most vulnerable period for potential frost damage used to come with the periods around the full moon and the clear nights that usually come with the full moon, which shall once again occur on Thursday next week.

Thus while there would appear to be little chance for frost issues in Brazil this year, one might foresee the more vintage players within the market keeping an eye upon the weather reports from Brazil for during the coming week and once again at the end of July, when the last full moon of this year’s winter season shall occur.   From thereon and during September, the next focus of attention in terms of Brazil weather shall be the speculation on the start of the next spring and summer rain season that shall have to come in good time and by early October, if it is to support the early forecasts for a larger new 60 million bags 2016 coffee crop for Brazil.

The arbitrage between the markets has narrowed yesterday to register this at 50.09 usc/Lb., while this equates to a still attractive to roasters 38.62% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,790 bags yesterday; to register these stocks at 2,138,699 bags. There was meanwhile a smaller in volume 3,574 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 49,623 bags.

The commodity markets had another mixed day yesterday but with sufficient buoyancy within selected markets, to assist the overall macro commodity index to show a degree of buoyancy.   Meanwhile improved housing data for the U.S.A. assisted to bring a degree of buoyancy for the U.S. dollar, while the never ending saga over the situation in Greece, tended to bring hesitancy to the fortunes of the Euro.   The Oil, Copper, Orange Juice, Wheat and Corn markets had a day of buoyancy and the Natural Gas and Soybean markets were steady, while the Sugar, Cocoa, Coffee, 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 0.18% higher to see this Index registered at 421.23.  The day starts with the U.S. Dollar tending softer and selling at 1.577 to Sterling and 1.121 to the Euro, while North Sea Oil is steady in early trade and is selling at 62.05 per barrel.   

The London and New York markets started the day yesterday on an unsteady note and with the markets tending softer in early trade, but with a recovery for the New York market, to show buoyancy into the early afternoon trade.   This buoyancy was hesitantly matched within the London market, but the recovery was short lived for London and while the New York market remained on the positive sided of par and having posted gains of as much as 2.35 usc/Lb., the London market slipped back into negative territory.    The positive nature of the New York market did however start to come under pressure as the afternoon progressed and with sell stops being triggered to accelerate the reversal, the market quickly slipped back into negative territory and with the London market likewise losing some more weight.    The London market continued to end the day on a soft note and with 78.3% of the losses of the day intact, while the New York market likewise ended the day on a soft note and with 74.7% of the earlier losses of the day intact.   This soft close does little to inspire confidence and one might not expect to see any 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.

JUL      1826 – 31                                               JUL      127.70 – 2.65
SEP      1755 – 47                                               SEP     129.70 – 2.80
NOV     1767 – 45                                               DEC     133.50 – 2.80
JAN      1780 – 45                                               MAR    137.15 – 2.85
MAR     1799 – 45                                               MAY    139.30 – 2.85
MAY     1815 – 45                                                JUL     141.20 – 2.75
JUL      1833 – 45                                                SEP     142.95 – 2.70
SEP      1852 – 45                                               DEC     145.25 – 2.55
NOV     1871 – 45                                               MAR    147.50 – 2.50
JAN      1894 – 45                                               MAY    148.95 – 2.45

23rd. June, 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 108.69% over the week of trade leading up to Tuesday 16th. June;  to register a net short sold position of 7,302 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 4.38%, to register a net long position of 27,545 Lots on the day.

Meanwhile the Non Commercial Speculative sector of this market increased their net short sold position within the market by 60.45% over the same week;  to register a net short sold position of 12,096 Lots.  This net short sold position which is the equivalent of 3,429,162 bags has most likely been little changed over the period of mixed but mostly sideways 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 market has seen the Speculative sector of this market increase their net long position within the market by 36.4% over the week of trade leading up to Tuesday 16th.  June;  to register a net long of 14,809 Lots on the day.    This net long that is the equivalent of 2,468,167 bags has most likely been further buoyed over the period of mixed but overall steady trade, which has since followed.

The State run Coffee Board of India have forecasted that weather conditions have so far been positive over the main coffee districts of the country and that this is likely to see the countries coffee production and supply for the next October 2015 to September 2016 coffee year increase by close to 9% over the present coffee year, to total 5,926,667 bags.   This improved coffee crop to be made up from a 69 to 31 ratio of robusta and arabica coffees, with the new arabica coffee crop forecasted to increase by 12.5% and the new robusta coffee crop forecasted to be 7.12% higher than the last harvest.  However within the same report the Coffee Board voiced their fears the negative effects that the dictates of the prevailing soft international coffee markets, should value not come back into play for the start of the sales of the new crop coffees by the end of this year.

The U.S. Department of Agriculture has forecast that following years of steady coffee consumption growth within the U.S.A. that the rising market share of single serve coffee capsules and pods is having its effect and that while it is not impacting upon the numbers of cups of coffee being consumed, this parsimonious portion controlled method of brewing coffee is going to reduce overall coffee consumption.   The figures quoted are not dramatic in terms of they foresee that coffee demand for the coming October 2015 to September 2016 coffee year shall fall by only 1.25% to total 23.7 million bags, but it is a trend that has been noticed already within many other traditional high volume coffee consumer markets and is one that shall slow overall world coffee consumption growth.

The arbitrage between the markets has broadened yesterday to register this at 50.76 usc/Lb., while this equates to a still attractive to roasters 38.31% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 935 bags yesterday; to register these stocks at 2,132,909 bags. There was meanwhile a larger in volume 3,210 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 53,197 bags.

The commodity markets had another mixed day yesterday but with sufficient buoyancy within selected markets, to assist the overall macro commodity index to show a degree of buoyancy.   The Sugar, Cocoa, Coffee, Cotton, Orange Juice, Wheat, Corn and Soybean markets had a day of buoyancy and the Copper and Silver markets were steady, while the Oil, Natural Gas, 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 0.51% higher to see this Index registered at 420.46.  The day starts with the U.S. Dollar showing a degree of early buoyancy and selling at 1.578 to Sterling and 1.128 to the Euro, while North Sea Oil is steady in early trade and is selling at 61.05 per barrel.   

The London and New York markets started the day yesterday on a steady to buoyant note, to take a hesitantly erratic track into the afternoon trade.    As the afternoon progressed the New York market continued to attract underlying short covering and industry price fixation support as against low volume of selling pressure above the market, to add to its value, while the London market continued to maintain its buoyancy and start on a slow upside track.     The volumes were however relatively thin and the London market continued on its upside track to end the day on a positive note and with 93.5% of the gains of the day intact, while the New York market seemingly hit something of a ceiling but nevertheless ended the day on a positive note and with 90.6% of the earlier gains of the day intact.    This positive close is perhaps for the present more of an indicator for a sideways stance for the market rather than a positive stance and one might expect that the markets shall experience little better than a steady start for early trade today against the price set yesterday, as follows:

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

JUL      1857 – 9                                               JUL      130.35 + 3.20
SEP      1802 + 29                                            SEP      132.50 + 2.40
NOV     1812 + 29                                             DEC     136.30 + 2.40
JAN      1825 + 31                                            MAR     140.00 + 2.40
MAR     1844 + 32                                            MAY     142.15 + 2.40
MAY     1860 + 32                                             JUL     143.95 + 2.40
JUL      1878 + 32                                             SEP     145.65 + 2.45
SEP      1897 + 32                                             DEC    147.80 + 2.45
NOV     1916 + 32                                             MAR    150.00 + 2.45
JAN      1939 + 32                                             MAY    151.40 + 2.45

22nd. June, 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 60.45% during the week of trade leading up to Tuesday 16th. June;  to register a net short sold position of 12,096 Lots.  This net short sold position which is the equivalent of 3,429,162 bags has most likely little changed but might have been marginally increased, over the period of mixed but overall negative trade which has since followed.

The respected Brazil analysts Safras & Mercado have estimated that by Tuesday last week and based on their new crop forecast figure of 50.4 million bags, that they estimate 36% of this new crop has so far been harvested.   In this respect they estimate that approximately 73% of the new conilon robusta coffee crop has already been harvested, while approximately 21% of the new arabica coffee crop has so far been harvested.

Perhaps noticeable in terms of the fact that unlike the official Brazil forecasts that still talk the new crop lower, that now with seemingly reasonable volumes of new crop coffees already harvested and thus assisting to more accurately quantify green coffee outturn ratios from new crop coffee cherries, that Safras & Mercado still remain with their in excess of 50 million bags of new crop estimate.   This being a factor that does perhaps provide further support to the host of other private trade and industry forecasts and the United States Department of Agriculture forecast, for a new crop that they foresee to be not only excess of 50 million bags but possibly in excess of 52 million bags.   This latter USDA forecast more specifically, forecasting the new Brazil crop at 52.4 million bags.

Meanwhile the latest U.S. Department of Agriculture Foreign Agricultural Service overall coffee supply report has forecasted world coffee supply for the forthcoming October 2015 to September 2016 coffee year shall be 6,388,000 bags or 4.37% higher than the present coffee year, at a total of 152,651,000 bags.    The report also indicates world coffee demand to be approximately 147.7 million bags and therefore, would indicate surplus supply for the coming coffee year.

It is noted that this latest UDA coffee  supply figure is related to new crops coffees coming into platy for this coffee year and does not include inherited carryover producer and consumer markets, which would  add well in excess of 30 million bags to the coffee supply for the coming coffee year.   Thus even if one were to dispute the reports world coffee consumption figures that many others see to be in excess of 152 million bags per annum, the report tends to further fuel the prevailing bearish sentiment within the coffee markets.

The arbitrage between the markets has narrowed on Friday to register this at 49.68 usc/Lb., while this equates to a still attractive to roasters 38.19% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,234 bags on Friday; to register these stocks at 2,131,974 bags. There was meanwhile a larger in volume 7,419 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 56,407 bags.

The commodity markets ended the week on the back foot last week, with the overall macro commodity index taking a softer track for the day and to a degree further assisting to dampen spirts within many markets.   The Natural Gas, Orange Juice, Wheat and Soybean markets nevertheless had a day of buoyancy, while the Oil, Sugar, Cocoa, Coffee, Cotton, Copper, 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 0.60% lower to see this Index registered at 418.32.  The day starts with the U.S. Dollar tending softer and selling at 1.591 to Sterling and 1.139 to the Euro, while North Sea Oil is steady in early trade and is selling at 59.95 per barrel.   

The London and New York markets started the day on Friday with early buoyancy, within an environment of thin trade.   The markets retained this buoyancy into the afternoon trade, but with the New York market starting to come under pressure as the afternoon progressed and once volumes started to pick up with the arrival of the Americans upon the field of play, to reverse back into negative territory and with the London market moving back to start bouncing off par, while the New York market moved deeper into negative territory.   As the afternoon progressed the New York market and with the added influences of the negative nature of the macro commodity index contributing, moved deeper into negative territory and with the London market finally succumbing and joining New York within negative territory.   The London market continued to end the day on a softer note but having recovered 70.8% of the earlier losses of the day by the close, while the New York market likewise ended the day on a soft note but having also experienced a bounce of the lows of the day and having recovered 54.3% of the earlier losses of the day by the close.  This softer overall close does little to inspire but perhaps the ability of both markets to post something of a partial recovery prior to the close on Friday and with a weaker U.S. dollar in play, might be supportive for a steady start for early trade today against the prices set on Friday, as follows:

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

JUL      1866 – 22                                             JUL      127.15 – 1.55
SEP      1773 – 7                                               SEP     130.10 – 1.85
NOV     1783 – 8                                               DEC     133.90 – 1.80
JAN      1794 – 9                                               MAR    137.60 – 1.75
MAR     1812 – 10                                             MAY    139.75 – 1.80
MAY     1828 – 11                                              JUL     141.55 – 1.85
JUL      1846 – 12                                              SEP     143.20 – 1.65
SEP      1865 – 12                                             DEC     145.35 – 1.50
NOV     1884 – 12                                              MAR    147.55 – 1.35
JAN      1907 – 12                                              MAY    148.95 – 1.30

19th. June, 2015.
The National Coffee Council of El Salvador have reported that the countries coffee exports for the month of May were 8,745 bags or 10.84% higher than the same month last year, at 89,432 bags.   This improved performance has contributed to the countries cumulative exports for the first eight months of the present October 2014 to September 2015 coffee year being 60,513 bags or 14.88% higher than the same period in the previous coffee year, at a total of 467,157 bags.

