Coffee Market Report
| The Ivory Coast have reported that the countries coffee exports which are related to robusta coffees for the first five months of this year and up to the end of May were 56% higher than the same period in the previous year, at a total of 487,017 bags. This does however remains something of a modest volume for the year so far, as with a crop of approximately 1.8 million bags and a corresponding export volume of 1.6 million bags, one would think that there is much more to come from this leading West African producer over the follow on seven months.
Brazil’s largest and likewise the World’s largest coffee cooperative Cooxupe have reported that their members and neighbours within one of the main arabica coffee growing regions of Brazil have by this week, already harvested 25.7% of their new crop. This performance so far is mid-way between the 15.5% factor that they reported to have been the case at the same time last year and the 35.5% factor that they have reported had been harvested by the same time in 2014. Thus despite the harvest interruptions that came with the recent spells of rain showers, it would seem that the new there has been no serious impact upon the progress of the harvest of the new Brazil arabica coffee harvest, while in the meantime the new Brazil conilon robusta coffee crop has peaked and is getting closer to completion. However the concerns remain as to the negative effects of the recent rains, which had knocked of significant volumes of ripe cherries which while still collected and have had no impact upon the volume of the new arabica coffee crop, has seen many of these cherries suffer in terms of the quality of the coffee beans within them. This issue of the lower percentage of quality coffee out of the new Brazil crop continues to underpin sentiment within the speculative sector of the New York market, but without any quantifying data to bring clarity to these fears. But it is meanwhile in terms of the internal market in Brazil a factor that is encouraging for farmers to show some degree of price resistance for their good quality cupping new crop coffees, which will put some pressure upon the countries exporters in terms of covering their short sold forward contracts and is tending to broaden the asking differentials from the exporters for new fine cupping Brazil coffee sales, relative to the good cup offers. Most of the main northern hemisphere industry buyers and therefore the bulk of the quality coffee buyers are however holding good forward cover for the summer season and therefore with short term demand thin, the internal market issues within Brazil are more a problem for the countries exporters than for the consumer markets. Thus one might speculate that this quality problem and with much of the new crop still to harvested and while Brazil’s large and price sensitive domestic market shall most probably easily absorb most of the problem cupping new crop coffees, that the fears over quality might become only a short term issue. The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 63.44 usc/Lb., while this equates to a 45.12% 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 decrease by 1,675 yesterday; to register these stocks at 1,310,813 bags. There was meanwhile a larger in number 2,265 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,931 bags. The commodity markets had a day of overall buoyancy yesterday and with the overall macro commodity index taking an upside track through the day, which assisted to inspire confidence within the markets. The Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean and Silver markets had a day of buoyancy, while the Gold market had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.45% higher; to see this Index registered at 428.44. The day starts with the British pound and the Euro remaining under some pressure against a steady U.S. Dollar which is trading at 1.330 to Sterling and 1.106 to the Euro, while North Sea Oil is near to steady in early trade and trading at 47.25 per barrel. The London and New York markets had a slow start to the day yesterday, but with both markets following a steady start showing increased buoyancy and entering the afternoon trade with reasonable gains, which were further extended as the afternoon started to attract some mover volume of trade. This positive start for the day and with the added influences of the positive nature of the overall macro commodity index assisted to inspire confidence within the markets, which are being further assisted by the lacklustre nature of producer price fixation selling for the present, to see the markets holding onto most of their gains and setting a relatively strong close for the day. The London market ended the day on a positive note and with 77.1% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 82.7% of the earlier gains of the day intact. This close which has seen the markets post a good recovery from the losses incurred late last week and into early this week has to be seen to be somewhat supportive for the charts and for the market players, which is likely to inspire as steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1672 + 33 JUL 138.90 + 4.40 |
