Meanwhile with the new crop harvest now just about complete the farmers are showing price resistance towards the short sold exporters and taking a scale up selling stance, which is causing inflation in the asking differentials for new business from the exporters. This is particularly severe in terms of the bolder bean arabica coffees as with the overall bolder bean screen 17/18 percentages significantly lower and most likely related to the interruption in cherry development with the dry weather over the first two months of this year, there is a relatively tight supply for these popular within the consumer markets bold bean coffees.

There is a potential hiccup in terms of Brazil agricultural exports that comes with the strike on the part of the Brazilian Federal Agricultural Agents, who cite the negative effects of the country’s 9.53% inflation rate as reason to demand higher wages. There is no clarity so far as to how many of the agents are striking, but without the ability to obtain the certificates to allow exports of agricultural products, it would stall the exports until the strike is over and with exporters sitting upon forward sold export commitments of coffee it could cause some problems within the consumer markets for the short term.

The main consumer markets are however sitting with relatively good coffee stocks and albeit that these might not necessarily include the volumes of short term required Brazil coffees, the industries are these days far more flexible and one might think that some short term disruption to Brazil coffee exports shall not cause too many problems for consumer roasters. But this strike shall have to be watched as if it becomes extended in time; it could become a problem for the consumer industry and inflate asking differentials for consumer market Brazil coffee stocks and suitable alternative coffees from the other origins.

Despite the pending pressure of the new and larger robusta coffee crop that is due to start being harvested in four to five weeks’ time in Vietnam, the internal market price resistance on the part of the farmers and mostly the internal traders who hold much of these substantial stocks continues. This related to the soft prices that are dictated by the reference prices of the London market, which is causing exporter asking differentials to remain relatively firm for the present. This is likewise forcing higher the asking differentials from alternative robusta coffee origins, as the internal markets in these countries react to the increasing demand from the exporters. The big question now being with the pending new crop on a nearby horizon as to when the internal market traders in Vietnam shall find reason with the need to finance new crop stocks and look to liquidate some of the past crop stocks, no matter the price. One would think that this might be unlikely until at least the second half of November, by when the new crop harvest shall start to peak.

The arbitrage between the markets broadened yesterday to register this at 47.61 usc/Lb., while this equates to a 40.16% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive 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 1,650 bags yesterday; to register these stocks at 2,037,287 bags. There was meanwhile a larger in volume 2,205 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,814 bags.

The commodity markets were somewhat lacklustre in trade yesterday, with many players more focused upon the decision over interest rates that shall be taken by the Federal Reserve Bank of the U.S.A. This turned out to be business as usual, but with the perspective that despite not hike in interest rates this month, that it remains a likely decision to be taken by the U.S.A. by the end of the year. The decision does however marginally weaken the U.S. dollar and does bring with it some small degree of support within the commodity markets, for trade today. The Cocoa, New York arabica Coffee, Copper and Silver markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, London robusta Coffee, Cotton, Orange Juice, 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 0.22% lower to see this Index registered at 396.01. The day starts with the U.S. Dollar tending softer and trading at 1.559 to Sterling and 1.141 to the Euro, while North Sea Oil is steady in early trade and is selling at 48.25 per barrel.

The London market started the day yesterday tending softer, while the New York market showed some hesitant early buoyancy but with both markets coming under pressure and the New York market dipping back into negative territory in early afternoon trade. The New York market did however buck the negative influences of the softer overall macro commodity index and recover back into positive territory, while the London market continued on a soft sideways track and the New York market faltering late in the day to come off its highs. The London market continued to end the day on a soft note and with 63% of the losses of the day intact, while the New York market ended the day on a modestly positive note and with 42.9% of the gains of the day intact. This close and especially with the New York market coming off its highs late in the day does little to inspire, but one might think that with the U.S. dollar softer this morning that it might contribute to some degree of modest buoyancy for early trade today against the prices set yesterday, as follows:

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

SEP 1564 – 15                                   SEP     113.50 – 0.30
NOV 1564 – 17                                 DEC    118.55 + 0.45
JAN 1578 – 16                                  MAR   121.95 + 0.45
MAR 1593 – 17                                MAY   124.20 + 0.45
MAY 1614 – 17                                  JUL   126.10 + 0.40
JUL 1634 – 17                                    SEP   127.95 + 0.25
SEP 1653 – 18                                   DEC   130.75 + 0.30
NOV 1673 – 18                                 MAR   133.45 + 0.35
JAN 1693 – 18                                  MAY   135.25 + 0.35
MAR 1715 – 18                                  JUL    137.00 + 0.30