The U.S. Department of Agriculture Foreign Agricultural Service have forecasted that the next October 2015 to March 2016 harvest in Honduras shall be 500,000 bags or 9.26% higher than their last crop, at 5.9 million bags.    This report adds weight to the perspective that unless there are any unforeseen weather problems for Central America in the coming months that overall Mexican and Central American fine washed arabica coffee production for the next harvest shall be approximately 1.5 million bags larger than the past harvest, to contribute approximately 18.4 million bags to world coffee supply for the next October 2015 to September 2016 coffee year.

Added to the rising supply of fine washed arabica coffee supply from Mexico and Central America, there are many forecasting a further increase in fine washed arabica coffee supply for the coming coffee year from Colombia, with forecasts that this might increase by approximately 900,000 bags or 7%, to total approximately 13.8 million bags.   One might think that added to this, there shall also be some degree of increasing supply coming forth from neighbouring Peru.   All of these forecasts are of course related to fair weather conditions for the rest of the year and can only perhaps be threatened if the prevailing mild El Nino phenomenon were to strengthen, but the present indications are that this shall not be the case.

One might comment that these increases in coffee supply from Mexico, Central America and Colombia and with the added potential for increases of similar high quality coffees from Peru shall be needed to cater for steadily increasing global consumption, but most of this rise in world consumption is mostly related to price sensitive new markets and producer markets and therefore, the increasing demand more related to robusta coffees or lower grade arabica coffees.   Thus indicating something of a surplus supply of fine washed arabica coffees for the coming coffee year, which are likely in time, to buoy the levels of the certified arabica coffee stocks held against the New York market.

Cooxupe the largest coffee cooperative in Brazil and the world has reported that so far their arabica coffee members have completed 7.8% of their new crop harvest, which is very much on track in terms of the harvest for this time of the year.   This new arabica coffee harvest can be expected to pick up steam in the coming weeks and to start peaking during the second half of July, so long as weather conditions remain mostly dry to assist with steady progress of the harvest.  Albeit that this week has experienced a cold front for the main arabica coffee districts in south east Brazil, that has brought with it harvest disruptive scattered showers.

The arbitrage between the markets has broadened yesterday to register this at 51.21 usc/Lb., while this equates to an attractive 38.81% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of 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 1,528 bags yesterday; to register these stocks at 2,128,740 bags. There was meanwhile a larger in volume 9,313 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 63,826 bags.

The commodity markets were mostly steady to buoyant in yesterday’s trade, with the post Federal Reserve report weaker U.S. dollar tending to provide a degree of support and to buoy the overall macro commodity index for the day.   There remained however in terms of the Euro some degree of concern over the uncertainty over the financial problems for Greece, which limited the recovery for the currency for the day.  The Oil, Cocoa, Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Natural Gas, Sugar 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 0.16% higher to see this Index registered at 420.85.  The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.587 to Sterling and 1.135 to the Euro, while North Sea Oil is steady in early trade and is selling at 61.15 per barrel.   

The London and New York markets started the day yesterday with early buoyancy, within an environment of thin trade.   The markets retained this buoyancy into the afternoon trade and with the added influences of the positive nature of the macro commodity index assisting to support confidence for the more volatile New York market, started to build upon their gains as the afternoon progressed.    The London market continued on its steady upside track and to end the day on a positive note and with 78.9% of the earlier gains of the day intact, while the New York market that dipped in value in late trade nevertheless ended the day on a positive note and with 63.7% of the earlier gains of the day intact.    This positive close is perhaps mildly supportive for sentiment and one might think that the markets shall experience a degree of cautious buoyancy and a steady start for early trade today against the prices set yesterday, as follows:

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

JUL      1888 + 82                                               JUL      128.70 + 2.05
SEP      1780 + 30                                               SEP     131.95 + 2.55
NOV     1791 + 26                                               DEC     135.70 + 2.60
JAN      1803 + 24                                               MAR    139.35 + 2.60
MAR     1822 + 23                                               MAY    141.55 + 2.55
MAY     1839 + 22                                               JUL      143.40 + 2.50
JUL      1858 + 23                                               SEP      144.85 + 2.45
SEP      1877 + 21                                               DEC     146.85 + 2.50
NOV     1896 + 21                                               MAR     148.90 + 2.45
JAN      1919 + 21                                               MAY     150.25 + 2.35

18th. June, 2015.
Yesterday was another day devoid of any striking fundamental news for the coffee markets, which remain well supplied and with the main consumer markets concentrating more on the coming holiday season, the markets are now within something of a doldrums.   Perhaps the only excitement being the internal market price resistance within the majority of the main producers, which is causing exporters to have to inflate asking differentials for new business and is a factor that is by nature, reducing the discount factors available to the consumer roasters from the prevailing softer markets.

There was however a report from the coffee trade house Ecom which joined a host of other recent 50 million bags plus new crop forecasts for Brazil, with the report and with the harvest now in progress, raising their earlier forecast for a new crop by 4.12% to a new figure of 51.8 million bags.   This report adding weight to the generally accepted perspective, that the new Brazil crop is indeed well in excess of 50 million bags and is therefore, only a very modest deficit crop and one that shall be easily countered by the still relatively good carryover stocks into the new crop.

In terms of the medium term market and with the potential for rising volumes of Vietnam and Central American stocks to come forth to the market during the third quarter of this year and ahead of their new crops that start being harvested during the fourth quarter of the year, one cannot really foresee any reason to take a positive view towards the coffee markets.   As in the meantime there is a better than initially expected new Brazil crop now coming to the market and alongside relatively good supply of fine washed arabica coffees from Peru and the new Colombian Mitaca crop and a larger new robusta coffee crop from Indonesia.   

There are however unforeseen potential hurdles in front of the market, which are related to the present frost season in Brazil that shall continue to threaten until the end of July and the uncertainty of the start of the next spring and summer rain season for Brazil, which shall need to be good rains to support the early forecasts for a 60 million bags plus 2016 Brazil crop.   These hurdles are however not yet seen to be serious as it has been twenty one years since there were any significant frosts experienced within the southern Brazil coffee districts and with the El Nino seemingly in play, it is a phenomenon that traditionally brings with it improved rains for south eastern Brazil.    

The arbitrage between the markets has narrowed yesterday to register this at 50.02 usc/Lb., while this equates to an attractive 38.66% price discount for the London robusta coffee market.  This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

However with the arbitrage no longer as attractive as it has been in recent months, while the overall market prices are significantly softer, the inspiration to use more robusta coffee in blends is on the wane.   Nevertheless money is money and especially so within the growing market share for single serve capsule coffee offerings that are by nature of the related machines high pressure extraction being robusta coffee friendly, one might comment that robusta coffees are no longer mostly related to the manufacture of soluble coffees.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,552 bags yesterday; to register these stocks at 2,127,212 bags. There was meanwhile a larger in volume 3,872 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,513 bags.

The commodity markets mixed and overall sideways in nature, ahead of the report from the U.S. Federal Reserve yesterday evening in European time.  This report finally coming forth with the news that it is business as usual and that it is now unlikely that the U.S.A. shall decide on raising the dollar interest rates until their September meeting.   The Sugar, Wheat, Corn and Soybean markets had a day of buoyancy, while the Oil, Natural Gas, 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 0.01% lower to see this Index registered at 420.18.  The day starts with the U.S. Dollar tending softer and selling at 1.581 to Sterling and 1.136 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.55 per barrel.   

The London and New York markets started the day yesterday with early buoyancy, within an environment of thin trade.   However this was short lived and both the markets entered the afternoon’s trade taking a softer track, but while the New York market started to lose some more weight and set the market on a steady downside track, the London market managed to show a degree of only marginal softness for the prompt months of the exchange.   The London market continued on a generally sideways track and to end the day on a marginally softer note and with only 21.1% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 96.3% of the losses of the day intact.    The post Federal Reserve news softer U.S. dollar might be marginally supportive for the markets, but one might not expect to see much better than a 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.

JUL      1806 + 13                                             JUL      126.65 – 2.70
SEP      1750 – 4                                               SEP     129.40 – 2.60
NOV     1765 – 6                                               DEC     133.10 – 2.55
JAN      1779 – 10                                             MAR    136.75 – 2.55
MAR     1799 – 12                                             MAY    139.00 – 2.50
MAY     1817 – 14                                              JUL     140.90 – 2.45
JUL      1835 – 14                                              SEP     142.40 – 2.40
SEP      1856 – 15                                             DEC     144.35 – 2.45
NOV     1875 – 16                                             MAR     146.45 – 2.50
JAN      1898 – 16                                             MAY     147.90 – 2.55

17th. June, 2015.
There was no striking news coming to the fore for the coffee markets yesterday, while many players are concentrating more upon the forthcoming summer holidays within the leading northern hemisphere markets, which dominate direction.   There is however something of a support factor for the markets coming from the internal market price resistance within Vietnam, where farmers continue to hoard their past harvest stocks and to pressure the short sold exporters higher in price.

These activities are meanwhile continuing to inflate asking differentials for new robusta coffee business from not only from the Vietnam exporters but also with consumer industries maintaining a reverse price resistance hand to mouth buying policy and chasing nearby supply to fill the gaps from all robusta producers, similarly inflated exporters asking differentials for robusta coffees in general.   These activities are therefore limiting the volumes of new robusta coffee business and the related price fixation hedge selling against the London market and with trade and roaster demands upon alternative supply from the certified stocks held against the London market, it is inflating the value of the prompt month within the London market and creating a degree of buoyancy for this market.

The big question is how long shall the farmers and internal traders within Vietnam hold out, as there is something of a cut off time in terms of the new and forecasted to be potentially larger new crop that is due to start being harvested at the end of the summer rain season, in October.  This factor is very much in mind with the consumer industry buyers who are by nature differential focused in terms of their pricing and are tending as they head into the slower summer roasting season for the main northern hemisphere markets, to hold back from all but need to have new purchases.

Thus with the prevailing short term artificially tight short term supply of robusta coffees one might guess that ultimately on the medium term the muscle still remains with the consumers and that perhaps by late August the farmers and internal traders within Vietnam might need to bite the bullet, and start to become more aggressive sellers of their substantial stocks of robusta coffee.   Meanwhile the related buoyancy within the London robusta coffee market is seemingly having some influence to counter the negative nature of the charts for the more volatile New York market and with similarly some degree of internal market price resistance being shown by arabica coffee farmers in Brazil and many other leading arabica coffee producers, one might suspect that both markets might be able to show a degree of buoyancy.

The arbitrage between the markets has broadened yesterday to register this at 52.44 usc/Lb., while this equates to an attractive 39.73% 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 4,114 bags yesterday; to register these stocks at 2,124,660 bags. There was meanwhile a larger in volume 9,519 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,641 bags.

The commodity markets were in receipt of mixed signals yesterday, with some concerns over more modest housing sales tending to fuel speculation over delays in the rise of the U.S. interest rates having some influence.   While the somewhat aggressive and resistant stance being taken by the Greek government towards economic reforms, is impacting upon confidence within the Euro zone.    Thus the markets and with many players awaiting tonight’s announcement by the U.S. Federal Reserve, took a generally sideways track for the day yesterday, with the macro commodity index trading either side of par for the day.   The U.S. Oil, Cocoa, Coffee, Cotton, Corn and Soybean markets had a day of buoyancy, while the Brent Oil, Natural Gas, Sugar, Copper, Orange Juice, Wheat, 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 0.27% higher to see this Index registered at 420.21.  The day starts with the U.S. Dollar steady and selling at 1.563 to Sterling and 1.125 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 60.65 per barrel.   

