Coffee Market Report
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Coffee Market Report January 27 2015 The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market decrease their net long position within this market by 2.36% in the week of trade leading up to Tuesday 20th. January, to see this long position turned into a net long that was registered at 13,977 Lots, on the day. This speculative net long position within the London market which is the equivalent of a relatively modest 2,329,500 bags has most likely been little changed during the period of mixed but overall steady trade that has since followed. What is assisting the London robusta coffee market to hold its value is the value while the more volatile New York has been taking a softer stance against speculative negative pressure that has come with the Brazil rains, has been the price resistance being shown within the internal market in Vietnam for their new crop robusta coffees, which has limited to a degree the volumes of price fixation selling coming into play over the London market. The question is however how long this resistance might continue, but while there is some competition coming to Vietnam from the new Indian robusta coffee and the new West African robusta crops the further competition from Uganda and Indonesia is only likely to start picking up in volume during the second quarter of this year, which might assist to see the London market remain relatively stable. Albeit that if the New York market were to lose some more weight in the coming weeks against further rain reports from Brazil, the London market would most certainly shed some more modest weight in sympathy. The week long Tet New Year Holiday (Tết Nguyên Ðán) in Vietnam shall start on Sunday 15th. February and trigger the New Year of the Goat from Thursday 19th. February, but while traditionally the advent of this holiday has seen farmers become aggressive sellers of new crop coffees to finance their celebrations, this has not been the case for this year. Farmers and internal traders fully aware of the short sold export commitments on the part of the mills and exporters are rather playing their stocks and holding back for higher relative value against the price dictates of the London market, which is likewise providing positive buoyancy for asking differentials from the exporters and tending to slow new business activity for the new crop robusta coffees. These actions assisting to a degree, to be supportive for the London market at present, but there remains a chance that some of the less well financed farmers might look to become more aggressive sellers ahead of this all important family holiday period. The latest forecasts from within Brazil and from some of the international meteorological centers and now talking of the present rains that are falling over the main arabica coffee districts in Brazil, to continue through to the end of the first week in February. These are not however constant rains, but are nevertheless related to regular scattered showers and are expected to provide reasonable all over coverage for these coffee districts. While the U.S.A. based Commodities Weather Group is also hinting at the rains most likely to continue through to the middle of next month. These reports do most certainly confirm that the weather conditions in Brazil are not anything like the eight to nine weeks of mostly dry weather that was experienced for the first two months of last year, as in reality this year’s dry spell for these arabica coffee districts has been a relative modest three to perhaps four weeks for some districts and a spell that has mostly been bridged, by the ground water retention reserves that had been built up with the rains over the preceding two months. Thus for the present, the Brazil weather and despite a number of reports that it is meaningless as the damage has already been done, has taken the wind out of the sails of the speculative bulls within the New York market. The arbitrage between the markets has narrowed yesterday to register this at 73.31 usc/Lb., while this equates to a relatively attractive 45.29% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,750 bags yesterday, to register these stocks at 2,286,232 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,093 bags. The commodity markets were mixed yesterday but with many leading players located in the North East of the U.S.A. somewhat distracted by the oncoming weather issues, as a severe snow storm is now impacting upon the area and keeping many away from the desk. The Oil, Sugar, London robusta Coffee, Cotton, Copper and Soybean markets had a day of buoyancy, while the Natural Gas, Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn, Gold, Silver and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% lower; to see this Index registered at 433.92. The day starts with the U.S. Dollar steady and trading at 1.509 to Sterling and 1.23 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 45.85 per barrel. The London market started the day yesterday on a steady to positive note, while the New York market started the day taking a thinly traded negative track. The New York market did however as the markets entered the afternoon’s trade recover to join the London market in positive territory, but with trade remaining generally thin and lacklustre and seemingly lacking much in the way of industry participation. The New York market did however come under some pressure as the afternoon progressed and head back to par, while the London market retained a degree of buoyancy. The London market continued on its modest upside track for the rest of the day and ended the day on a positive note and with 84% of the gains of the day intact, while the New York market stuttered towards a marginally softer close but having recovered 64.7% of the earlier losses of the day by the close. This mixed might well bring in some light producer selling and a softer start for the relatively firm London market but a cautiously slow sideways start for the New York market for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1924 + 21 MAR 1952 + 21 MAR 161.85 – 0.60 MAY 1981 + 21 MAY 164.55 – 0.60 JUL 2006 + 22 JUL 167.15 – 0.60 SEP 2027 + 22 SEP 169.55 – 0.55 NOV 2040 + 25 DEC 172.75 – 0.55 JAN 2050 + 26 MAR 175.05 – 0.40 MAR 2067 + 25 MAY 175.85 – 0.30 MAY 2086 + 23 JUL 175.95 – 0.35 JUL 2108 + 22 SEP 175.95 – 0.35
