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