The London market shrugged off the negative influences of the sharply softer end to the day for the New York market on Monday and opened the day yesterday with buoyancy, which assisted to buoy spirits for the New York market that likewise started the day with a degree of buoyancy.   Both markets retained their muscle and took a positive track into the afternoon trade and with the London market in particular, showing some good gains.   There was however something of a ceiling for both the markets and with selling pressure coming into play and to limit the gains, through the day.    The London market ended the day on a positive note and with 76.9% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 64.1% of the earlier gains of the day intact.   This close and with yesterday’s buoyancy somewhat supportive for sentiment is likely ahead of the London options due to close later in the day likely to inspire a cautiously hesitant and steady start for both markets for early trade today against the prices set yesterday, as follows:

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

JUL      1793 + 38                                               JUL      129.35 + 1.55
SEP      1754 + 20                                              SEP      132.00 + 1.70
NOV     1771 + 21                                               DEC     135.65 + 1.70
JAN      1789 + 23                                              MAR     139.30 + 1.75
MAR     1811 + 22                                              MAY     141.50 + 1.70
MAY     1831 + 22                                               JUL     143.35 + 1.80
JUL      1849 + 18                                               SEP     144.80 + 1.85
SEP      1871 + 19                                               DEC    146.80 + 1.85
NOV     1891 + 19                                               MAR    148.95 + 1.85
JAN      1914 + 19                                               MAY    150.45 + 1.85

16th. June, 2015.
The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net long position within the market by 33.61% over the week of trade leading up to Tuesday 9th. June;  to register a net long of 10,857 Lots on the day.    This net long that is the equivalent of 1,809,500 bags has most likely been further increased over the period of mixed but overall more positive trade, which has since followed.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 85,372 bags or 1.64% during the month of May, to register these stocks at 5,289,450 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 6.3 million bags, it would have equated to at least a very safe 12.6 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.   Albeit that on the short term with the prevailing soft nature of the terminal markets, one can expect that price resistance might slow producer selling activity.

The National Export Centre in Nicaragua have reported that the country’s coffee exports for the month of April were 32,393 bags or 16.5% higher than the same month last year, at a total of 228,696 bags.   This improved performance follows improved performances in the preceding months and the countries cumulative coffee exports for the first seven months of the present October 2014 to September 2015 coffee year are 207,037 bags or 28.49% higher than the same period in the previous coffee year, at a total of 933,842 bags.

The Customs authorities in Vietnam have confirmed that the country’s exports of mostly robusta coffees for the month of May were very much in line with trade forecasts for the month, at a total of 1.75 million bags.  This figure follows many months of relatively low export volumes that are related to the internal market price resistance that has dampened interest in the carry of Vietnam robusta coffee stocks by the consumer market trade and thus contributes to the countries cumulative exports for the first five months of this year to being 39.2% lower than the same period in the previous year, at a total of 9,673,333 bags.

The weather conditions in South Eastern Brazil are generally dry and the new crop arabica coffee harvest is picking up in volume, while the earlier to ripen new crop conilon robusta coffee harvest is already peaking.    However with the soft nature of the reference prices of the international markets, there is presently price resistance being shown by the farmers and sales of new crop Brazil coffees are slow.   

The arbitrage between the markets has narrowed yesterday to register this at 51.65 usc/Lb., while this equates to an attractive 39.64% 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 765 bags yesterday; to register these stocks at 2,128,774 bags. There was meanwhile a larger in volume 5,906 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 41,122 bags.

The commodity markets were generally softer yesterday, with the overall macro commodity index once again taking a softer track for the day.   The Natural Gas, Cocoa, Gold and Silver markets nevertheless showed some buoyancy and the London robusta Coffee market was steady, while the Oil, Sugar, New York arabica Coffee, Cotton, Orange Juice, Wheat, 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 0.68% lower to see this Index registered at 419.09.  The day starts with the U.S. Dollar tending softer and selling at 1.561 to Sterling and 1.128 to the Euro, while North Sea Oil is steady in early trade and is selling at 62.45 per barrel.   

The London and New York markets opened the day taking a softer track yesterday, but with the London market soon recovering to enter the afternoon trade on a positive note.   This recovery for the London market started to trigger buy stops for the prompt months and there was a brief rally that added $ 36.00 per Metric Ton to the value of the prompt September contract, prior to selling pressure coming into play, while the New York market continued on its downside track.   The London market with New York losing further weight reverted to a downside track and while ending the day on a steady note, had shed 97.2% of the earlier gains of the day by the close.   In the meantime the New York market had been triggering sell stops on its downside track and with relatively high volumes of trade in play, ended the day on a soft note and with 86.3% of the losses of the day intact.  The dismal close in the New York market and with the charts looking soft does little to inspire confidence and one might expect to see a softer start for the London market and only a close to steady start for the New York market for early trade today against the prices set yesterday, as follows:

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

JUL      1755 + 33                                             JUL     127.80 – 4.25
SEP      1734 + 1                                              SEP     130.30 – 4.10
NOV     1750 – 2                                               DEC    133.95 – 4.05
JAN      1766 – 6                                              MAR    137.55 – 3.90
MAR     1789 – 6                                              MAY    139.80 – 3.65
MAY     1809 – 7                                               JUL     141.55 – 3.50
JUL      1831 – 4                                               SEP     142.95 – 3.50
SEP      1852 – 4                                              DEC     144.95 – 3.30
NOV     1872 – 4                                               MAR    147.10 – 3.00
JAN      1895 – 4                                               MAY    148.60 – 2.80

15th. June, 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 60.11% during the week of trade leading up to Tuesday 9th. June;  to register a net short sold position of 7,538 Lots.  This net short sold position which is the equivalent of 2,136,990 bags has most likely been increased, over the period of overall negative trade which has since followed.

The United States Department of Agriculture Foreign Agriculture Service have come forth with their assessment for the October 2014 to March 2015 new crop in Nicaragua, which they have estimated to have been 14% higher than the previous crop, at a total of 2 million bags.   This improved crop they forecast shall be followed by a marginally higher new 2015/2016 crop of 2.1 million bags.

The Brazilian Institute for Geography and Statistics (IBGE) have increased their earlier new Brazil crop forecast by 1.9%, to now assess the new crop at 43.2 million bags.   This forecast is rather dramatically lower than the host of recent forecasts that peg this new crop well in excess of 50 million bags and is even lower than the official Brazilian Crop Supply Agency (CONAB) forecast at 44.28 million bags, which is already a very questionable figure.   These reports are meanwhile are largely ignored by the speculative sector of the market, which is tending to support the prevailing soft trading range.

Brazil aside there is little in the way of striking news coming to the coffee markets for the present and in terms of forthcoming production volumes, there are no fears being voiced from any of the leading producer blocs.   Rather the news is somewhat negative for the markets, with most reports forecasting a larger than initially expected new Brazil crop that is now only likely to be a marginally deficit crop, while there is now a larger new Peru crop coming to the market and accompanied by a larger new Mitaca crop from Colombia.   These improved crops coming into play over and above a larger new crop from Indonesia and the threat of a flood of robusta coffees due from Vietnam, where it is estimated that farmers and internal traders are still holding stock of in excess of 40% of the last harvest and now only four months ahead of the forthcoming new harvest.

The arbitrage between the markets has narrowed on Friday to register this at 55.79 usc/Lb., while this equates to an attractive 41.51% 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 1,580 bags on Friday; to register these stocks at 2,129,539 bags. There was meanwhile a larger in volume 3,387 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,028 bags.

The commodity markets were generally softer on Friday, with the overall macro commodity index taking a softer track for the day.   The Sugar, Cocoa, London robusta Coffee, Cotton, Copper and Wheat markets nevertheless showed some buoyancy and the New York arabica Coffee market was steady, while the Oil, Natural Gas, 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 0.61% lower to see this Index registered at 421.95.  The day starts with the U.S. Dollar showing a degree of muscle and selling at 1.555 to Sterling and 1.121 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 62.55 per barrel.   

The London market started the day on Friday on a marginally softer note, while the New York market started with a degree of buoyancy but to soon join the London market in negative territory and with both markets taking a softer track into the afternoon trade.   As the afternoon progressed however the markets recovered and with the more volatile New York market in the lead, both markets moved back into positive territory.   The markets did however start to run out of steam later in the day and with the London market while ending the day on a positive note only retaining 42.9% of the earlier gains of the day and the New York market having shed its earlier 3.20 usc/Lb. gains for the day, ending the day on a barely steady note.   This close does not inspire much confidence and one might expect little better than a near to steady start for early trade today against the prices set on Friday, as follows:

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

JUL      1722 + 11                                             JUL      132.05 + 0.05
SEP      1733 + 6                                              SEP     134.40 – 0.05
NOV     1752 + 6                                              DEC     138.00 – 0.05
JAN      1772 + 8                                              MAR    141.45 – 0.05
MAR     1795 + 10                                            MAY    143.45 + 0.05
MAY     1816 + 10                                             JUL     145.05 + 0.05
JUL      1835 + 10                                             SEP     146.45 unch
SEP      1856 + 10                                            DEC     148.25 – 0.05
NOV     1876 + 10                                             MAR    150.10 – 0.05
JAN      1899 + 10                                             MAY    151.40 – 0.10

12th. June, 2015.
The International Coffee Organisation have reported that the global coffee supply for the present October 2014 to September 2015 coffee year and including the official 2014 Brazil crop figures shall prove to be a modest 141.9 million bags and therefore in terms of their assessment of world coffee demand, be a deficit supply of approximately 8 million bags.   This global supply figure is however very much related to the generally conservative official production figures from the producers and one might think that while there is no question of it being a deficit coffee year, that the deficit is potentially more modest in nature and one that has been more than adequately covered by the significant stocks in Brazil in particular, which were carried into this coffee year.

Meanwhile in terms of the new Brazil crop which shall actually only reflect in terms of the figures for the forthcoming October 2015 to September 2016 coffee year, the Brazil new harvest has already started and with the traditionally early start to the conilon robusta coffees in Brazil, the Brazilian analysts Safras & Mercado have estimated that already 28% of this new crop has been harvested.   This new crop they have forecasted to be a higher 50.4 million bags and therefore, in line with many other recent private trade and industry forecasts for a new Brazil crop of in excess of 50 million bags.   Against which they estimate, approximately 21% of this new crop has already been sold.

The Agricultural Food and Fisheries Authority in Kenya have forecasted that due to the biannual nature of their coffee crops and this being a down year, that coffee production in 2015 shall be 8.16% lower than last year’s crop at a total of 750,000 bags.    This figure while not very much out of line with many private trade and industry reports and forecasts, is a very much rounded figure and has to be seen to be an approximate figure.   

The United States based Climate Prediction Centre of their National Weather Service have predicted that the El Nino phenomenon within the Pacific ocean that is presently in play might become stronger later in the year and has the potential, to remain a factor into the first quarter of next year.   This El Nino likely to bring with it dryer weather for the Pacific rim coffee producers such as Colombia, Peru, Indonesia and Vietnam, but increased spring and early summer rainfall for the main south east Brazil coffee districts.

However so far and while the El Nino is a positive factor for the prospects of the next 2016 Brazil crop and a potentially negative factor for next year’s coffee supply from Colombia, Peru, Indonesian and Vietnam, there has been no noticeable reaction from the speculative sector of the coffee markets.  But should the El Nino strengthen significantly there is no doubt that it would attract additional interest and speculation and therefore, it still has the potential to bring more volatility to the coffee markets.