Coffee Market Report January 26 2015 The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market decrease their net long position within this market by 10.52% in the week of trade leading up to Tuesday 20th. January; to register a net long position of 24,718 Lots on the day. Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 8.21%, to register a net long on the day of 25,718 Lots. This decrease on the part of the Index funds long positions, having been related to the tail end of the New Year fund rebalancing activity, which is correcting the relatively inflated value share that the commodity was holding within the overall funds positions. During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 16.26%, to register a net long of 20,196 lots on the day. This net long position that is the equivalent of 5,725,476 bags has most likely been marginally decreased over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds. The pre-weekend weather reports from Brazil confirmed rains coming into the main arabica coffee districts within south eastern Brazil and with forecasts for the rains to continue during this week, while there are indications coming from some forecasts for rains to continue into early February. These rains coming one would think just in time, to confirm that the arabica coffee weather for early this year shall not mirror the damaging partial drought that was experienced over the first two weeks of last year. This does not however dampen the pessimistic spirits of the National Coffee Council of Brazil who came forth with their forecast that due to the past three weeks of dry weather and the resulting dry soils, that it shall have done irreversible damage to the prospects for the forthcoming new crop that is presently developing upon the trees. With the comment that this damage makes the official government forecasts for a new crop of between 44.1 and 46.6 million bags far too optimistic and indicating that the National Coffee Council’s doing a new survey, which they do not expect to forecast the new crop at above 40 million bags. This rather market supportive report from the National Coffee Council of Brazil provided some support for the waning spirits of the speculative bulls within the New York arabica coffee market on Friday, but one would think that it shall be very much questioned in the coming days and might not have sufficient muscle to do much more than bring some caution to the spirits of the speculative bears who have recently been taking the market on its recent softer path. Especially so as while it has indeed been mostly dry and hot over most of the main arabica coffee districts for the first three weeks of the year, there would have been reasonable ground water retention levels inherited from the fair rains that were experienced over November and December. Meanwhile with the Brazil Real having regained some muscle relative to the strong U.S. dollar over the past week, while the reference prices of the New York arabica coffee market has been on a decline, it has resulted in a degree of internal market resistance for new sales. This having the effect of firming up the asking differentials for new business, but not to a degree that would indicate that farmers foresee a severely tightening longer term Brazil arabica coffees supply. Which is a factor that would make one presume that the farmers whom one would be the best to assess the prospects for the forthcoming new crop, do not believe in the radically lower figures being forwarded by the Brazil’s National Coffee Council. The arbitrage between the markets has broadened on Friday to register this at 74.86 usc/Lb., while this equates to a relatively attractive 46.08% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,835 bags on Friday, to register these stocks at 2,288,982 bags. There was meanwhile a smaller in volume 640 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 6,093 bags. The commodity markets were mixed on Friday, but with the overall macro commodity index tending easier for the day. The Brent Oil, Natural Gas, New York arabica Coffee, Orange Juice and Corn markets had a day of buoyancy, while the U.S. Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Copper, Wheat, Soybean, Gold, Silver and Platinum markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.71% lower; to see this Index registered at 435.13. The day starts with the U.S. Dollar tending firmer and trading at 1.501 to Sterling and 1.119 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 45.85 per barrel. The London market started the day on Friday on a steady note and with the New York market showing some early buoyancy, in cautiously thin and lacklustre trade. The remained the track into the afternoon’s trade but while the New York market retained it buoyancy while the afternoon progressed the London market started to lose its way and moved back into negative territory. The London market continued on its sideways negative track to end the day on a softer note and with 66.7% of the earlier losses of the day intact, while the New York market added to its modest buoyancy in late in the day’s trade to end the day on a positive note and with 86.2% of the earlier gains of the day intact. This mixed close and with little in the way of fundamental news other than rain reports from Brazil coming forth to fuel market sentiment is likely to inspire yet another slow and hesitant near to steady start for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1903 – 10 MAR 1931 – 10 MAR 162.45 + 2.50 MAY 1960 – 8 MAY 165.15 + 2.50 JUL 1984 – 9 JUL 167.75 + 2.55 SEP 2005 – 8 SEP 170.10 + 2.60 NOV 2015 – 6 DEC 173.30 + 2.70 JAN 2024 – 5 MAR 175.45 + 2.70 MAR 2042 – 4 MAY 176.15 + 2.65 MAY 2063 – 2 JUL 176.30 + 2.65 JUL 2086 + 3 SEP 176.30 + 2.60
Coffee Market Report January 23 2015 The Coffee Development Authority of Uganda have reported that the countries coffee exports for the month of December were 32,583 bags or 12.66% lower than the same month in the previous year, at a total of 224,803 bags. This figure which follows a relatively lower export performance in November and a marginally better export performance in October last year has contributed to the cumulative exports from Uganda for the first three months of the present October 2014 to September 2013 coffee year having been 57,482 bags or 7.86% lower than the same period in the previous coffee year, at a total of 674,189 bags. However in terms of value for these Ugandan coffee exports during the month of December which were made up from an 78.61% to 21.39% mix of robusta and arabica coffees, the value of the exports for the month were US$ 4,560,437 or 18.09% higher than the same month in the previous coffee year, at a total of US$ 29,778,184. This improved value and despite the lower volumes of exports has contributed to the cumulative value of coffee exports for Uganda for the first three months of this present coffee year having been US$ 15,335,394 or 20.56% higher than the same period in the previous coffee year, at a total of US$ 89,941,011. This improved income from coffee exports that within the free market nature of coffee farming and marketing environment within Uganda sees the majority of the value of sales ending up in farm hands, continues to encourage improved coffee production within the country and is very evident, by the areas of replanted coffee farms and new coffee trees being planted out within farms that had previously not