Coffee Market Report
| With the export registrations for the month so far in hand the authorities in Vietnam have forecasted that the country shall export approximately 1.67 million bags for the month of November, which is very much in line with private trade forecasts for exports of mostly robusta coffees of between 1.5 million and 1.83 million bags. These exports volumes are relatively modest, if one is to consider the significantly high stock levels of past crop robusta coffee stocks, but sales continue to be retarded by the prevailing internal market price resistance, which does not allow for export prices to be attractive to the consumer market trade to carry stocks.
The Vietnam export forecasts aside there was nothing in the way of striking coffee news coming to the markets yesterday, with the indications that for the short term at least that the markets shall be unlikely to be in receipt of any significant supportive fear stories. But world weather is very unpredictable and with the El Nino phenomenon in play within the Pacific Ocean and due to carry on for the first quarter of the coming year, one cannot be sure what the coming months might bring to the presently soft coffee markets. The March on March contracts arbitrage between the markets broadened yesterday, to register this at 55.29 usc/Lb., while this equates to a 44.04% 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 in more volume upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange with the market closed for the U.S.A. Thanksgiving holiday remained unchanged yesterday, following the Wednesday report when these stocks were registered at 1,841,330 bags. On the same day the number of number of bags pending grading for this exchange were registered at 7,855 bags. With many of the commodity markets closed yesterday for the Thanksgiving holiday in the U.S.A. there is little direction for the commodity markets in general, with today likely to see many players in the U.S.A. taking a long weekend, one might expect a follow through quiet days trade. There were of course some markets in play and the Sugar, Copper, Gold, Silver and Platinum markets had a day of buoyancy and the Cocoa market was steady, while the Oil, Natural Gas and London robusta Coffee markets had a softer day’s trade. But without the full range in play, the Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets remains with the pre-holiday level of 384.50. The day starts with the U.S. Dollar steady in early trade and trading at 1.508 to Sterling and 1.061 to the Euro, while North Sea Oil is steady in early trade and is selling at 43.75 per barrel. The London market started the day yesterday on a modestly softer note, with this market trading solo and against thin volumes of trade, taking a softer track into the afternoon trade. This remained the track for the rest of the day’s trade and with the London market continuing to end the day on a soft note and with 77.8% of the earlier losses of the day intact. This close provides little in the way of direction and one might expect that there shall be a degree of hesitancy and little better than a cautiously steady start for early trade today against the prices set in London yesterday and the New York market on Wednesday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. NOV 1485 – 14 DEC 122.90 + 0.45 |