The arbitrage between the markets has narrowed yesterday to register this at 56.11 usc/Lb., while this equates to an attractive 41.73% 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 1,269 bags yesterday; to register these stocks at 2,127,959 bags. There was meanwhile a larger in volume 7,219 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,415 bags.

The Certified Robusta coffee stocks held against the London market are seen to have risen by 63,833 bags or 2.12% over the two weeks of trade leading up to Monday 8th. June; to register these stocks at 3,072,500 bags.   This is a relatively modest rise for this time of the year with the availability of good quantities of new crop Vietnam, Indonesia and Indian robusta coffee, which is mostly related to the internal market price resistance within these producers that is inflating prices above tenderable parity and is slowing deliveries of stocks to the exchange.  However one might think that with the new Vietnam crop due to start in four months’ time and an estimated 40% of the recent new crop stocks still held within the internal market, that there might despite the prevailing soft prices within the London market, soon be some more selling aggression and more coffees coming to the exchange during the third quarter of this year.

The U.S. dollar showed some renewed muscle and the commodity markets were generally softer yesterday, with the overall macro commodity index taking a softer track for the day.   The Orange Juice and Silver markets showed some buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn, Soybean, 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 1.23% lower to see this Index registered at 424.56.  The day starts with the U.S. Dollar steady and selling at 1.551 to Sterling and 1.124 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 63.75 per barrel.   

The London and New York markets started the day taking a softer stance in thin trade and maintained this track into the afternoon trade, which with the added negative influences of a weaker Brazil Real and the softer macro commodity index attracted additional selling pressure and triggered sell stops to increase the volumes of trade and to see both markets losing some more weight.   This remained the track for the rest of the day and with the markets taking a mostly sideways negative track, to set a soft overall close for the day.   The London market ended the day on a soft note and with 68.2% of the losses of the day intact, while the New York market ended the day on a likewise soft note and with 82% of the earlier losses of the day intact.   This soft close does little to inspire but one might expect to see a cautiously steady to perhaps marginally buoyant start for early trade today against the prices set yesterday, as follows:

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

JUL      1711 – 29                                             JUL      132.00 – 4.45
SEP      1727 – 30                                             SEP     134.45 – 4.10
NOV     1746 – 29                                             DEC     138.05 – 3.90
JAN      1764 – 29                                             MAR    141.50 – 3.65
MAR     1785 – 29                                             MAY    143.40 – 3.50
MAY     1806 – 29                                             JUL     145.00 – 3.45
JUL      1825 – 29                                             SEP     146.45 – 3.45
SEP      1846 – 29                                             DEC    148.30 – 3.45
NOV     1866 – 29                                             MAR    150.15 – 3.35
JAN      1889 – 29                                             MAY    151.50 – 3.20

11th. June, 2015.
The United States Department of Agriculture Foreign Agriculture Service have come forth with their forecast for the Ethiopian Coffee production and exports for the countries forthcoming marketing year, which would presumably be related to the official financial year from the 8th. July 2015 to the 7th. July 2016.   In this respect they foresee production for this coming year to be 33,333 bags or 0.51% higher than the previous 2014 to 2015 marketing year, at a total of 6,508,333 bags.    The report forecasts that domestic consumption for the forthcoming marketing year shall be 2,995,000 bags, which would indicate an exportable factor of 3,513,333 bags for this coming coffee year.

The production figures within Ethiopia and similar to other relatively high domestic consumption producers such as Indonesia are however a difficult to accurately quantifiable, as while there are quantifiable figures that are related to deliveries to formal industry roasters and to the exporters, there is very little control over the numbers related to informal farmer to rural roasters.    This is perhaps particularly the case with the approximate 4 million small scale farmers who produce the Ethiopian coffee crop, with the farmer’s home roasting their own coffee requirements and presumably delivering unofficial coffee to friends and families within both the rural and urban communities, for home roasting.

The report is nevertheless positive for the Ethiopian coffee industry in terms of its view that Ethiopia shall maintain its production levels for the coming year, to easily retain its dominant share of African coffee production and to run neck and neck with Uganda, in the lead of African coffee supply to the consumer markets.   The problem is however that Ethiopia has to market its arabica coffees into the prevailing soft value of the international coffee prices, which is a factor that might suppress incentive to for farmers to further expand coffee production for the future and to consider other crop alternatives.  Albeit that the firmer value of the U.S. dollar has taken some of the bite out of the negative effects of the soft coffee prices, in terms of financial returns to the countries coffee farmers.

With the climatic conditions within Brazil normal to even good sees this factor no longer making news and it is likewise the case for all of the other producer blocs for the present, which removes any speculation on climatic issues for medium to longer term world coffee supply.  Albeit that there is a general view that there shall be a modest deficit in overall supply through to the next 2016 to 2017 coffee year, which will be easily countered by relatively good world coffee stocks and is therefore a factor that provides no real support for the speculative forces within the international coffee markets.   Thus with unforeseen weather issues developing for any of the leading producer blocs aside, the markets are seemingly looking to retain their prevailing trading range for the foreseeable future.   But perhaps threatened later in the year, should Brazil encounter yet another frost free June and July winter season and be in receipt of a good start late in September and follow on rains during the last quarter of the year, to indicate a 60 million bags plus new crop for 2016.  

The arbitrage between the markets has broadened yesterday to register this at 58.85 usc/Lb., while this equates to an attractive 42.48% 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 3,725 bags yesterday; to register these stocks at 2,126,690 bags. There was meanwhile a smaller in volume 950 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 57,634 bags.

The commodity markets were mixed yesterday, but with the overall macro commodity index showing some buoyancy and seeing the markets taking a steady track for the day.   The Oil, Natural Gas, Cocoa, London robusta Coffee, Cotton, Copper, Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy, while the Sugar, New York arabica Coffee, Wheat, Corn and Soybean markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.13% higher to see this Index registered at 429.87.  The day starts with the U.S. Dollar steady and selling at 1.549 to Sterling and 1.131 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 64.70 per barrel.   

The London market started the day on a steady note yesterday and with the New York market coming in with some early buoyancy within an environment of thin trade and with the London market soon moving up into positive trade and to see both markets enter the afternoon on a positive track.   The New York market did however encounter some selling pressure to take it briefly back to par and with a recover to join London on its positive track as the afternoon progressed.   The New York market did however once again shrug off any support that might have come with the latest and most certainly questionable modest official new 2015 coffee crop from Brazil and to move back into negative territory for late afternoon trade, with the London market likewise coming under some more modest pressure to come back towards par.    The London market ended the day with modest buoyancy and with 35.7% of the earlier gains of the day intact, while the New York market ended the day on a softer note and with 52.6% of the earlier losses of the day intact.   This lacklustre close to the day’s trade is unlikely to inspire much confidence and one might expect to see a thinly traded steady to perhaps marginally softer start for early trade today against the price set yesterday, as follows:

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

JUL      1740 + 6                                               JUL      136.45 – 0.90
SEP      1757 + 5                                               SEP     138.55 – 1.00
NOV     1775 + 3                                               DEC     141.95 – 1.05
JAN      1793 + 2                                              MAR     145.15 – 1.05
MAR     1814 + 2                                              MAY     146.90 – 1.10
MAY     1835 + 2                                               JUL     148.45 – 1.20
JUL      1854 + 2                                               SEP     149.90 – 1.20
SEP      1875 + 2                                              DEC     151.75 – 1.20
NOV     1895 + 2                                              MAR     153.50 – 1.25
JAN      1918 + 2                                              MAY     154.70 – 1.25

10th June, 2015.

Brazil’s official National Crop Supply Agency CONAB came forth with their latest coffee crop forecast yesterday.  They have forecast for this new coffee crop which harvest is currently underway, that the arabica coffee production may be marginally larger than their figure for the 2014 crop of 32.3 million bags, at 32.91 million bags.  While they have forecast the conillon robusta production to be marginally lower than their figure for the 2014 crop of 13 million bags, at 11.35 million bags. Therefore their second forecast for this new July 2015 to June 2016 crop year is estimated to bring in a rounded total 44.28 million bags.  This figure is toward the lower end of current general industry and trade forecasts and marginally above their earlier low of estimate which stood at between 44.1 million and 46.6 million bags and is 2.35% decline on that of their assessment of last year’s 2014 crop at 45.34 million bags.

This crop estimate may be considered to be somewhat conservative with particular reference to the Brazil conillon robusta coffee figure, which across a median of ten trade and industry forecasts is put at an average of 13.83 million bags and even this, including a very low estimate of 10.70 million bags and the high at 17.70 million bags for this forthcoming new 2015 crop. There is a general acceptance meanwhile that the key robusta growing area in Espirito Santo had suffered from dry weather during crop development, the severity of the potential losses are still to be determined while the crop is being harvested and most analysts remain at the higher end of estimates; of between 14 to 16 million bags.  Thus if one is to say work on 15 million bags as an estimate for conillon robusta coffees in 2015, it would inflate the CONAB over all crop production figure closer to 47.91 million bags.  Indications are meanwhile, that there is conillon robusta carryover stock, to cater to the main Brazil domestic consumer market for their favoured coffee, as well as respectable stocks being held in consumer market warehouses; with the new crop harvest now coming to the fore the medium term outlook may be anticipated to remain steady.  

The Association of Coffee Exporters in Brazil have revised their April 2015 export figure to a total of 2.87 million bags, and announced their more detailed May export figures. In this respect, green coffee exports for the month were registered at a total 2.50 million bags green coffee with 2.09 million bags arabica and 404,561 bags conillon robusta, in addition to the 286,894 bags of soluble in equivalent green coffee.  This would result in a combination of green coffee and value added soluble exports for the month being 240,000 bags below that on the same month last year and a total of 2.78 million bags. 

The National Coffee Association in Guatemala have reported that the country’s coffee exports for the month of May to have reached a total 392,814 bags.  This figure and following a slow start to their coffee year so far, contributes to the cumulative coffee exports for the first eight months of the present October 2014 to September 2015 coffee year being 267,799 bags or 13.04% lower than the same period in the previous coffee year, at a total of 1,785,072 bags.

The arbitrage between the markets has narrowed yesterday to register this at 58.70 usc/Lb., while this equates to an attractive 42.73% 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 comparatively firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange reported a decrease of 9,754 bags yesterday; to register these stocks at 2,122,965 bags. There was an increase of 7,615 bags to the number of bags pending grading for this exchange; to register these stocks at 58,584 bags.

It was a mixed day on the commodity markets yesterday, the Oil markets boosted by the anticipation of lower inventory data to come from the USA., in Europe the meetings being held in Brussels and talks surrounding the Greek fiscal crisis took centre stage, while the US Dollar posted a softer day.  It was a positive day for the Oil markets, Cotton, Copper, Orange Juice, Corn, Wheat, Soybean, Coffee markets and Gold, Silver, Platinum on the day.  It was a mildy lower day for Cocoa, Sugar and Palladium.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.77% higher to see this Index registered at 429.32.  The day starts with the U.S. Dollar trading at 1.542 to Sterling and 1.13 to the Euro, the Brazil Real at 3.097 and North Sea Oil is firm in early trade, selling at 64.43 per barrel.   