planted coffee or had long since abandoned their coffee. Thus while for this coffee year the countries coffee production is expected to match the previous coffee year’s production and bring forth approximately 3.6 million bags, the prospects are for improved levels of production for the coming years. With the country very likely to see production start to return to the production levels of in excess of 4 million bags per annum that were experienced eighteen years ago. The National Cocoa and Coffee Board of the Cameroon have reported that the countries robusta coffee exports for the month of December were 7,700 bags or 195.78% higher than the same month in the previous coffee year, at a total of 11,633 bags. While they reported no arabica coffee exports for the month, from their much smaller arabica coffee share of total production. Illustrated that while the Cameroon works on a December to November for robusta coffees it works on a more universal October to September coffee year for their arabica coffees and so far for this present October 2014 to September 2015 coffee year, the arabica coffee exports are so far only registered at 4,150 bags. What is a concern for the coffee authorities in the Cameroon though, is the fact that this country which used to produce coffee crops of in excess of 2 million bags per annum 28 years ago, is that their production for the previous coffee year and made up from a 90 to 10 mix of robusta and arabica coffees was only a modest 364,650 bags, which illustrates the demise of this once significant player within the West African coffee producing bloc that has seen coffee production decrease by 73% over the last 28 years, while in the meantime over these 28 years the world production has registered an approximate 84% increase. It is however not a situation unique to Cameroon but is a West African problem as the producer blocs leading player the Ivory Coast who are forecasted to produce a 1.9 million bags robusta coffee crop for the present coffee year, are presently producing annual coffee crops that are 55% lower than the coffee crops that they used to bring in 28 years ago. The arbitrage between the markets has narrowed yesterday to register this at 71.91 usc/Lb., while this equates to a relatively attractive 44.96% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,252 bags yesterday, to register these stocks at 2,291,817 bags. There was meanwhile a larger in volume 2,060 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,453 bags. The commodity markets were mixed again yesterday, but with the overall macro commodity index tending easier for the day. The Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Wheat, Corn and Soybean markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.70% lower; to see this Index registered at 438.26. The day starts with the U.S. Dollar tending firmer and trading at 1.499 to Sterling and 1.133 to the Euro, while North Sea Oil is steady in early trade and is selling at $ 47.10 per barrel. The London market started the day yesterday on a relatively quiet and steady to softer note and followed by a steady to buoyant start for the New York market, but with both markets experiencing lacklustre trade and thin trade, while they maintained a similar through the into the early afternoon. The more positive New York market came under some pressure to dip back into negative territory for short period and quite quickly recovered, while the London market maintained is steady to soft sideways track. The New York market however came under late in the day speculative selling that was presumably encouraged by the combination of the negative nature of the macro commodity index, the Brazil rains and the stronger U.S. dollar, to see the market move back into negative territory and mirrored to a lesser degree, by the London market. The London market continued to register a marginally softer close and with 40% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 83.9% of the losses of the day intact. This soft close for the volatile New York market that is threatening to dip towards the next bout of speculative sell stops is likely to contribute towards cautious hesitancy but there might be some opportunist industry price fixation activity within early trade, to contribute towards a steady start for4 the day against the soft prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1913 – 4 MAR 1941 – 6 MAR 159.95 – 1.30 MAY 1968 – 8 MAY 162.65 – 1.30 JUL 1993 – 7 JUL 165.20 – 1.25 SEP 2013 – 7 SEP 167.50 – 1.15 NOV 2021 – 7 DEC 170.60 – 1.15 JAN 2029 – 7 MAR 172.75 – 1.25 MAR 2046 – 6 MAY 173.50 – 1.25 MAY 2065 – 4 JUL 173.65 – 1.20 JUL 2083 – 2 SEP 173.70 – 1.55
Coffee Market Report January 22 2015 The cold front is moving north within south east Brazil and is heading into the main arabica coffee districts of the country, which is due to bring relief to the farmers who have seen their ground water retention levels declining over the past three weeks of hot and dry weather. But more important as most likely there was enough moisture inherited from the preceding fair rains over November and December, to support the steady development of the maturing coffee cherries towards the coming new crop. Meanwhile the rains are dampening speculative spirits for the present, within the New York arabica coffee market. But perhaps more important for the consumer market industries in terms of the advent of the rains and the probability that there might be no further damage due for the forthcoming new crop, is that it shall inspire those farmers who have been holding back some reserve stocks to value add should there be damage and the resulting higher prices, to once again become more aggressive sellers. Therefore to reduce the price resistance and price supportive activities within the internal market, which would by nature bring more and price competitive Brazil arabica coffees to the consumer markets. While the resulting price fixation selling activity into the New York market, is likely to put some modest pressure upon the market. Agronomists from the National Coffee Federation in Colombia have cautioned that the probability of a mild El Nino developing within the Pacific Ocean and the resulting drier weather in the coming months for the countries coffee districts, shall make it important for farmers to start taking aggressive steps to control the threat of Broca or Berry borer beetle. While in terms of Roya or Leaf Rust that develops during wet conditions, the prospects of drier weather are a positive factor and shall further limit its potential. In this respect one must take note that over the past couple of years of improved controls, that Colombia boasts of the fact that Roya infestations within the Colombian coffee farms has been reduced by 85%, which is a success story that provides guidance for their neighbours in Central America. The report does meanwhile stress that with the guidance