Coffee Market Report
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Coffee Market Report March 02 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 54.78% in the week of trade leading up to Tuesday 24th. February; to register a net long position of 6,367 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 1.01%, to register a net long on the day of 25,290 Lots. During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 87.13%, to register a net long of 1,139 lots on the day. This net long position that is the equivalent of 322,901 bags has most likely been further decreased to perhaps even moved into a net short sold position over the period of mixed but overall negative trade that has since followed and likewise, the net long position of the Managed Money Funds has most likely been further reduced. The question is what influence might the evidence of the liquidation of the net long position of the Non Commercial Speculative sector of the market that might have already by now turned into a net short position have upon speculative sector the market for trade this week, as with the uncertainty of the forthcoming Brazil frost season and the follow on rain season, there might be some caution to sell the market too short. Thus with the probability that the managed money funds might have also liquidated more of their now relatively modest net long position during last week’s trade, it might well assist to inspire some degree of corrective buying into the somewhat oversold New York market. The International Coffee Organisation have reported that the world coffee exports for the month of January were 0.23% higher than the same month last year, at a total of 8.79 million bags. While they have also reported that for the period of February 2014 to January 2015 the world coffee exports were 1.76 million bags or 1.6% higher than the previous twelve months, at a total of 112 million bags. One has to however make note that exports do not always accurately relate to consumption, as in the meantime there has been some increase in the consumer market stock levels, with many estimating that consumer market consumption is still only approximately 102 million bags per annum. While within the export figures, there are a percentage of coffees that also move in the direction of some producer countries, who take in price competitive imports to subsidise their domestic coffee requirements. Coffee producing countries many now forecast to have a domestic coffee demand of approximately 47 million bags per annum. What is noticeable however within this relatively modest rise in official world coffee exports over the past twelve months is that there was only a marginal 0.09% increase in the exports of arabica coffees, while there was a significant 4.06% increase in the exports of the more affordable robusta coffees, which is most probably related to the combination of the fact that consumer market consumer market growth is more related to the price sensitive new markets and meanwhile, the higher percentages of robusta coffees being used within the blends within the competitive developed coffee markets. The arbitrage between the markets has narrowed on Friday to register this at 54.00 usc/Lb., while this equates to a relatively attractive 38.43% 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. Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to firm. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,574 bags on Friday, to register these stocks at 2,271,307 bags. There was meanwhile a smaller in volume 5,604 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,232 bags. The commodity markets were mixed on Friday, but with the macro commodity index tending to shrug off the negative influences of the strong dollar and tending positive for the day. In the meantime though the relatively damp growth prospects for the Chinese economy is not assisting to inspire confidence within many markets and for the present, the overall macro commodity index is relatively flat in nature. The Oil, Cocoa, London robusta Coffee, Wheat, Corn and Soybean markets had a day of buoyancy, while the New York arabica Coffee, Gold and Platinum markets were steady, while the Sugar, Cotton, Copper and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.84% higher; to see this Index registered at 434.06. The day starts with the U.S. Dollar once again showing its muscle and trading at 1.541 to Sterling and 1.118 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 64.00 per barrel. The London market started the day on Friday with modest buoyancy and followed by a similarly positive stance being taken within the thinly traded New York market, with both market adding a little more weight in early afternoon trade. However as the afternoon progressed and with the Americas upon the field of play the markets slipped back to close to par, there was however a recovery for both markets and a move back into positive territory, but while the London market held on to its gains, the New York market once again faltered near to the end of the day’s trade. The London market continued to end the day on a positive note and with 82.6% of the gains of the day intact, while the New York market ended the day on a steady note and on par with the previous day’s close. The close on Friday while not convincing for the New York market, might nevertheless in light of the much reduced net long figures reported within the commitment of traders report of the New York market inspire some degree of support for the New York market and a near to steady start for the London market in thin early trade, against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1871 + 37 MAR 136.75 + 0.20 MAY 1907 + 38 MAY 140.50 – 0.05 JUL 1929 + 35 JUL 143.50 + 0.05 SEP 1953 + 34 SEP 146.25 + 0.05 NOV 1970 + 34 DEC 150.00 unch JAN 1983 + 34 MAR 153.25 unch MAR 1998 + 29 MAY 154.85 + 0.15 MAY 2011 + 20 JUL 155.30 + 0.35 JUL 2033 + 18 SEP 155.40 + 0.50 SEP 2045 + 18 DEC 155.35 + 0.55