The coffee markets started the day yesterday on steady to slightly softer note with fair opening volume in New York and light volume in London. The morning session followed on this trend with New York leading from the front and downward pressure in the morning dipped this market to the lows, met with underlying buyer support to quickly lift this market back to modestly negative levels, where at this point 43.77% of the trade volume of the day had triggered. The afternoon session brought addition support with first notice day approaching for the prompt month on 22nd June, spread activity to provide some buoyancy to see this market finish the day in positive territory after a heavy volume day.  It was a much more sedate day for London, which remained range bound for much of the session.  This market managed to gather enough momentum in the late afternoon, to break out and into the positive when a degree of the buoyant sentiment in New York, appeared to spill over to this more reluctant hand to mouth market, although with light origin sellers waiting at the top.  While New York continued to build on the gains to the latter end of the day, London shed its gains and in a good volume day, the markets finished near to the days’ highs in New York and in positive territory closer to the middle of the days’ range in London, to set the close yesterday as follows: 

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

JUL      1734 + 10     JUL   137.35 + 0.80
SEP      1752 + 12       SEP   139.55 + 0.80 
NOV     1772 + 13       DEC   143.00 + 0.80
JAN      1791 + 13       MAR  146.20 + 0.70
MAR     1812 + 13       MAY  148.00 + 0.60
MAY     1833 + 13       JUL   149.65 + 0.65
JUL      1852 + 13       SEP   151.10 + 0.75
SEP      1873 + 13       DEC  152.95 + 0.80
NOV     1893 + 13       MAR  154.75 + 0.85 
JAN      1916 + 13 MAY  155.95 + 0.90

9th June, 2015.

The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market increase their net long position within the market by a marginal 44 Lots over the week of trade leading up to Tuesday 2nd June; to register a net long of 8,126 Lots on the day.   This net long that is the equivalent of 1,354,333 bags has most likely been extended over the period of overall buoyant trade, which has since followed.

There is some anticipation meanwhile, regarding the prospects for Brazil’s official National Crop Supply Agency (CONAB) second crop forecast for the 2015/2016 crop harvest currently underway, which is due to be released later today.  Their first estimate for this crop which was published in January, had estimated a slightly higher arabica output and slightly lower robusta production against the previous crop year.  This July 2015 to June 2016 forecast was pegged at a combined crop of between 44.1 million and 46.6 million bags.  This while private trade and industry and independent survey forecasts have since varied from a relatively conservative low of 40.30 million bags to the highest estimate at 52.40 million bags.  

The overall median for this Brazil crop from sixteen forecasts published by Reuters since January and including the first CONAB estimate report, now stands at an average 47.42 million bags, for supply to international consumer markets approximately 30 to 33 million bags and Brazils’ own local consumption at around 20 to 21 million bags per annum, the big question remains how much carryover unsold stocks are being held within Brazil ahead of this new harvest to sustain consumer demand into the next 2016 to 2017 crop that will start flower and development in the fourth quarter of this year, is set to be a biennially heavier bearing crop year for Brazil.  So long as climatic conditions remain conducive for this next crop to develop into 2016 one might expect that this should be a higher overall producing year due to the biennial nature of the crop traditionally and with a potential for some recovery of production in areas that were so severely affected by the unseasonably dry weather over the rainy season months at the beginning of last year.  

While there is a degree of resistance by producers at the prevailing lower values set against a softer New York for new business, many of whom are focused on the new harvest, there is nevertheless a steady flow of previously concluded Brazil coffee shipments that are being exported to consumer markets.  In addition, key northern hemisphere consumer markets are now entering their traditionally slower summer consumption months, where roasters have long since taken cover and are most likely obliged to stay out of the market, with a result that there is little pressure to participate and therefore reason to anticipate that physical coffee business may turn sluggish as the summer months progress.  

The arbitrage between the markets has narrowed yesterday to register this at 58.35 usc/Lb., while this equates to an attractive 42.73% 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 comparatively firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange reported an increase of 4,381 bags yesterday; to register these stocks at 2,132,719 bags. There was a decrease of 7,817 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 50,969 bags.

It was a more positive day on the commodity markets yesterday; despite the leading in influence Oil markets mainly softer on the day, the rest of the board took heart from a weaker US Dollar against other major currencies.  It was an improved day for Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Soybean, and a positive finish in the Orange Juice market.  In the metals; Gold edged up as was Platinum mildly positive, with Silver and Palladium losers on the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.94% higher to see this Index registered at 426.05.  The day starts with the U.S. Dollar trading at 1.536 to Sterling and 1.13 to the Euro, the Brazil Real at 3.112 and North Sea Oil is steady in early trade, selling at 61.44 per barrel.   

The coffee markets started the day yesterday on a softer note and in light volume, to see the early morning session in New York continue to trade mildly below opening levels and London a little more pressured and in negative territory. The early attempts at improvement in New York, were met with some resistance but with the support of speculative short covering this broke through opening levels to lead the day into positive territory and a build upon the gains in New York into the afternoon.  The London robusta market followed suit although in still relatively low volume. A strong sell entered the New York market with some volume to support the move and this pushed levels back to unchanged briefly, before another run higher, and with the support of the weaker US Dollar, this market regained much of the losses and more. Mostly lead by speculative support, a degree of origin selling activity moved back onto the floor at the highs of the day, to see this market finish with some earlier gains lost nevertheless near to the days’ high and in positive territory.  The London market took a cue from more active New York and followed a similar trend although having started negatively and recovered some of the losses over the day, this market touched unchanged briefly, but with light producer sellers waiting in the wings, the gains were removed and a finish in London toward the upper end of the days’ trading range but still in mildly negative territory, and the markets settled to a close yesterday, as follows: 

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

JUL      1724 – 4       JUL 136.55 + 1.45
SEP      1740 – 6         SEP 138.75 + 1.35 
NOV     1759 – 6       DEC 142.20 + 1.30
JAN      1778 – 6         MAR  145.50 + 1.15
MAR     1799 – 7         MAY  147.40 + 1.10
MAY     1820 – 8         JUL   149.00 + 1.15
JUL      1839 – 8         SEP   150.35 + 1.15
SEP      1860 – 8         DEC 152.15 + 1.10
NOV     1880 – 8         MAR  153.90 + 1.05
JAN      1903 – 8   MAY 155.05 + 1.05

8th June, 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 12.61% in the week of trade leading up to Tuesday 2nd June; to register a net short sold position of 18,899 Lots.  This net short sold position which is the equivalent of 5,357,782 bags has most likely been additionally trimmed over the period of mostly positive trade last week. 

The Colombian Coffee Growers Federation has reported that the country’s coffee production for the month of May was 115,000 bags or 11% higher than the same month in the previous year, at a total of 1,165,000 bags. This higher performance follows many months of rising production levels and the cumulative production for the first eight months of the present October 2014 to September 2015 coffee year is now 427,000 bags higher than the same period in the previous coffee year, at a total of 8,308,000 bags.

In a similar thread, the fine washed arabica coffee exports from Colombia have increased and the Coffee Growers Federation has reported that coffee exports for the month of May were 170,000 bags or 17% higher than the same month last year, at a total of 1,006,000 bags.   This improved performance has contributed to the countries cumulative exports for the first eight months of the present coffee year to be 369,000 bags higher than the same period in the previous coffee year, at a total of 7,891,000 bags. 

While there have been some reports from the interior regarding difficulties in acquiring labour for the harvest of the midyear crop that is currently underway, all indications are now that with the Mitaca crop harvest underway, Colombia is on track for the present coffee year towards production of close to 13 million bags. 

The well respected Brazil analyst Safras e Mercado that have placed their new Brazil crop forecast at 50.4 million bags, have reported that they foresee this current crop to be approximately 20% harvested, in line with the average rate of harvest over the past five years.  This despite the reports of some light wet weather in the region of Minas Gerais and Sao Paulo, that is likely a minor setback in pockets of this vast area, whereas the more north and eastern Conillon robusta areas harvest is closer to completion, for the natural arabica coffee crop that is estimated by Safras e Mercado to be 36.1 million bags this coming July 2015 to June 2016 coffee year, it is thus far all progressing well. The Brazil Real meanwhile, is steady to the US Dollar and trading at 3.143 to the US Dollar this morning. 

The arbitrage between the markets has narrowed yesterday to register this at 56.72 usc/Lb., while this equates to a still 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 comparatively firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange reported an increase of 3,058 bags yesterday; to register these stocks at 2,128,338 bags. There was a decrease of 3,829 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 58,786 bags. 

It was a mixed day for the commodity markets on Friday, the latest payroll data from leading U.S.A., released for the month of May, received as an improvement on market expectations and provide a boost for the US Dollar against other major currencies on the day.  It was a relatively steady day for the Oil markets which finished in positive territory together with Copper, Orange Juice.  It was an overall lower day for Grains, Corn, Wheat and Soybean futures fell, as was it a softer day for Cocoa, Sugar, Coffee, Gold, Silver, Platinum and Palladium on Friday. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% lower to see this Index registered at 422.07.  The day starts with the U.S. Dollar trading at 1.529 to Sterling and 1.11 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 61.37 per barrel.    

The coffee markets started the day on a modestly softer note on Friday, in light volume and both markets in negative territory and range bound for much of the morning, with both markets maintaining their softer stance into the afternoon.  The New York arabica market attracted additional speculative buying support as the afternoon progressed to see this market recover all of the days’ losses and claw back into positive territory briefly, with London following suit although producer activity weighed in to the very limited in volume day for this market, to cap the later session gains and fail to break through to positive territory. The latter day developments and a firmer US Dollar generally weighed in on the New York arabica market where volumes improved toward the latter half of the session and pushed this market back into negative territory, activity picked up pace to register heavy volume at the close albeit within a narrow range of 3.50 usc/Lb., from low to high on the prompt month and a finish near to the middle of the days’ trading range.  It was a much more subdued session in London where this market posted a negative close but having recovered most of the losses sustained during the session, to set the close in both markets on Friday, as follows; 

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

JUL      1728 – 8       JUL 135.10 – 0.60
SEP      1746 – 8         SEP 137.40 – 0.65 
NOV     1765 – 8       DEC 140.90 – 0.55
JAN      1784 – 8         MAR  144.35 – 0.55
MAR     1806 – 5         MAY  146.30 – 0.50
MAY     1828 – 5         JUL   147.85 – 0.60
JUL      1847 – 5         SEP   149.20 – 0.65
SEP      1868 – 5         DEC 151.05 – 0.70
NOV     1888 – 5         MAR  152.85 – 0.75
JAN      1911 – 8   MAY 154.00 – 0.75

5th June, 2015.

Yesterday was the Corpus Christi holiday for Brazil and some other Latin American countries, as it is for some of the countries in Western Europe, which is likely to slow physical trade and with many taking Friday off to bridge the holiday into a long weekend, for the last couple of days of this week. Thus while the countries that host the international markets are still working, one might expect to see relatively lacklustre trade for today and tomorrow.

It is anyhow the start of the summer holiday season for the main northern hemisphere markets and a period within which physical coffee trade tends to slow and unforeseen weather issues aside to spike up speculative and industry cover interest, one can expect to now see two months of relatively slow trade.   

The arbitrage between the markets has narrowed yesterday to register this at 56.95 usc/Lb., while this equates to a still attractive 41.97% 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 comparatively firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange reported an increase of 4,231 bags yesterday; to register these stocks at 2,125,280 bags. There was a decrease of 5,234 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 62,615 bags.  

The commodity markets were mixed yesterday, many posting a softer day with the Oil markets pushed lower early in the day, as speculation surrounding the chances for an interest rate within the largest, US economy took centre stage.  The markets wait for the latest round of jobs numbers data to be released on Friday and a steady day for the US Dollar.  It was a positive day for Grain markets, Corn, Wheat, Soybean, Orange Juice, Coffee, Sugar and Cotton finished higher. The Oil markets finished on a softer note, as was it a softer day for Copper, Cocoa, Gold, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.20% lower to see this Index registered at 422.70.  The day starts with the U.S. Dollar trading at 1.531 to Sterling and 1.126 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 59.93 per barrel.    