of good agronomy support programs for the Colombian coffee farmers that these issues of insect and fungus controls are well in hand, while historically the periods of modestly drier weather have been related to better flowerings and larger crops. Thus with the past few years of relatively aggressive farm replanting programs that has seen the average age of coffee trees within Colombian coffee farms reduced by 42% to an average of 7.2 years old and therefore much better yielding trees, one can feel some degree of confidence that unforeseen weather issues aside, that the annual crops shall continue to steadily increase over the next two to three years. The new Central American crops that had experienced some cold and wet weather delays in cherry development and maturity late last year are now in full swing and with good volumes of new crop coffees being processed, but with still evidence of price resistance being experienced within the internal markets. But one might question how long this can continue, as while farmers can take advantage of exporters having to pay up to cover their short sold nearby export commitments, there must certainly be a point were nearby supply shall exceed short term demand and one might expect this to start impacting upon the presently relatively firm export differentials from this important fine washed arabica coffee producer bloc. The arbitrage between the markets has narrowed yesterday to register this at 72.94 usc/Lb., while this equates to a relatively attractive 45.23% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 207 bags yesterday, to register these stocks at 2,293,069 bags. There was meanwhile a larger in volume 2,880 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 7,513 bags. The commodity markets were mixed again yesterday, but with the dominant Oil markets that are heavily weighted within the mix showing some degree of buoyancy. While the continued muscle being shown by the U.S. dollar continues to have an impact within many markets and with the European Central Bank expected to announce a more aggressive and Euro weakening quantitative easing package, the dollar can be expected to maintain its negative pressure within many fundamentally well supplied markets. The Oil, Natural Gas, Sugar, Copper, Wheat and Platinum markets showed buoyancy and the London robusta Coffee, Orange Juice and Gold markets were near to steady, while the Cocoa, New York arabica Coffee, Cotton, Corn and Soybean markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.48% higher; to see this Index registered at 441.34. The day starts with the U.S. Dollar relatively steady and trading at 1.513 to Sterling and 1.159 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 46.60 per barrel. The London market started the day yesterday on a relatively quiet and steady note and followed by a steady to buoyant start for the New York market, but with both markets experiencing lacklustre trade and thin trade, while they maintained a positive stance through the early afternoon and with the New York market adding some additional value and posting 2.55 usc/Lb. gains for the day. This positive stance was however unsustainable and the pathfinder New York market started to lose its way and with industry and speculative support thin, was pressured back into negative territory. The relatively thinly traded London market followed this negative track but was able to attract support and limit its losses, while the New York market continued on its steady downside track. The London market continued to end on a near to steady note and having recovered 66.7% of the earlier late in the day losses, while the New York market ended the day on a soft note and with 92.4% of the losses of the day intact. This close and the lack of fundamental supportive news does little to buoy confidence and one might expect to see a steady to soft start for thin early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1917 – 1 MAR 1947 – 3 MAR 161.25 – 3.05 MAY 1976 – 3 MAY 163.95 – 3.05 JUL 2000 – 2 JUL 166.45 – 3.00 SEP 2020 – 2 SEP 168.65 – 3.00 NOV 2028 – 2 DEC 171.75 – 3.05 JAN 2036 – 2 MAR 174.00 – 3.30 MAR 2052 – 2 MAY 174.75 – 3.55 MAY 2069 unch JUL 174.85 – 3.65 JUL 2085 + 3 SEP 174.85 – 3.65
Coffee Market Report January 21 2015 The relatively high profile Brazilian trade house Comexim reported yesterday that with the have assessed the 2014 Brazil coffee crop to have been 48.45 million bags, which is a number that is very much in line with many other respected trade and industry reports. Added to this they have assessed that the private cooperative, farm trade and industry stocks into this new crop and as at 1st. July last year, were 10.6 million bags and therefore indicating a coffee supply of 59.05 million bags and this aside from the 1.7 million bags of government coffee stocks. These Comexim figure with an approximate combined domestic and export coffee demand of around 54 million bags per annum would indicate the potential for carryover coffee stocks into the new 2015 Brazil coffee crop of approximately 5 million bags and this aside from the additional 1.7 million bags of government stocks, which would further indicate that unless the new crop were to dip below 48 million bags, that Brazil coffee supply is potentially safe trough to the 2016 crop. Thus with the prospects for rains to end of this month and with many still forecasting a new crop that shall exceed 48 million bags, the report tended to dampen some of the spirit of the speculative bulls within the New York market. One might comment in terms of demand for Brazil coffees where the critical factor has been and continues to be the arabica coffee districts in south east Brazil, rather than the main conilon robusta coffee districts further to the north that have not suffered as much from the low rain factor, that the consumer market demand for Brazil arabica coffees is no longer as critical as it was over the past two years. This year sees rising washed arabica coffee supply now coming in from Central America and Colombia and soon to be followed as the year progresses, by rising washed arabica coffee supply from Peru and thus the potential for the consumer markets to live with 2 to 3 million bags less Brazil arabica coffee supply for the year. Thus with the evidence of good levels of consumer market coffees stocks, flat to even weakening demand from the Europe the largest consumer market and rising Latin American washed arabica coffee supply and still reasonable natural arabica coffee stocks within Brazil, there remain for the present little in the way of concern over longer term coffee supply on the part of the consumer market industries. This is of course so long as there are no further weather problems for south eastern Brazil, to threaten and significantly lower the developing new Brazil arabica coffee crop potential and this can really only be known better by the end of next month