This figure added to an approximate 20 million bags of domestic consumption, would indicate an overall coffee demand for Brazil coffees of 56.5 million bags but was a figure somewhat inflated by the high volumes of opportunist price competitive conilon robusta coffees that have been included within these exports. These conilon robusta coffee exports were inflated in volume not only by the good conilon crop last year, but also by their relatively affordable prices against the inflated value of the Vietnam robusta coffees that came with the internal market price resistance within Vietnam that presently leaves the country with excessive internal market stocks.

Thus one might assume in terms of true consumer market demand for Brazil coffees in terms of the quality of these coffees, is more likely to be the equivalent of 30 million bags of green coffees and 3.5 million bags of processed coffees and along with an added 20.5 million bags of processed coffees, calculated in terms of their green coffee equivalent. These would be factors and with the Vietnam internal market robusta coffee stocks soon due to start chasing the market and reducing demand for conilon robusta coffees from Brazil, which would peg overall demand for the coming twelve months at approximately 54 million bags.

Depending on which of the many 50 million bags plus forecasts for the new Brazil crop that is presently in harvest that one might believe, it would point to this being a crop that shall be between 1.5 million to 4 million bags in deficit. Such a deficit is not really a scare factor as it is far less than the carryover stocks within Brazil from the last crop and so long as the weather conditions in Brazil for the last quarter of this year are normal and contribute to the early forecasts for a 2016 crop in excess of 60 million bags, there is presently no fear over longer term Brazil coffee supply to the consumer markets.

In the meantime and with the new Brazil arabica coffee harvest picking up in volume, the largest Brazil coffee cooperative Cooxupe have reported that by Friday last week 21.9% of the new crop has been harvested. This factor is well behind the estimated 42.5% that had been harvested by the same date last year and the 31.5% by the same date in 2013, but might be seen to be potentially positive in terms of overall quality that comes with the coffee cherries having a longer time on the trees towards maturity and harvest. Albeit that so far the indications are that the new arabica harvest is coming forth with a lower than normal percentage of bold screen 17/18 beans, which is contributing to increased premiums being demanded for the bolder beans by the farmers.

Reports from Colombia are confirming that in line with the mild El Nino phenomenon in the Pacific Ocean that many of the country’s coffee districts are reporting lower than normal rainfall statistics, but with the National Coffee Federation of Colombia reporting that the lower rainfall reports are no yet a matter of significant concern, the Colombian weather does not presently impact upon speculative market sentiment. Thus for the present it is business as usual within Colombia, with most forecasts looking to a crop in excess of 13 million bags for the next October 2015 to September 2016 coffee year.

The arbitrage between the markets has narrowed yesterday to register this at 46.71 usc/Lb., while this equates to a 37.38% 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 increase by 4,557 bags yesterday; to register these stocks at 2,156,357 bags. There was meanwhile a larger in volume 6,677 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 19,409 bags.

The commodity markets took an overall steadier stance yesterday, following the past couple of days of downside movement. The Coffee, Copper, Orange Juice, Corn, Soybean, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Cotton and Wheat markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% lower: to see this Index registered at 421.38. The day starts with the U.S. Dollar near to steady and selling at 1.539 to Sterling and 1.107 to the Euro, while North Sea Oil is showing some degree of buoyancy in early trade and is selling at 56.95 per barrel.

The London market started the day yesterday with some early buoyancy, while the New York market opened on a marginally softer note. This remained the track into the afternoon trade and with the London market adding additional value as the afternoon progressed and with the New York market moving back to par and starting to add some positive value. The London market continued to end the day on a positive note and with 70% of the earlier gains of the day intact, while the New York market likewise ended the day on a positive note, but with only 25% of the earlier gains of the day intact. The steady nature of the close is however somewhat positive and might inspire some degree of industry buying support and one might guess that the markets might be due for a steady to modestly buoyancy stance for early trade today, against the prices set yesterday, as follows:

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

JUL 1845 + 3                               JUL   123.15 + 0.25
SEP 1725 + 14                             SEP   124.95 + 0.25
NOV 1739 + 16                           DEC  128.40 + 0.05
JAN 1757 + 16                            MAR 132.00 + 0.05
MAR 1778 + 15                          MAY 134.25 + 0.10
MAY 1800 + 14                           JUL  136.30 + 0.10
JUL 1818 + 12                             SEP  138.35 + 0.15
SEP 1836 + 11                            DEC  141.40 + 0.25
NOV 1855 + 11                          MAR 144.20 + 0.30
JAN 1878 + 11                           MAY 145.80 + 0.30