The London and New York markets both started the day yesterday with some buoyancy but taking a softer track for the morning session.  The arrival of the America’s leant some short cover support and with the increase in volume of trade in the afternoon, the markets registered a recovery back to positive territory, where both markets tread for the ensuing few hours and with a narrow trading band set, the latter day volumes picked up pace, with sellers moving back in to cap the days’ gains in both markets, and see the close for London robusta and New York arabica, in positive territory near to the middle of the days’ range in both markets, while the Brazil Real maintained a steady 3.14 to the US Dollar for the Corpus Christi holiday in this largest producer market, to set the close yesterday, as follows: 

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

 

JUL      1736 + 13       JUL 135.70 + 1.40
SEP      1752 + 12       SEP 138.05 + 1.25 
NOV     1771 + 12       DEC 141.45 + 1.20
JAN      1790 + 12       MAR  144.90 + 1.20
MAR     1811 + 12       MAY  146.80 + 1.25
MAY     1833 + 12       JUL   148.45 + 1.25
JUL      1852 + 12       SEP   149.85 + 1.25
SEP      1873 + 12       DEC 151.75 + 1.20
NOV     1896 + 12       MAR  153.60 + 1.20
JAN      1919 + 12 MAY 154.75 + 1.15

4th June, 2015.

Ahead of the new Arabica crop which is picking up pace and the Conilon robusta harvest that begins earlier and is estimated to be around 70% complete in Brazil, there has been some positive news for Brazilian coffee producers. In a supportive move for their main agricultural commodities, the ministry of Agriculture in Brazil have confirmed their farm budget for the 2015 to 2016 crop year to be 187.7 billion reais, or 59 billion US Dollars, which is an increase of 20% on that of last year’s budget for allocation to their agricultural sector highlighting the importance of agriculture within their overall fiscal policy, where other sectors are have not benefited in the same manner in line with the prevalent government policy to cut back on expenditure.  The additional funding is hoped to maintain and encourage producers in this country, which is already the top world producer of sugar, coffee and beef and second to America in soybean production, to expand area planted and will assist to provide subsidized credit to farmers, as well as continued support for development projects to boost their already bustling agriculture sector. 

Within this fund, Brazil has allocated 8% more resources this year to the coffee sector, through the coffee development fund, known as Funcafe.  This will make 4.136 billion reais or 1.3 billion US Dollars available in credit to assist with financing production, processing, storage and sale of the coffee crop this coming crop year.  Although much of the support will be in the form of subsidized credit for which the interest rate has increased this year against last, at 7.75% for medium sized farmers and 8.75% percent for large agribusiness, this is still more supportive than the current central bank lending rate at 13.25% and will be welcome news to producers, who are preparing for peak harvest set to start in earnest in the next month.

The weather in Brazil has been mild thus far, the prospective fears of cooler winter weather and talk of frost possibilities now very firmly a thing of the past. Apart from the generally accepted global warming phenomenon, coffee has for the most part been moved out of the traditionally colder frost susceptible growing areas.  There have been some reports of unseasonal light rain in the main arabica regions and as late as this week, which could contribute toward a delayed ripening in some small pockets of this vast growing area, but finally any slower ripening may be conducive to quality and alleviate some early harvest pressure, thus is no real concern.  It is meanwhile, a long weekend holiday in Brazil starting today and for tomorrow, the Brazil Real is trading at 3.133 to the US Dollar this morning, only limited commercial activity may be foreseen in Brazil to the end of this week.  

The arbitrage between the markets has narrowed yesterday to register this at 56.15 usc/Lb., while this equates to a still attractive 41.81% 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 comparatively firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange reported an increase of 1,388 bags yesterday; to register these stocks at 2,121,049 bags. There was a decrease of 6,249 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 67,849 bags. 

The commodity markets were mixed yesterday, with the leading in influence Oil markets tending softer at the outset and additional pressure through the day weighed a weaker US Dollar.  It was a lower day for Oil, Wheat, Soybean, Corn, Sugar, Copper, Gold, Silver, Platinum and Palladium.  It was however, a better day for Cotton, Cocoa, arabica Coffee and Orange Juice. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.70% lower to see this Index registered at 423.53.  The day starts with the U.S. Dollar trading at 1.531 to Sterling and 1.126 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 62.21 per barrel.   

The coffee markets opened the day on a mildly positive note, the start in New York assisted to guide London which was otherwise listless and lacking in directional inspiration. The morning session turned buoyant for New York which continued to build upon the gains to the afternoon in this market and the speculative sector were again seen to be active in covering shorts.  The fortunes of the US Dollar weighed in on the market later on in the session and this had some influence on the softer turn for the afternoon.  With improved volume in the afternoon the sellers returned to the market and New York shed earlier gains on the day, back to negative territory but was short lived as buyer support returned to the floor and gradually this market regained ground to settle just off of the days’ highs. The London robusta market was muted in comparison, although volume was fair trade remained within a narrow range and following New York, positive in the morning but turning negative toward the end of the day, the mood improved toward the very end of the day in this market to see the London Robusta market finish the day unchanged and after a choppy but buoyant session in New York, to set the close yesterday as follows; 

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

JUL      1723 Unch       JUL 134.30 + 1.60
SEP      1740 Unch       SEP 136.80 + 1.75 
NOV     1759 Unch       DEC 140.25 + 1.70
JAN      1778 Unch       MAR  143.70 + 1.65
MAR     1799 Unch       MAY  145.55 + 1.65
MAY     1821 Unch       JUL   147.20 + 1.75
JUL      1840 Unch       SEP   148.60 + 1.70
SEP      1861 Unch       DEC 150.55 + 1.70
NOV     1884 Unch       MAR  152.40 + 1.55
JAN      1907 Unch         MAY 153.60 + 1.50

3rd June, 2015.

It is early in the month for Vietnam robusta coffee exports to be forecast for the month of June, however the early trade estimates are for exports Vietnam mostly robusta coffee to be anywhere between 1.17 million to 2 million bags this month.  The vast difference in opinion in the quantity of export potential for June stems from the general opinion that there are still sizeable stocks of robusta coffees being held unsold from the last October 2014, to January 2015 harvest and these stocks still have to come to the market.  The prevailing internal market price resistance within Vietnam however is presently inflating export differentials for robusta coffees, relative to the London robusta coffee market which in turn is providing at these lower London robusta market levels, little incentive for the farmers and internal traders to start to liquidate stocks, while consumer market industry buyers are restrained heading into the warmer summer and traditionally lower consumption months in the northern hemisphere.

The well respected United States Department of Agriculture Foreign Agricultural Service has come forth with their latest forecast for the new April 2015 to March 2016 arabica coffee crop and production in Peru to be 4.2 million bags and a potential increase of 4% on that of the previous year.  Alike Central America, as a combined washed Arabica producer bloc, Peru similarly suffered from an expansive and destructive roya or leaf rust outbreak two years ago which had a marked effect on the overall coffee production in 2014 but is anticipated to register a recovery year on year, with climatic anomalies aside, has a potential to return back to production levels of 4 million bags and over, as was achieved prior to the leaf rust outbreak. 

The recent bout of new Brazil crop forecasts has seen the addition of the Neumann Kaffee Gruppe estimates for the new crop, which is added to the Reuters list of international trade house and Brazilian local forecasters, with their estimate to be around the middle of the comparative estimates, which for the current year July 2014 to June 2015 is pegged at 49.30 million bags.  The forecast for the approaching July 2015 to June 2016 crop year which would aside from the recovery of the drought exposure last year, be a cyclically lower biennial production year, is similarly within the median range of forecasts at 47.30 million bags. 

The arbitrage between the markets has narrowed yesterday to register this at 54.54 usc/Lb., while this equates to a still attractive 41.10% 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 comparatively firm arabica coffee prices.   

The Certified washed Arabica coffee stocks held against the New York exchange reported a decrease of 20,531 bags yesterday; to register these stocks at 2,119,661 bags. There was an increase of 13,579 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 74,098 bags.

The commodity markets gained some degree of support from the weaker U.S. Dollar yesterday, while the Euro had a boost in confidence with the indications that Greece is closer to a deal with its creditors.  It was a positive day for much of the commodities board, apart from Palladium which had a mildly lower finish and Orange Juice which registered a negative 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 426.52.  The day starts with the U.S. Dollar trading at 1.534 to Sterling and 1.143 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 62.85 per barrel.   

It was a buoyant day for the coffee markets yesterday, albeit that both London and New York markets started the day on a steady to softer note.  Once the initial lows were tested in New York however, this market soon started to attract speculative buying support in a continuation of the recent run of short covering by this sector of the market, triggering stops along the way and both markets headed into the afternoon on a positive note.  The early gains in New York settled into a new trading range for the afternoon within a more restrained band as the speculative shorts continued to play an active role and light origin selling activity returning at the top of the days’ gains.  This was similarly a trend in the London Robusta market which continued on a positive track to end the day near to the day highs in this market. The support built within the market in New York however did not hold all the way to the end of the session and this market shed some of the latter day gains to set the close nevertheless in positive territory and the close in both markets yesterday, as follows:  

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

JUL      1723 + 24       JUL 132.70 + 2.90
SEP      1740 + 22       SEP 135.05 + 3.00 
NOV     1759 + 22       DEC 138.55 + 2.90
JAN      1778 + 21       MAR  142.05 + 2.85
MAR     1799 + 20       MAY  143.90 + 2.75
MAY     1821 + 20       JUL   145.45 + 2.65
JUL      1840 + 18       SEP   146.90 + 2.10
SEP      1861 + 15       DEC 148.85 + 2.55
NOV     1884 + 15       MAR  150.85 + 2.50
JAN      1907 + 43 MAY 152.10 + 2.45

2nd June, 2015.

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 42.53% over the week of trade leading up to Tuesday 26th May; to register a net long of 8,082 Lots on the day. This net long that is the equivalent of 1,347,000 bags has most likely remained been extended over the period of overall buoyant trade, which has since followed.

The International Coffee Organisation has reported that global coffee exports for the month of April were 920,000 bags or 9.75% lower than the same month last year, at a total of 9.43 million bags.    This contributing to the cumulative global coffee exports for the first seven months of the present October 2014 to September 2015 coffee year to be 3.8% lower than the same period in the previous coffee year, at a total of 62.51 million bags.   

The National Coffee Institute in Costa Rica has reported that the country’s coffee exports for the month of May were 27,873 bags or 15.73% lower than the same month last year, at a total of 149,297 bags.  The cumulative coffee exports for the first eight months of the present coffee year are 85,175 bags or 9.68% below the same period in the previous coffee year, at a total of 794,020 bags. 

The National Coffee Institute of Honduras has reported that the country’s coffee exports for the month of May were 225,525 bags or 35.88% higher than the same month last year, at a total of 854,052 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 eight months of the present October 2014 to September 2015 coffee year are 1,128,110 bags or 36.25% higher than the same period in the previous coffee year, at a total of 4,239,759 bags. 

The preliminary May coffee exports from Brazil have been reported to have been 62,094 bags or 2.36% lower than the same month last year, at a total of 2,630,419 bags.  The Brazil Real has meanwhile slipped back in value to above 3.10 Reais to the U.S. Dollar, but the weaker currency has had a significant influence upon the internal market selling activity and for the present, there remains a degree of price resistance on the part of the farmers of their now much depleted stock coffees.  One might anticipate that Brazil sales and exports may continue at a sluggish pace for the next couple of months and until such time as the new crop arabica coffees start to impact upon the market, in increased volume.   

The arbitrage between the markets has narrowed yesterday to register this at 52.73 usc/Lb., while this equates to a still attractive 40.62% 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 831 bags yesterday; to register these stocks at 2,140,192 bags.  Similarly, there was a 6,075 bag decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 60,519 bags.  

The commodity markets registered a buoyant morning session yesterday, as the latest round of U.S. economic data in manufacturing was positively received by the markets, while the U.S. Dollar regained some muscle through the day to dampen the gains, a mixed close for commodities on the day.  The Oil markets lost ground, and similarly a lower day for Cocoa, Cotton, Copper, Gold held steady, although a softer day for Silver, Platinum and Palladium.  It was a more positive day for Sugar, Orange Juice, Wheat Corn and Coffee. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.52% higher to see this Index registered at 423.29.  The day starts with the U.S. Dollar trading at 1.522 to Sterling and 1.095 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 63.56 per barrel.   