and with the evidence of the January and February rains in hand. Meanwhile more damaging to market confidence yesterday afternoon was a host of weather forecasts that are coming to the market that now not only indicate a wet end to the month for south east Brazil and following the three weeks of hot and dry weather, but some not talking of a wet start to the month of February. These forecasts indicating that there is little chance to see a repeat of the partial drought that was experienced over the first two months of last year within south east Brazil and dampening the spirits of the speculative bulls within the more volatile and active New York market, which is now showing a degree of exhaustion. The arbitrage between the markets has narrowed yesterday to register this at 75.85 usc/Lb., while this equates to a relatively attractive 46.17% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,315 bags yesterday, to register these stocks at 2,293,276 bags. There was meanwhile a larger in volume 3,738 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 10,393 bags. The commodity market were mixed yesterday with the influential American players returning from their long weekend Martin Luther King holiday to the news of a twenty four year low in Chinese growth, albeit still nevertheless impressive growth due for this year. While in terms of sentiment for the day there were many who were distracted by yesterday’s state of the nation address by the American President which did prove to be positive in terms of its confirmation of longer term positive growth for the U.S.A. The Sugar, Wheat, Corn, Gold, Silver and Platinum markets had a day of buoyancy and the Orange Juice market was steady, while the Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper and Soybean markets had softer days trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.24% lower; to see this Index registered at 439.24. The day starts with the U.S. Dollar relatively steady and trading at 1.517 to Sterling and 1.159 to the Euro, while North Sea Oil is near to steady in early trade and is selling at $ 46.25 per barrel. The London and New York markets started the day on a steady note and started to add value and take a positive track into the afternoon’s trade, but with volumes remaining relatively thin. As the afternoon progressed however and with the Americans entering the field of play both markets came under seemingly speculative pressure and headed down into negative territory and with sell stops being triggered to both increase the volumes of trade and accentuate the losses. The London market continued on a very much sideways track at its lower levels and the end the day on a soft note and with 67.7% of the earlier losses of the day intact, while the New York market that was suffering from both the negative influences of a softer macro commodity index and the Brazil rain reports dent to speculative confidence ended the day on a very soft note and with 93.7% of the earlier losses of the day intact. This close has to be seen to be negative for sentiment and especially so with the Brazil rains now so close and one might expect to see little better than a cautious steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1918 – 21 MAR 1950 – 21 MAR 164.30 – 6.70 MAY 1979 – 20 MAY 167.00 – 6.65 JUL 2002 – 21 JUL 169.45 – 6.65 SEP 2022 – 21 SEP 171.65 – 6.45 NOV 2030 – 21 DEC 174.80 – 6.30 JAN 2038 – 19 MAR 177.30 – 6.05 MAR 2054 – 16 MAY 178.30 – 5.90 MAY 2069 – 16 JUL 178.50 – 5.90 JUL 2082 – 10 SEP 178.50 – 5.80
Coffee Market Report January 20 2015 The latest Commitment of Traders report from the London robusta coffee has reported that the speculative sector of this market increase their net long position within this market by 31.06% in the week of trade leading up to Tuesday 13th. January, to see this long position turned into a net long that was registered at 14,315 Lots, on the day. This speculative net long position within the London market which is the equivalent of a relatively modest 2,385,833 bags has most likely been little changed to perhaps register a marginal decrease during the period of mixed trade that has since followed. This London robusta coffee market with the new Vietnam crop largely seen to have been steady to modestly smaller than the previous crop, is likely to shrug off the negative influences that come with the prospects for larger new robusta coffee crops due from Indonesia and India this year, along with modestly rising supply from Africa, as the main driver of growth in world consumption is heavily weighted towards the new markets and the relatively inexpensive robusta coffees. However this does not detract from the fact that the London market with robusta coffee demand seemingly matching supply shall to a degree, continue to track the fortunes of the more volatile New York market. This latter market presently shrugging off the negative influences of rising washed arabica coffee supply and perhaps even surplus washed arabica coffee supply, on the speculation for deficit new natural arabica coffee supply, which would come with another modest Brazil crop this year. In terms of the prospects for the new Brazil arabica coffee crop which has been negatively affected by the stresses experienced within many coffee farms during the partial drought they experienced during the first two months of last year and followed by a late start to the present spring and summer rain season, there remain some concerns over the relatively modest rains experienced for the start of this year. The latest forecasts do however talk of a new cold front and fair rains for most of the Brazil arabica coffee districts for the latter half of this week and through to the end of the month. These rains that follow a couple of weeks of mostly hot and dry weather and are not expected to do much more than influence the rainfall for the month to be much more than 50% of the monthly average for the month, but they do nevertheless bring much needed moisture to the developing new coffee crop. Thus while there are many that have suggested that the modest nature of these rains might have done some further damage to the new arabica coffee crop potential, the question is with at least fair ground water retention levels following the reasonable November and December rains if the two to three weeks of dry weather has in fact been damaging, which is a factor that took some of the wind out of the sails of the speculative bulls within the New York market at the end of last week. But there is no question that the relatively dry January would have lowered ground water retention levels and that fair follow through rains shall be required during February in south east Brazil, if there is to be stability for the development of the new arabica coffee crop. Thus while the New York market might have lost some of its steam, there is still the possibility for renewed volatility and buoyancy