Coffee Market Report
| There has been a degree of interest in the latest weather forecasts that indicate a possibility that overnight temperatures in the southern half of Parana may fall to levels that could bring about frost conditions toward Thursday and Friday this week. This area is mostly related Brazils winter corn crops and should there be such an occurrence is unlikely to affect any coffee growing areas, although it may serve to pique the interest of the more volatile speculative sector of the coffee markets.
Meanwhile the isolated rain that was reported earlier to be around the main South Eastern Brazil coffee growing areas has mostly abated and indications are positive that the crop that has started harvest, can be expected to pick up pace by the end of June. Cooxupe have subsequently reported that its member famers had harvested 9.90% of the larger new arabica coffee crop by 3rd June, which is in keeping with average harvest rate and for comparative purposes against 4.5% of the 2015 crop by this time and 19.50% of the 2014 harvest by the same time in the previous smaller crop year. The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register at 56.49 usc/Lb., while this equates to a 42.11% 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 3,300 bags yesterday; to register these stocks at 1,307,808 bags. There was a decrease in the number of bags pending grading for this exchange, of 4,400 bags; to register these pending grading stocks at 17,623 bags on the day. It was a steady to overall positive day for the commodity markets yesterday, the firmer Oil markets lead sentiment supported by speculation of a potential decline in total U.S. crude stocks and boosted by a weaker U.S. Dollar on the day. It was a positive day for Oil, Sugar, Cocoa, Coffee, Cotton, Orange Juice, Corn, Wheat and Platinum markets, a steady day for Soybean and a softer day for Copper, Gold, Silver and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% higher at 428.33. The day starts with the U.S. Dollar trading at 1.4542 to Sterling and 1.1373 to the Euro, while North Sea Oil is firm in early trade and is selling at US$ 50.14 per barrel. The coffee markets started the day on a positive track in London but with the softer opening in New York, both markets slipped into negative territory. The morning session found underlying buyer support in both markets however, to see both New York and London recover from the lows into positive territory and continue to build upon the gains toward midsession. Once the markets moved back into positive territory activity on both sides of the market steadied and the markets continued trading within a narrow range for much of the latter session. In somewhat of a reversal of fortunes however New York succumbed to a degree of selling pressure at the highs of the day and this market slipped back into negative territory briefly. With the assistance of a firming Brazil Real against the U.S. Dollar and producers withdrawn, this market regained some of the ground lost toward the end of the session, to register a close with 2.01% of the gains recovered from the low of the day and a close in mildly positive territory. The London market that had similarly steadied within a narrow range into the afternoon and this market held onto the gains with a withdrawal of producer seller participation and this latter market finished near to the day highs achieved. Thus it was a positive finish for both markets after another heavy volume trading day to set the close yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1689 + 24 JUL 132.20 + 0.50 |
