The National Coffee Association of Guatemala have reported that the countries coffee exports for the month of June were 78,868 bags or 19.64% lower than the same month last year, at a total of 322,761 bags. This figure contributes to the countries cumulative coffee exports for the first eight months of the present October 2015 to September 2016 coffee year to being 6,446 bags or 0.29% lower than the same period in the previous coffee year, at a total of 2,180,255 bags.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 126,424 bags or 2.08% during the month of June, to register these stocks at 6,210,612 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 560,000 bags per week, would conservatively have been at least 1.1 million bags.

Therefore if one is to consider the additional unreported stocks and look to end April stocks in North America of approximately 7.3 million bags, it would have equated to something in the order of 13 weeks of roasting activity. This number remains a safe reserve, in terms of the steady flow of new crop coffees from Colombia, Central America and Vietnam that are already coming to the market and soon to be followed, by the new crop coffees from Brazil. Albeit that there is some degree of hiccup in terms of Colombian supply due to the prevailing truckers strike with the country, which shall no doubt be solved and with catch up shipments due to come to the consumer markets.

What is perhaps remarkable in terms of these U.S.A. stocks is that it is despite the significant decline of the certified stocks of the New York arabica coffee market that are held within the U.S.A. based warehouses of this exchange, which now are only 366,186 bags and account for only a modest 28.15% of the total New York certified stocks. Furthermore that these stocks which are at a thirteen year high, are also registered at such a high level despite the steadily improving logistical efficiencies within the world that would normally with the related speedy transit times from the producer to consumer markets and the majority of industries looking to keep inventories slim, which one would have thought would had seen stocks lower rather than higher. But perhaps the prevailing low interest rates are a factor which allow for the easy finance of coffee stocks, has some influence upon these significant coffee stocks that are presently being held within the U.S.A.

The September to September contracts arbitrage between the London and New York markets narrowed on Friday, to register this at 65.04 usc/Lb., while this equates to a 44.08% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, continues to inspire support for the robusta coffee sector of the industry.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,543 bags on Friday; to register these stocks at 1,300,670 bags. There was meanwhile a smaller in volume 3,860 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 8,203 bags.

The commodity markets had a mixed day on Friday, but with the U.S. dollar showing some improved muscle for the day, many markets came under some degree of negative pressure and with the overall macro commodity index tending softer for the day. The Oil, Natural Gas, Cotton and Soybean markets had a day of buoyancy, while the Sugar, Cocoa, Coffee, Copper, Orange Juice, Wheat, Corn, Gold and Silver had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.02% lower; to see this Index registered at 431,46. The day starts with the U.S. dollar steady and trading at 1.324 to Sterling and 1.107 to the Euro, while North Sea Oil is steady in early trade and trading at 46.30 per barrel.

The London market and New York markets started the day on Friday with follow through buoyancy and with both markets taking a steady positive track into the early afternoon trade, but with the New York market starting to come under pressure and head back to par as the afternoon progressed and followed shortly after, but similar pressure coming into play for the less volatile London market. The dip back into negative territory assisted to dampen speculative spirits for what many had seen to be an overbought New York market and with sell stops being triggered to accelerate the losses, the New York market took a sharp downside track and with this being mirrored to a lesser extent within the London market. The London market continued to end the day on a negative note and with 74.2% of the earlier losses of the day intact, while the New York market ended the day on a very negative note and with 89.3% of the earlier losses of the day intact. This turn in the fortunes for the coffee markets that had seen the New York market hitting one and half year highs earlier in the day and along with the steady nature of the U.S. dollar while there is little in the way of supportive fundamental news, is unlikely to inspire confidence and thus, one might expect to see 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 1810 – 26                                       JUL 145.70 – 4.60
SEP 1819 – 23                                       SEP 147.55 – 4.60
NOV 1841 – 19                                     DEC 150.50 – 4.60
JAN 1857 – 15                                     MAR 153.15 – 4.60
MAR 1867 – 14                                   MAY 154.55 – 4.70
MAY 1879 – 14                                     JUL 155.70 – 4.70
JUL 1891 – 14                                       SEP 156.75 – 4.75
SEP 1904 – 14                                      DEC 158.30 – 4.85
NOV 1923 – 14                                    MAR 159.80 – 4.90
JAN 1919 – 14                                     MAY 160.60 – 4.90