during the coming month, should hot and dry weather return and thus one might think, that there might be some degree of short term caution shown by the speculative sector of the market in the coming days, which may limit the downside potential for the market. The arbitrage between the markets has narrowed yesterday to register this at 81.60 usc/Lb., while this equates to a relatively attractive 47.72% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 500 bags yesterday, to register these stocks at 2,291,961 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 14,131 bags. Many of the commodity markets were closed yesterday, with the observation of Martin Luther King Day in the U.S.A., which resulted in a long weekend for many market players. Meanwhile with the world’s economic drivers distracted by the safari to Davos Switzerland for the World Economic Forum that shall take place over Wednesday to Saturday this week, one might expect that is shall prove to be something of a distraction in terms of fundamental influences within many markets. The London robusta Coffee and Platinum markets showed buoyancy yesterday, while the Oil, Natural Gas, Sugar, Cocoa, Copper Gold and Silver markets tended softer. With many markets closed the Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is unchanged; to see this Index registered at 444.74. The day starts with the U.S. Dollar steady and trading at 1.508 to Sterling and 1.158 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 46.60 per barrel. The London trading solo yesterday and following the soft end to last week for both markets, started the day yesterday on a thinly traded lower note. This remained the track into the early afternoon trade, which remained lacklustre in nature, but with some degree of recovery coming into play later in the afternoon. This saw the market recover its losses and move into modest positive territory and briefly build upon its gains, but soon encountering selling activity to pressure the market back towards par. The London market continued to end the day with very modest buoyancy and with only 7.7% of the earlier gains of the day intact, which gives little guidance for sentiment and one might expect little better than a steady to soft start for early trade today against the prices set in London yesterday and New York on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1939 – 2 MAR 1971 + 1 MAR 171.00 – 5.65 MAY 1999 + 2 MAY 173.65 – 5.65 JUL 2023 + 2 JUL 176.10 – 5.60 SEP 2043 + 3 SEP 178.10 – 5.65 NOV 2051 + 3 DEC 181.10 – 5.55 JAN 2057 + 3 MAR 183.35 – 5.55 MAR 2070 + 3 MAY 184.20 – 5.65 MAY 2085 + 3 JUL 184.40 – 5.50 JUL 2092 + 3 SEP 184.30 – 5.45
Coffee Market Report January 19 2015 The latest Commitment of Traders report from the washed arabica coffee New York market has seen the shorter term in nature Managed Money Fund sector of the market increase their net long position within this market by 12.05% in the week of trade leading up to Tuesday 13th. January; to register a net long position of 27,623 Lots on the day. Over the same period the longer term in nature and steadier Index Fund sector of this market decreased their net long position within the market by 29.85%, to register a net long on the day of 28,017 Lots. This latter sharp drop on the part of the Index funds long positions, having been related to the New Year fund rebalancing activity, which is correcting the relatively inflated value share that the commodity was holding within the overall funds positions. During this same week of trade the Non Commercial Speculative sector of the market increased their net long position within the market by 57.76%, to register a net long of 24,117 lots on the day. This net long position that is the equivalent of 6,837,063 bags has most likely been decreased over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds. The National Export Council in Nicaragua have reported that the countries coffee exports for the month of December were 21,779 bags or 83.87% higher than the same month in the previous year, at a total of 47,746 bags. This figure contributes to the countries cumulative exports for the first three months of the new October 2014 to September 2015 coffee year being 78,649 bags or 79% higher than the same period in the previous coffee year, at a total of 178,210 bags. The Vietnam Customs authorities have reported that following coffee exports of mostly robusta coffees during the month of December of 1.92 million bags, the countries cumulative coffee exports for the first three months of the present October 2014 to September 2015 coffee year are 7% higher than the same period in the previous coffee year, at a total of 4,920,000 bags. It is noted however that the exports in December have been reported and well below the forecasted expectations for exports for the month of between 2 million to 2.5 million bags, which perhaps is related to the present internal market price resistance that is being experienced within Vietnam, which is inflating asking differentials for new business and is slowing new business activity on the part of the international coffee trade. The National Coffee Council in Brazil has reported on Friday that the latest new crop forecast by the National Crop Supply Agency CONAB has not really given sufficient consideration to the dry start to the month of January and that in reality, the new crop might be smaller than the 44.1 to 46.6 million bags CONAB forecast. This report alike the CONAB report, does not take into account the very much discounted Conilon robusta coffee factor included within the overall figures and with this in mind, most private trade and industry players would already be adding at least 4 million bags and perhaps even more, to these quoted official figures. Adding to these further comments on the matter of Brazil weather was a report on Friday by the Brazilian Electrical Grid Operators in South East Brazil, who forecasted that they expect to see only 44% of the monthly average rainfall for their hydro power reservoirs during January. This report by nature indicating the lower rainfall that could be expected for the neighbouring coffee districts, but one might comment that unlike last years’ experience of almost no rain in these districts in January, that there is at least some rain and one cannot repeat the drought talk of last year. Thus one needs to show a degree of caution towards some of the more dramatic scare stories that are being voiced, over the negative weather effect upon the prospects for the new and relatively modest 2015 Brazil crop. The arbitrage between the markets has narrowed on Friday to register this at 81.64 usc/Lb., while this equates to a relatively attractive 47.74% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 825 bags on Friday, to register these stocks at 2,292,461 bags. There was meanwhile a larger in volume 4,196 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 