Coffee Market Report February 27 2015 The Vietnam customs authorities and with more specific data now at hand, have revised upwards their earlier forecasted January coffee exports number by 206,667 bags, to now register January coffee exports at 2,206,667 bags. While with the export registrations already at hand and this short February Tet New Year holiday interrupted month near to its end, they have forecasted that coffee exports for the month and made up of mostly robusta coffees, shall be 40.8% lower than the same month last year, at a total of 1,820,000 bags. This official forecasted February export figure is in fact remarkably higher than the 1.42 million bags to 1.67 million bags that has been suggested by the private trade and industry players within Vietnam and thus one would doubt that the February exports shall prove to be in excess of the Vietnam customs authorities number. While if one is to apply this Vietnam customs export forecast to the coffee exports reported for the previous four months, it would indicate the potential exports for the first five months of the present October 2014 to September 2015 coffee year to be 11% lower than the same period in the previous coffee year, at a total of 8,943,333 bags. One might comment however that over the past few months and since the reference prices of the London market started to soften, that it has caused the internal market to show a significant degree of price resistance to the exporters offering prices. This has resulted in relatively high asking export differentials from the exporters, which has resulted in declining interest on the part of the international trade to take on trade stocks and rather related sales to the direct roaster delivery requirements, which has impacted negatively upon the volumes of demand for new crop Vietnam robusta coffees. Thus the dip in Vietnam robusta coffee exports that does not actually relate to any shortage of available coffees has no impact upon market sentiment towards the London market. The Brazil weather conditions over the main coffee districts have dried up a bit this week, but with the odd scattered showers having been experienced during the week, to eliminate any fears of stress for the maturing new crop cherries. There is however good rains forecast to move in from the south for the main arabica coffee districts in South East Brazil for next week, which shall presumably put the Brazil rain factor out of the picture for some weeks and leaving only the debate over the prospects for the new crop. Meanwhile with the dip in the reference prices of the New York market over the past couple of weeks and with farmers already well sold for the present, they are showing price resistance and the internal market selling activity has been lacklustre over the past week. While with having to pay up higher prices relative to the reference prices of the New York market for new stocks, the exporter’s asking price differentials for new business is slowing the pace of new business. This is very much the case in most arabica and robusta coffee origins, where the disbelieving farmers and internal market traders are resisting the downside influences of the softening terminal markets and are forcing exporter asking differentials higher. However the consumer markets are presently still holding good stocks and short term forward cover and are not aggressively chasing new business and this is resulting in slow physical coffee business for the present. The arbitrage between the markets has narrowed yesterday to register this at 55.77 usc/Lb., while this equates to a relatively attractive 39.68% 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. Especially so, as with the presently lower trading range within the New York market, the arabica coffee differentials relative to this market are tending to firm. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,255 bags yesterday, to register these stocks at 2,279,881 bags. There was meanwhile a larger in volume 6,845 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 16,628 bags. The commodity markets with a strong U.S. dollar in play were mixed yesterday, but with the macro commodity index once again tending softer for the day. The Sugar, Cocoa, Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets showed buoyancy, while the Oil, Natural Gas, Coffee and Orange Juice markets having a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.27% lower; to see this Index registered at 430.44. The day starts with the U.S. Dollar once again showing its muscle and trading at 1.544 to Sterling and 1.122 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 61.25 per barrel. The London market started the day yesterday on a near to steady note and followed by some very modest buoyancy for the New York market, but with both markets soon losing their way in thin and lacklustre trade, to enter the afternoon on a modestly softer to steady track. This was however not sustained and as the afternoon progressed and with the entrance upon the field of play of the Americans the New York market started to come under renewed pressure but not in the volumes of the previous days, to see the New York market lose some more weight and with the London market likewise taking a soft stance. The London market continued to end the day on a soft note and with 70.8% of the earlier losses of the day intact, while the New York market carried on to end the day on a soft note and with 92.1% of the earlier losses of the day intact. This soft close does little to inspire confidence and one might expect to see 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. MAR 1834 – 16 MAR 136.55 – 3.20 MAY 1869 – 17 MAY 140.55 – 2.90 JUL 1894 – 19 JUL 143.45 – 2.90 SEP 1919 – 18 SEP 146.20 – 2.90 NOV 1936 – 18 DEC 150.00 – 2.85 JAN 1949 – 19 MAR 153.25 – 2.70 MAR 1969 – 18 MAY 154.70 – 2.30 MAY 1991 – 16 JUL 154.95 – 2.30 JUL 2015 – 16 SEP 154.90 – 2.35 SEP 2027 – 16 DEC 154.80 – 2.50