The coffee markets started the day on a positive note from the outset, spurred on by the positive sentiment within commodities and within coffee, the latest commitment of traders’ publication for the New York arabica market and the speculative short sold position at 21,626 lots for the week leading up to Tuesday 26th, last week. It was a positive reaction in both London and New York which gapped higher into a void of seller activity as speculative shorts took some cover. The markets settled into the new higher trading range once the initial flurry flattened out as the more attractive levels brought origin and speculative sellers back to the floor, and the day progressed at a measured pace, in a positive range for both markets for the day.  The latter day session saw both markets shed some of the gains during the day, with the advent of a firmer U.S. Dollar and in combination with a weaker Brazil Real to weigh in on both markets which finished the day in a positive range, but off of the days’ highs, to set the close yesterday after a fair trade volume day and on a buoyant note, as follows: 

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

JUL      1699 + 67       JUL    129.80 + 3.65
SEP      1718 + 65       SEP 132.05 + 3.45 
NOV     1737 + 65       DEC 135.65 + 3.35
JAN      1757 + 65       MAR     139.20 + 3.30
MAR     1779 + 65       MAY     141.15 + 3.10
MAY     1801 + 63       JUL     142.80 + 2.95
JUL      1822 + 60       SEP     144.80 + 2.90
SEP      1846 + 60       DEC     146.30 + 2.70
NOV     1869 + 59       MAR     148.35 + 2.60
JAN      1864 + 59 MAY 149.65 + 2.50

1st June, 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 213.37% during the week of trade leading up to Tuesday 26th. May;  to register a net short sold position of 21,626 Lots.  This net short sold position which is the equivalent of 6,130,875 bags has most likely been marginally trimmed, over the period of steady sideward trade which ended off the sedate volume trade last week.  

With the month of May passed the latest coffee export statistics are being published, starting with the Indonesian Government trade authorities within Indonesia’s main robusta producing island of Sumatra, who have revised upward previous February and April months of exports and reported an increase in May coffee exports against the same time last year.  The worlds’ third largest Robusta producer revised February exports to 316,650 bags, an increase of 43 percent on the same month last year, and Sumatra robusta coffee exports in April, to have reached a total of 383,210 bags and 122.83% increase on that of the same month last year. 

The Indonesian Government trade authorities have since reported that the islands robusta coffee exports for the month of May were 60,352 bags or 33.16% higher than the same month last year, at 242,330 bags.  This improved performance that rising robusta export volumes for the previous four 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 eight months of the present October 2014 to September 2015 coffee year are 333,389 bags or 11.15% lower than the same period in the previous coffee year, at a total of 2,657,279 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.  While domestic consumption continues to expand, the larger overall crop forecast for the harvest that has begun is seen to be more than adequate to facilitate local and export demand and that by the third quarter of this year see Sumatran robusta coffee exports may 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 arbitrage between the markets has narrowed yesterday to register this at 53.62 usc/Lb., while this equates to an attractive 41.69% 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 16,978 bags yesterday; to register these stocks at 2,139,361 bags.  There was a 12,483 bag increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 66,594 bags.

The Certified robusta coffee stocks held against the London market were seen to increase by 40,333 bags or 1.35% over the two weeks of trade, leading up to Monday 25th May; to register these stocks at 3,008,666 bags on the day.  The increase is partially attributed to the lifting of suspension of some coffees being held in London, to contribute toward the overall increased accepted certified robusta stocks being held against the London market.  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 registered an overall more positive sentiment on Friday, the influential Oil markets took a more positive turn as the latest round of U.S. Oil inventories data were received as bullish indicators for this market.  The overall commodities board was assisted by a steady to later softer US Dollar as the day progressed. It was a positive day for Oil, Sugar, Cotton, Soybean, Coffee, Gold and Silver markets and a softer day for Corn, Cocoa, Copper, Orange Juice, Wheat, Platinum and Palladium on Friday. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.16% lower to see this Index registered at 421.10.  The day starts with the U.S. Dollar at 1.527 to Sterling and 1.093 to the Euro, while North Sea Oil is tending firmer in early trade and is selling at 63.34 per barrel.   

It was a steady opening on the London and New York markets on Friday and in relatively light volume of trade, both London and New York held in positive territory through the morning session.  The range was held to a narrow band until the arrival of the Americas later in the session.  The underlying buyers returned to the floor to contribute toward upward momentum in both markets and a steady to mildly positive close on the day in both markets, the Brazil Real continued a softer track on Friday and is trading at 3.176 against the US Dollar this morning.  The markets finished the day nearer just off the days highs in both markets after a relatively slow and modest volume day in both markets, to set the close on Friday, as follows:  

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

JUL      1632 + 10       JUL 126.15 + 1.00
SEP      1653 +  8       SEP 128.60 + 0.80 
NOV     1672 +  7       DEC 132.30 + 0.70
JAN      1692 +  7       MAR     135.90 + 0.75
MAR     1714 +  5       MAY     138.05 + 0.80
MAY     1738 +  5       JUL     139.85 + 0.75
JUL      1762 +  5       SEP     141.35 + 0.70
SEP      1786 +  5       DEC     143.60 + 0.85
NOV     1810 +  5       MAR     145.75 + 0.80

29th May, 2015.
The arbitrage between the markets has narrowed yesterday to register this at 53.18 usc/Lb., while this equates to an attractive 41.61% 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 676 bags yesterday; to register these stocks at 2,156,339 bags.  There was a 5,278 bag decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,111 bags.

The commodity markets were mixed yesterday, as discussions around the economic debt crisis in Greece returned to headlines in Europe and highlighted in the G7 meetings being held in Germany this week.  The US Dollar remained steady to firmer on the day.  It was a mixed day for the Oil markets, Brent Crude mildly positive on the day and a sluggish and softer day for Soybean, Wheat, Sugar, Cocoa, Silver, Platinum and Palladium. It was a mildly positive day for Corn, Coffee, Copper, Cotton, Gold and a positive close for Orange Juice on 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 421.79.  The day starts with the U.S. Dollar near to steady and selling at 1.531 to Sterling and 1.094 to the Euro, while North Sea Oil is tending firmer in early trade and is selling at 61.14 per barrel.   

It was a steady opening on the London and New York markets yesterday in light volume through the morning session and some buoyancy returned in mildly positive sentiment as the day progressed.  The overall softer macroeconomic sentiment across the board lent an influence later in the session, while the Brazil Real continued on a softer track against the US Dollar yesterday.  

The Brazil Real which is trading at 3.16 against the US Dollar this morning, slipped back through 3.18 to the US Dollar yesterday, similarly leaning in on the sentiment on New York toward the latter half of the session, with London following suit and took a softer turn.  The range in both markets however was comparatively restrained at 2.56% between the earlier high on the day and later in the day low in the prompt month in New York;  and 2.18% range in London. With only limited origin seller participation, both markets moved back to positive territory toward the latter end of the day, to register a close in the middle of the day’s trading range in both markets, and set the close yesterday on a mildly positive note, as follows:

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

MAY     1584 + 4        
JUL      1622 + 4         JUL 125.15 + 0.65
SEP      1645 + 4         SEP 127.80 + 0.60 
NOV     1665 + 3       DEC 131.60 + 0.55
JAN      1686 + 3       MAR    135.15 + 0.45
MAR     1709 + 3       MAY    137.25 + 0.35
MAY     1733 + 3       JUL     139.10 + 0.25
JUL      1757 + 4       SEP     140.65 + 0.25
SEP      1781 + 4       DEC     142.75 + 0.15
NOV     1805 + 2       MAR    144.90 + Unch

28th. May, 2015.
The Brazilian Coffee Industry Association has estimated the countries annual consumption last year to have been approximately 20.33 million bags and is forecasting a 2% growth for the market for this year, which would extrapolate to something in the order of 20.74 million bags.    This is very much in line with many other forecasts and would with the expectation of declining consumer market demand upon advantageous price competitive buying of conilon robusta coffees out of Brazil, suggest that overall dedicated in terms of quality demand for Brazil coffees for the coming October 2015 to September 2016 coffee year shall be in the order of 54 million bags.

This demand figure of 54 million bags and even if it might be 55 million bags, is only marginally lower than many of the latest new crop forecasts and by nature in terms of the evidence of at least 5 million bags of carryover stocks, is not very supportive for speculative market sentiment.    While despite the very recent dip in the international terminal market coffee prices, the firmer dollar that has seen the Brazil Real once again decline to below 3.15 to the dollar, it is allowing for internal market sales to continue and the resulting price fixation selling against the international markets.   Albeit that there might still be some degree of price resistance and therefore, seeing new business being traded at higher differentials to the international market.

The Brazil Government had a disappointing result from their auction yesterday of 38,856 bags of aged state arabica coffee stocks, which resulted in only 735 bags of these coffees attracting support above the reserve prices that were set.   Thus so far in the regular auctions that have been held since April this year, the government has only sold approximately 46,000 bags out of their estimated 1.6 million bags of Federal coffee stocks.   Thus it would seem that with the prevailing international market dictated prices that the price competitive domestic roasters would rather pay up a little for past crop private stocks and new crop coffees, than take advantage of the discounts offered for the aged Federal coffee stocks.

The internal market price resistance to the dictates of the international coffee markets and more particularly the London market within Vietnam continues and farmers and internal traders knowing that many exporters have short sold export commitments to fill, are pressuring the exporters to pay up for their significantly large in volume stocks.   This is forcing exporters to demand very positive differentials for new business and with consumer buyers tending to hold back from such levels, new business trade out of Vietnam is somewhat stalled for the present.   One might comment that the consumer market industries are mostly taking the view that there is a limit to how long such price resistance can carry on for, as it is now only four and half months before the forecasted larger new crops shall start being harvested and by when the farmers and internal market trade shall be forced for both logistical and financial reasons, to have liquidated much of their stocks.

There are concerns within India on the part of the countries exporters as they too are suffering from price resistance on the part of the farmers and it is likewise forcing them to demand premium differentials against the international terminal markets, to sell coffee to the consumer market industries.  Thus for the present and unless there is to be soon a significant recovery in the trading range of the international coffee markets, the exporters are predicting that there shall be a dismal export performance out of India this year.

The problem is however for the producers in general, is that the markets are being pressured lower not only by the prevailing fundamentals of more than sufficient world coffee supply, but also by the effects of the dollar and relatively modest worldwide economic growth, which has seen the funds lose much of their interest in supporting the commodity markets.    Thus while many producers can still value add in terms of premiums over the value of the international terminal markets for new physical business, there is a limit to the extent of the premiums that consumer industries will pay and even with the premiums and against steadily rising costs of production, the farmers within most producer countries are struggling to profit out of their new crop stocks.

This is not a healthy factor for longer term supply, as despite the present situation the world consumption is still on a positive track and if producers are not inspired to invest into increasing yields and production and even with possible weather issues aside, there could be a longer term shortage and tightness of supply developing for the coffee industry.   However in this respect one might suggest that this possibility is two to three years to the fore and not something short term, with the prospects for the present and presuming no weather related damage to leading producers, looking like relatively soft prices for the next couple of years and too late to change the minds of farmers who might think to move into alternative crops.

The arbitrage between the markets has narrowed yesterday to register this at 52.77 usc/Lb., while this equates to an attractive 41.49% 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 3,210 bags yesterday; to register these stocks at 2,157,015 bags. There was meanwhile a smaller in volume 54 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,389 bags.