14,131 bags. The commodity markets were mixed on Friday, but with the recently battered Oil markets that are now trading well below cost for many leading producers, finally showing some modest reversal in their fortunes. The Oil, Copper, Wheat, Corn, Gold, Silver and Platinum markets had day of buoyancy and the Orange Juice and Soybean markets were steady, while the Natural Gas, Sugar, Cocoa, Coffee and Cotton markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.56% higher; to see this Index registered at 444.74. The day starts with the U.S. Dollar steady and trading at 1.514 to Sterling and 1.156 to the Euro, while North Sea Oil is tending easier in early trade and is selling at $ 48.00 per barrel. The London and New York markets started the day on Friday on a steady not in very thin trade, but with the markets tending marginally softer in hesitant, thin and lacklustre afternoon trade. As the afternoon progressed and with the reports and forecasts for improved rains for south eastern Brazil for this week coming into play to dampen speculative spirits, both markets continued on a steady downside track for the rest of the relatively quiet days trade. The London market continued to end the day on a soft note and with 70% of the losses of the day intact, while the New York market ended the day on a very soft note and with 90.4% of the losses of the day intact. This soft close and with the further Brazil weather reports and forecasts only due later in the day, is likely to see the markets encounter thin and cautious near to steady activity for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1941 – 32 MAR 1970 – 28 MAR 171.00 – 5.65 MAY 1997 – 30 MAY 173.65 – 5.65 JUL 2021 – 30 JUL 176.10 – 5.60 SEP 2040 – 30 SEP 178.10 – 5.65 NOV 2048 – 31 DEC 181.10 – 5.55 JAN 2054 – 33 MAR 183.35 – 5.55 MAR 2067 – 33 MAY 184.20 – 5.65 MAY 2082 – 33 JUL 184.40 – 5.50 JUL 2089 – 33 SEP 184.30 – 5.45
Coffee Market Report January 16 2015 The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 169,190 bags or 2.97% during the month of December, to register these stocks at 5,524,964 bags at the end of the month. These stocks do not of course include the in transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is fed by these stocks of 490,000 bags per week, would conservatively have been at least 1 million bags. Therefore if one is to consider the additional unreported stocks and look to end August stocks in North America of at the very least 6,524,964 bags, it would have equated to at least a very safe 13.3 weeks of roasting activity and still a safe reserve, ahead of the pending delivery of increasing volumes of new crop coffees from Mexico, Central America, Colombia and Vietnam. These new crop coffees and however not expected to surge in supply, as the North American roasters alike the consumer industries worldwide, remain slow and steady buyers against what many predict to be a market that should the rains come in Brazil next week, might still lose some more weight. One might further comment that with these 2014 year-end U.S.A. stocks seen to be a significant 438,246 bags or 8.62% higher than they were at the end of the previous year, the report is not really that supportive for market sentiment. With only the uncertain and erratic weather issues within Brazil proving to be a factor that can counter the negative nature of the evidence of good consumer stock levels and potentially more than adequate coffee supply, from most of the producer blocs. While their southern neighbours in Central America are all coming out of the past two years of severe problems from Roya or Leaf Rust and are looking to increased new crops from the harvest that is presently in progress, the Mexican National Coffee Association has reported that due to the devastating effects of the Roya infestation, they are looking at a the probability of an 12.8% to 17.9% lower new crop. In this respect and with the new crop presently being harvested, they are forecasting a relatively modest new crop of between 3.2 and 3.4 million bags. This forecast is rather dramatically lower than the many trade and industry forecasts that have been talking a New Mexican crop of fine washed arabica coffee, which they expected to be well in excess of 4 million bags and likewise a past crop of in excess of 4 million bags. While this Mexican National Coffee Association forecast and percentage dip, has been based on the past crop having been a lower figure of 3.9 million bags. Thus one might suggest that with the rather high percentage drop that has been quoted, that it is likely that there might be some degree of market manipulation might be related to the forecast, which shall see the market players take a cautious wait and see stance towards this report. The well respected Brazil analysts Safras & Mercado who have assessed the 2014 Brazil crop at 48.9 million bags, have estimated that by the end of last week 72% of the coffees from this new crop had been sold. This is a significantly higher percentage than the 63% factor they applied for the same time last year from the previous crops coffees, which would indicate that this well sold factor shall see internal market selling activity start to slow for the first half of this year. Thus lessening the price fixation selling activity on the part of Brazilian exporters, but perhaps to be replaced by similar activity on the part of exporters hedging their purchases out of the new crops in Mexico, Central America, Vietnam and India and thus, one would say the news is somewhat neutral to the market. Somar Meteorologists in Brazil reported yesterday that they foresee hot and mostly dry weather for south eastern Brazil over the weekend and for the first couple of days of next week, but with rains to come during the second half of the week and through to the end of the month. These are however very much catch up rains so to speak and the report forecasted that the January rainfall for many districts shall be 48% below average, but unlike last year where there was almost no rain for many of the districts. Thus one might comment that there are at least some rains forthcoming and perhaps sufficient so long as rainfall over the coming two to three months is close to average levels, to ensure the steady development of the forthcoming new crop. But there is no guarantee that the rains in February shall be normal, as the U.S.A. based Commodity Weather Group has forecasted the potential for a hot and dry spell for south eastern Brazil for early February, but without any comment from thereon. Thus one can foresee these issues of rain and the focus of the speculative trade shall remain upon the day by day weather reports out of Brazil, to maintain volatility within the New York market for the coming weeks. The arbitrage between the markets has narrowed yesterday to register this at 86.02 usc/Lb., while this equates to a relatively attractive 