Coffee Market Report
| Brazil’s and the world’s largest coffee cooperative Cooxupe have reported that their members have so far completed 51% of the new crop harvest, which is well ahead of the 34.2% factor at the same time last year. This confirms that with the Brazil conilon harvest now almost completed, that the arabica coffee harvest is at its peak and that this crop shall most likely be completed by late next month and well ahead of the October to April summer rain season.
Meanwhile the issues of frost within some of the Brazil arabica coffee districts has seemingly proved to be of no consequence and with forecasts for warmer dry weather to come for the rest of the week, it shall be favourable for harvest conditions and to further accelerate the arabica coffee harvest. However with little in the way of carryover stocks into new crop and with rising costs while the Brazil Real that had been trading as low as below 4 to the U.S. dollar earlier in the year and has now recovered to 3.24 to the U.S. dollar, there is no evidence of selling aggression within the internal market for new crop coffees. The issue of the month and half long truckers strike within Colombia that has severely disrupted internal trade continues to impact upon the countries coffee industry, with the coffees from the new Mitaca harvest that is presently in progress being stuck within the internal market collection stations and mills. While with little in the way of processed coffees being moved into the export ports and port stocks now low, the Colombian coffee export volumes are starting to dry up. So far however and with consumer market stocks relatively good the slowdown of incoming coffees from Colombian has not yet had a severe impact upon industry supply and particularly so, as the main consumer industries are within the northern hemisphere and are presently within their slow summer holiday roasting season. However unless the strike within Colombian is soon resolved, one might expect that the shortage of new Colombian fine washed arabica coffee deliveries which contribute to a major share of fine washed arabica coffee supply, shall start to become a problem for consumer market roasters. While one might expect that there shall soon be a draw down starting for the Colombian coffees that are being held with the certified stocks of the New York market, which are presently standing at 388,162 bags. The largest contribution to these stocks and followed, by the good percentage of the stocks that are related to Peru and Honduras coffees. The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 64.36 usc/Lb., while this equates to a 43.92% 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 1,375 yesterday; to register these stocks at 1,299,745 bags. There was meanwhile a smaller in volume 275 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 24,618 bags. The Certified Robusta coffee stocks held against the London exchange were seen to decline by 20,667 bags or 0.83% over the week of trade leading up to Monday 18th. July, to register these stocks at 2,466,000 bags, on the day. The stability of these relatively inexpensive robusta coffee stocks confirming that despite the slowdown in Brazil conilon and Indonesian robusta coffee exports due to their relatively modest new crops, is still being well countered by the steady good volume supply of robusta coffees from Vietnam. The commodity markets against a relatively strong U.S. dollar that is benefiting from continued positive economic figures from the U.S.A. were mostly under some pressure yesterday, with the overall macro commodity index taking a softer track for the day. The Natural Gas, Copper and Gold markets did nevertheless have a day of modest buoyancy and the Sugar and London robusta Coffee markets were near to steady, while the Oil, Cocoa, Cotton, Orange Juice, Wheat, Corn, Soybean and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.16% lower; to see this Index registered at 426.06. The day starts with the U.S. dollar steady and trading at 1.310 to Sterling and 1.102 to the Euro, while North Sea Oil is showing a degree of modest buoyancy in early trade and trading at 45.60 per barrel. The London and New York markets predictably started the day yesterday with follow through buoyancy, with the uncertainty of the pending early morning weather reports out of Brazil proving to be supportive for cautious early trade for the more volatile New York market. This assisted the markets to take a thinly traded positive track into the early afternoon, but with the New York market soon starting to react to the lack of supportive news and moving back into negative territory, while the London market slipped back but managed to remain close to par. There was however a brief modest recovery for both markets but this was short lived and the New York market slipped back to take a negative track for the rest of the day, while the London market settled back to end the day near to par and with only 33.3% of the earlier modest losses of the day intact, but with the New York market ending the day on a soft note and with 90.6% of the earlier losses of the day intact. This close and with the New York market lacking further supportive news seemingly running out of steam for the present, is unlikely to inspire little better than a near to steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1801 – 4 JUL 144.65 – 3.15 |