The commodity markets were mixed yesterday, but mostly continuing on their dollar related downside track for the day.   The Coffee and Soybean markets had a day of buoyancy and the Natural Gas market was steady, while the Oil, Sugar, Cocoa, Cotton, Copper, Orange Juice, Wheat, Corn, Gold, Silver and Platinum markets had a softer day’s trade.  The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.61% lower to see this Index registered at 420.23.  The day starts with the U.S. Dollar near to steady and selling at 1.538 to Sterling and 1.094 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 60.40 per barrel.   

The London and New York markets started the day yesterday on a steady note and with volumes picking up in early afternoon trade, both markets started to show some corrective buoyancy.    The New York market did take a short dip into negative territory while the London market held on to its gains but soon joined again by the New York market in positive territory, but while the continued for the rest of the day on a steady upside track the New York market once again came under pressure to shed much of the gains of the day and hold on to only a modest positive track for the rest of the day.    The London market ended the day on a positive note and with 97.7% of the gains of the day intact, while the New York market ended the day on a modestly positive note and with only 16.7% of the earlier in the day’s gains intact.   This close while overall positive does not inspire very much confidence and one might think to see a modestly softer start for the London market and a near to steady start for the New York market for early trade today against the prices set yesterday, as follows:

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

MAY     1580 + 43                                               
JUL      1618 + 43                                             JUL      124.50 + 0.45
SEP      1641 + 41                                             SEP     127.20 + 0.35
NOV     1662 + 41                                             DEC     131.05 + 0.30
JAN      1683 + 41                                             MAR    134.70 + 0.25
MAR     1706 + 41                                             MAY    136.90 + 0.25
MAY     1730 + 40                                             JUL     138.85 + 0.25
JUL      1753 + 38                                             SEP     140.40 + 0.35
SEP      1777 + 37                                             DEC    142.60 + 0.35
NOV     1803 + 37                                             MAR    144.90 + 0.45

27th. 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 decrease their net short sold position within the market by 64.32% over the week of trade leading up to Tuesday 19th. May;  to register a net short sold position of 3,595 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 3.66%, to register a net long position of 27,396 Lots on the day.

Meanwhile the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 51.15% over the same week;  to register a net short sold position of 6,901 Lots.  This net short sold position which is the equivalent of 1,956,403 bags has most likely been significantly increased over the period of sharply lower 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 market has seen the Speculative sector of this market reduce their net long position within the market by 11.8% over the week of trade leading up to Tuesday 19th. May;  to register a net long of 14,063 Lots on the day.    This net long that is the equivalent of 2,343,833 bags has most likely been further reduced over the period of overall softer trade, which has since followed.

Following a bout of recent new Brazil crop forecasts that all well exceed 50 million bags, the Brazilian export house Terra Forte have forecast that the new crop shall be more in line with many of the earlier in the year more modest forecasts, at 47.28 million bags.    This figure which questions the higher levels of the other recent reports is made up by a forecasted new arabica coffee crop of 32.05 million bags and a conilon robusta crop of 15.23 million bags.   While the report does make mention that following the good rains of late the trees are now looking good and are in recovery after the past year of spells of dry weather, to so far indicate a good and much larger crop in 2016.    

In terms of Rain over the main coffee areas in Brazil and while the country is now within the dry winter season, there are still bouts of rain showers being experienced over the main arabica coffee districts and shall cause some interruptions to the harvesting of the new arabica coffee crop in the coming week.   These rains shall further assist to maintain the fair to good ground water retention levels within the main coffee districts in south east Brazil, to further assist the trees to counter the stress of the new crop harvest.

The Vietnam Governments General Statistical Office have forecast that the countries coffee exports of mostly robusta coffee for the month of May shall be 27.3% lower than the same month last year, at a total of 1.67 million bags.   This to contribute to the countries cumulative coffee exports for the first eight months of the present October 2014 to September 2015 coffee year to being 28% lower than the same period in the previous coffee year, at 14.53 Million bags.  This report tends to further highlight that following the 2014 year end crop of approximately 27 million bags, the extent of price resistant hoarding of stocks by the countries farmers and the potential for surging selling activity that might be due over the next two to three months ahead of the start of the new crop harvest in October.   

The well respected United States Department of Agriculture Foreign Agricultural Service has forecasted that the new crop and coffee production in Vietnam for the forthcoming October 2015 to September 2016 coffee year shall be 28.67 million bags.   This new crop made up by 27.12 million bags of robusta coffees and 1.05 million bags of arabica coffees.  The report also indicates that the country shall have a domestic consumption for the coffee year of approximately 2.17 million bags and would therefore indicate an exportable coffee factor from this new crop of approximately 26.5 million bags.   This would however be aside from the significant volumes of unsold carryover stocks that most likely due to be in place at the start of the new crop, which would contribute to a coffee availability from Vietnam for the consumer markets in the coming coffee year, which might be as high as 30 million bags.  A somewhat bearish factor for the medium term fortunes of the London robusta coffee market.  
 
The arbitrage between the markets has broadened yesterday to register this at 54.28 usc/Lb., while this equates to an attractive 42.79% 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 2,693 bags yesterday; to register these stocks at 2,153,805 bags. There was meanwhile a larger in volume 11,060 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,335 bags.

The commodity markets returned from the long weekend yesterday to more positive economic data from the U.S.A. and renewed speculation for rising interest rates and thus with renewed muscle of the dollar, the overall macro commodity index lost some weight.   The Cotton market nevertheless had a day of buoyancy and the Cocoa market was neat to steady, while the Oil, Natural Gas, Sugar, 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 1.64% lower to see this Index registered at 422.80.  The day starts with the U.S. Dollar near to steady and selling at 1.540 to Sterling and 1.091 to the Euro, while North Sea Oil is steady in early trade and is selling at 62.30 per barrel.   

The London and New York markets started the day yesterday with some early buoyancy in thin trade and continued on a positive track into the afternoon trade, but finally succumbed to the influences of the firmer U.S. dollar and the negative nature of the macro commodity index, to head back into a negative territory and a downside track.   The London market continued to end the day on a soft note and with 85% of the losses of the day intact, while the New York market ended the day on a likewise soft note and with 87.9% of the earlier losses of the day intact.   This soft close does little to inspire, but one might expect to see a cautiously steady start during early trade today against the prices set yesterday, as follows:

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

MAY     1537 – 52                                               
JUL      1575 – 51                                             JUL      124.05 – 2.90
SEP      1600 – 51                                             SEP     126.85 – 2.95
NOV     1621 – 51                                             DEC     130.75 – 2.90
JAN      1642 – 50                                             MAR    134.45 – 2.90
MAR     1665 – 50                                             MAY    136.65 – 2.90
MAY     1690 – 50                                             JUL     138.60 – 2.65
JUL      1715 – 50                                             SEP     140.05 – 2.55
SEP      1740 – 50                                             DEC    142.25 – 2.60
NOV     1766 – 50                                             MAR    144.45 – 2.55

25th. 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 decrease their net short sold position within the market by 51.15% during the week of trade leading up to Tuesday 19th. May;  to register a net short sold position of 6,901 Lots.  This net short sold position which is the equivalent of 1,956,403 bags has most likely been significantly increased, over the period of sharply negative trade which ended off the last two days of high volume trade last week.

The Uganda Coffee Development Authority have reported that the countries coffee exports for the month of April were 68,570 bags or 20.61% lower than the same month last year, at a total of 264,065 bags.   This dip that follows lower volumes for the previous months this year, contributes to the countries cumulative coffee exports for the first seven months of the present October 2014 to September 2015 coffee year being 238,635 bags or 13.07% lower than the same period in the previous coffee year, at a total of 1,587,240 bags.

The value of the coffee exports from Uganda in April this year was likewise US$ 7,680,567.00 or 18.97% lower than the same month last year, at a total of US$ 32,805,613.00.   However with the relatively higher value of exports over the preceding months the value of the cumulative exports for the first seven months of the present October 2014 to September 2015 coffee year are still US$ 19,722,917.00 or 10.5% higher than the same period in the previous coffee year, at a total of US$ 207,480,332.00.

This improved value and despite the lower volumes of coffee that it is related to and in terms of the firmer U.S. dollar that has prevailed in recent months, would indicate that in terms of domestic Ugandan shilling prices that the negative effects of the softer international coffee prices have not been so noticeable.   But one would think that unless there shall soon be some degree of recovery for the international coffee prices that is shall soon start to impact negatively upon the Ugandan coffee farming industry, which is presently on a development track towards annual crops that would exceed 4 million bags.

The well respected United States Department of Agriculture Foreign Agricultural Service has forecasted that the Coffee production in Costa Rica which they had revised higher for the present October 2014 to September 2015 coffee year to 1,397,542 million bags, shall possibly decline further for the next October 2015 to September 2016 coffee year due to much dryer El Nino conditions to around 1.35 million bags.    This reports figure for the 2014/2015 crop is tending to the low side of many other trade and industry reports that talk closer to 1.5 million bags but it is only marginally different and could well be realistic, but with the El Nino so far only looking to be a relatively mild one, only time shall tell if it shall have such a negative impact upon the next crop.

A Reuters survey over nine Brazil coffee exporters in terms of the size of the carryover coffee stocks that shall be on hand by the end of next month, has seen figures that range between 4.5 million and 11.2 million bags, but with the majority estimating between 5 million and 8 million bags.    The carryover stocks shall be the lowest since the 2010/2011 coffee year but in terms of the more recent bout of new crop forecasts that now foresee the presently in progress harvest most likely to well exceed 50 million bags, even the lower levels of carryover coffee stocks estimates would indicate more than adequate coffee for Brazil to maintain steady consumer market supply through to the next 2016 harvest.   Thus the survey and its indication of lower stocks, does little to counter the prevailing bearish sentiment within the market.

The arbitrage between the markets has broadened on Friday to register this at 53.20 usc/Lb., while this equates to an attractive 41.91% 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 2,895 bags on Friday; to register these stocks at 2,151,112 bags. There was meanwhile a smaller in volume 991 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,275 bags.

The commodity markets were softer on Friday, as most markets reacted to the renewed speculation over inflation related possibilities of nearby rising dollar interest rates and the resulting firming of the dollar through the day.   The Orange Juice market nevertheless had a day of buoyancy and the Cocoa, Gold and Platinum markets were steady for the day, while the Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Wheat, Corn, Soybean and Silver markets had a softer day’s trade.   The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.89% lower to see this Index registered at 429.87.  The day starts with the U.S. Dollar steady and selling at 1.548 to Sterling and 1.099 to the Euro, while North Sea Oil closed on Friday selling at 63.62 per barrel.   

The London and New York markets started the day on Friday on a slow and steady note, with the New York market tending to bounce above par and the London market to stay close to par.   This remained the tract into the afternoon trade when the combination of the prevailing bearish sentiment and charts, pre long weekend book squaring and the dollar related softening of the overall macro commodity index started to play a part and both markets headed back into negative territory.   The London market continued to end the day on a very negative note and with 98.2% of the losses of the day intact, while the New York market ended the day on a soft note and with 56.6% of the earlier losses of the day intact.   The London market shall be closed for the Spring Bank holiday in the UK and the New York market shall be closed for the Memorial Day holiday in the U.S.A., while many of the leading Western European countries are close today for the Whit Monday or Pentecost holiday, but one might not expect too much activity immediately post the long weekend and little better than a steady start for early trade tomorrow against the soft prices set on Friday, as follows:

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

MAY     1589 – 55                                               
JUL      1626 – 56                                             JUL      126.95 – 1.50
SEP      1651 – 56                                             SEP     129.80 – 1.45
NOV     1672 – 56                                             DEC     133.65 – 1.45
JAN      1692 – 56                                             MAR    137.35 – 1.45
MAR     1715 – 56                                             MAY    139.55 – 1.45
MAY     1740 – 55                                             JUL     141.25 – 1.45
JUL      1765 – 51                                             SEP     142.60 – 1.65
SEP      1790 – 51                                             DEC    144.85 – 1.70
NOV     1816 – 54                                             MAR    147.00 – 1.85

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