48.70% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,092 bags yesterday, to register these stocks at 2,293,286 bags. There was meanwhile a similar in volume 2,028 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 9,935 bags. The commodity markets were mixed yesterday, but with some relatively sharp moves either side of par encountered within many of the markets. The Sugar, London robusta Coffee, Cotton, Copper, Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy, while the Oil, Natural Gas, Cocoa, New York arabica Coffee, Wheat, Corn and Soybean markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.21% lower; to see this Index registered at 442.27. The day starts with the U.S. Dollar steady and trading at 1.517 to Sterling and 1.163 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 48.10 per barrel. The London and New York markets started the day yesterday on a positive note and with both markets building upon their gains as they entered the afternoon trade, but with the New York market losing its way as the afternoon progressed and shedding its gains, while the London market maintained the earlier in the days muscle. The New York market dipped back into negative territory while the London market remained positive and post a brief recovery for the New York market, the track for the rest of the day was south and with the London market shedding most of its weight. The London market continued to end the day on a modestly positive note but with only 13.5% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 68.8% of the losses of the day intact. This close is unlikely to inspire much more than a steady start in thin and cautious trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JAN 1973 + 5 MAR 1998 + 5 MAR 176.65 – 3.20 MAY 2027 + 3 MAY 179.30 – 3.25 JUL 2051 + 4 JUL 181.70 – 3.25 SEP 2070 + 4 SEP 183.75 – 3.15 NOV 2079 + 4 DEC 186.65 – 3.05 JAN 2087 + 4 MAR 188.90 – 2.70 MAR 2100 + 4 MAY 189.85 – 2.45 MAY 2115 + 4 JUL 189.90 – 2.45 JUL 2122 + 4 SEP 189.75 – 2.40
Coffee Market Report January 15 2015 The government in El Salvador have voiced their intent to invest in support programs to assist approximately 30% of their coffee farmers and presumably the small scale farmers in this country that has its coffee industry dominated by relatively wealthy commercial farmers, to replant their farms with new disease resistant and higher yielding coffee trees. These programs which follow the very successful examples of Colombia and Honduras and are similarly to Honduras a five year plan, are designed to see the country that has seen the recent problems of Roya or Leaf Rust dip their crop from 1.3 million bags to below 700,000 bags, target annual crops of in excess of 2 million bags in the coming years. The speculative sector of the New York coffee market took the reins of market sentiment yesterday to lead the markets into a rally and see New York briefly head towards a six week high, as concerns over the dry weather in south east Brazil fuelled positive sentiment, with the London market following the track being set by the volatile New York market. There was however late in the day a cap to the market that was attracting light producer price fixation selling, from index fund re-balancing selling and the markets settled back to set a more modest positive end to the day. One must however question within what is presently a very emotive and volatile New York market, what might be the reaction to the forecasted rains for latter half of next week and thereon, into what is forecasted to be normal rainfall conditions in February. With the potential with new crop coffee stocks now building up in Mexico and Central America and competing with Colombia for market share within the top end fine washed arabica coffee sector of the mainstream developed consumer markets, for more aggressive selling activity and the resulting price fixation selling into the New York market. In this respect there is the potential for rains to trigger both speculative profit taking selling and to bring to the market more aggressive producer selling activity, but the biggest question is how much more traction might there be for the presently rising New York market and at what level it might be when it shall potentially hit a Brazil rain inspired tipping point. Meanwhile within an environment of a significant downside track for the macro commodity index that is being effected by soft economic forecasts for the year and the renewed muscle of the U.S. dollar, the coffee markets are something of a solo star for the present and with the New York market as at yesterdays close having posted a 7.95% increase for the year, while the London market is a more modest 4.02% higher for the year. This relatively good buoyancy that follows the coffee markets having been the best performer out of all markets in 2014 and based on the supportive fundamentals of Brazil weather, might still be vulnerable to a couple of months of fair weather in Brazil that would influence a degree of speculative exhaustion and catch up producer selling activity within the coffee markets. Thus focus for the present is very much upon the day by day Brazil weather reports and forecasts. The arbitrage between the markets has broadened yesterday to register this at 89.45 usc/Lb., while this equates to a relatively attractive 49.74% price discount for the London robusta coffee market. This arbitrage is continuing to inspire consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,245 bags yesterday, to register these stocks at 2,291,194 bags. There was meanwhile a larger in volume 14,265 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 11,963 bags. The commodity markets encountered the somewhat negative news of the World Bank’s lowering of their forecast for global growth to 3% from 3.4% for 2015 and the 0.9% dip in U.S. retail sales for November last year, which both impacted upon prospects for softer demand. But with most markets already well sold, these reports had little influence upon the overall flat and soft macro commodity index. The U.S. Oil, Natural Gas, Sugar, Coffee, Orange Juice, Gold, Silver and Platinum markets showed buoyancy and he Cocoa market was near to steady, while the Brent Oil, Cotton, Wheat, Corn and Soybean markets had a softer day’s trade and the Copper market with a 5.77% loss for the day, was perhaps the headline market for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.33% higher; to see this Index registered at 443.19. The day starts with the U.S. Dollar steady and trading at 1.522 to Sterling and 1.176 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at $ 48.05 per barrel. The London and New York markets started the day yesterday on a positive note and with both https://www.iandmsmith.com/wp-content/uploads/2025/12/new-logo.png 0 0 admin https://www.iandmsmith.com/wp-content/uploads/2025/12/new-logo.png admin2015-01-27 11:53:002015-01-27 11:53:00Coffee Market Report |
