The coffee markets remain devoid of striking fundamental news, but with producers tending to show some degree of price resistance and particularly within Vietnam were slow selling activity prevails, it assisted to buoy the fortunes of the London market yesterday. The renewed stability of the London market and the somewhat oversold situation within the New York market, seemingly coming to the fore with some short covering buying activity for this latter market.

The traditionally clear nights full moon frost threatening period is once again in play and with the full moon due tomorrow but is not accompanied by any sign of a sever cold front for south east Brazil and therefore, the frost threat is not a factor at present. Rather focus remains upon the weak nature of the Brazil Real relative to the U.S. dollar, which assists the countries farmers to remain profitable with their early new crop coffee sales. A factor that continues to fuel bearish sentiment, within the coffee terminal markets.

While it is still quite some time until the start of the Elections in Brazil that kick off with the first round on the 7th. October and head towards a conclusion by the end of the month, to set some degree of clarity on the potential direction for the Brazil currency. By which time anyhow, the markets shall be looking to the early summer rainfall reports, which shall give some indication as to the prospects for the flowerings for the next 2019 Brazil crop.

But in the meantime, and with the weather conditions favourable for good coffee production levels for Colombia and another bumper year end new crop for Vietnam, there remains little in the way of supportive news for the coffee markets. A factor that presently indicates a soft and flat coffee market for at least the medium term and with the industry buyers lacklustre in their buying activity, to bring little excitement to the coffee markets for the present.

The September 2018 to September 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 41.22 usc/Lb., while this equates to 35.02% price discount for the London Robusta coffee market.

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 2,057,400 bags. There were meanwhile a smaller in number 2,333 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 23,253 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 60,667 bags or 5.29% over the week of trade leading up to Monday 25th. June, to see these stocks registered at 1,086,833 bags, on the day.

The commodity markets had a mixed day yesterday, but with many markets struggling to remain close to par and to see the overall macro commodity index taking a steady track for the day. The Oil, Natural Gas, Sugar, Coffee, Cotton, Wheat, Corn and Soybean markets ended the day with some degree of buoyancy, while the Cocoa, Copper, Orange Juice, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.17% higher; to see this index registered at 419.74. The day starts with the U.S. Dollar showing some degree of muscle and trading at 1.322 to Sterling, at 1.165 to the Euro and with the dollar buying 3.797 Brazilian Real, while North Sea Oil is showing some buoyancy in early trade and is selling at US$ 75.20 per barrel.

The London market started the day yesterday trading marginally south of par, while the New York market started the day trading with modest buoyancy and soon joined by the London market which moved up into positive territory and to both markets taking a positive track, into the early afternoon trade. As the afternoon progressed, both markets attracted support and moved higher into more positive territory, but with selling pressure coming to the fore for late trade and to limit the gains for the day.

The London market ended the day on a positive note and with 45.5% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note but with only 21.7% of the earlier gains of the day intact. This positive close might assist to inspire some degree of confidence, but with the markets having faltered somewhat in late trade, it might be muted and one might not expect to see much better than a steady start due for early trade today, against the prices set yesterday, as follows:

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

JUL 1696 + 18                                                  JUL 114.80 + 0.65
SEP 1686 + 10                                                 SEP 117.70 + 0.50
NOV 1684 + 9                                                 DEC 121.10 + 0.50
JAN 1690 + 9                                                  MAR 124.60 + 0.45
MAR 1703 + 9                                                MAY 126.95 + 0.45
MAY 1716 + 10                                               JUL 129.20 + 0.45
JUL 1728 + 10                                                 SEP 131.25 + 0.45
SEP 1743 + 12                                                 DEC 134.20 + 0.40
NOV 1757 + 12                                               MAR 137.20 + 0.45
JAN 1768 + 18                                                MAY 138.95 + 0.45