Coffee Market Report February 26 2015 The Uganda Coffee Development Authority have reported that the countries coffee exports for the month of January were 8,263 bags or 2.59% lower than the same month last year, at a total of 310,829 bags. The lower performance follows more restrained export volumes for the last quarter of last year and therefore the cumulative coffee exports for the first four months of the present October 2014 to September 2015 coffee year are 137,745 bags or 12.27% lower than the same period in the previous coffee year, at a total of 985,018 bags. However in terms of value and despite the 12.27% dip in volume, the value of Uganda’s coffee exports for the first four months of the present coffee year is $ 16,188,362.00 or 14.27% higher than the same period in the previous coffee year, a total of $ 129,640,670.00. This added value and in terms of US dollars that now have some more muscle, will do much to inspire the further growth within this already growing coffee industry that while being the second largest producer after Ethiopia in terms of exports, is tending to top the list as the largest coffee volume exporter in Africa. This dip in export performance from Uganda has been forecasted to continue during the month of February, with some estimating that due to the negative effects of dry weather for the central and eastern districts on new crop volumes and deliveries, that there could be as much as a 30% dip for the month. One might also presume that the negative effects of the reversal of the fortunes of the reference prices of the international coffee markets shall also have some negative effect upon coffee deliveries from Uganda, with exporters struggling to match the consumer market industry price dictates to the price demands of the internal market farmers and traders. This factor of internal market price resistance is common to most producers and producer blocs for the present and with these demands forcing exporters of both arabica and robusta coffees to have raised their price differentials relative to the terminal market values, for new business. This is tending to retard new business and the physical coffee trade is in many instances stalled, while relatively well stocked consumer market industry players stand back to play the waiting game, as they foresee that finally the producers shall be obliged to accept the price dictates of the fund dominated terminal markets. Albeit that in terms of production for many producers, the present trading range of the markets is falling below cost of production, but this is a factor that has never been a concern of the chart influenced funds. Well illustrating the negative effects upon export sales of the reversal in the fortunes of the coffee terminal markets is the report that the arabica coffee exports for the start of this year so far are approximately 50% lower than the same period last year, which is a factor that well exceeds the fact that this new arabica coffee crop might be marginally lower than the previous crops output. The country is however forecasting a much larger new robusta crop which is presently starting to come to the market and one would think that these coffees might more easily come to the market, to see overall Indian export volumes start to pick up during the second quarter of the year. The truckers strike in Brazil continues and with not success forthcoming from yesterday’s negotiations, but the Brazilian police did yesterday clear the truckers blockade of the routes into the leading port of Santos and for the present, there has not been any marked disruption of coffee shipments. There are however concerns that if a solution is not soon agreed, that the truckers could escalate and broaden within the country their disruptive activities and cause hiccups to deliveries of grains, soybeans and coffee to the port. The arbitrage between the markets has narrowed yesterday to register this at 57.90 usc/Lb., while this equates to a relatively attractive 40.36% 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 6,712 bags yesterday, to register these stocks at 2,277,626 bags. There was meanwhile a larger in volume 11,815 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 23,473 bags. The commodity markets were mixed yesterday, with the macro commodity index remaining relatively steady for the day. The Oil, Cotton, Copper, Gold, Silver and Platinum markets showed buoyancy for the day, while the Natural Gas, Cocoa, Orange Juice, Wheat, Corn and Soybean markets had a softer day and the Coffee and Sugar markets and with Sugar hitting five year lows, experienced a significantly softer days trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.05% higher; to see this Index registered at 431.60. The day starts with the U.S. Dollar marginally softer and trading at 1.554 to Sterling and 1.137 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 61.75 per barrel. The London market started the day yesterday on a steady note and followed by some further corrective buoyancy for the New York market, which seemingly inspired some buoyancy for the London market and with both markets entering the afternoon on a positive track, with seemingly support coming from consumer market industry buying. However as the afternoon progressed the New York market started to come under pressure and slipped back into positive territory, while the London market shed a little weight but retained its buoyancy for a little while. The New York market started to trigger sell stops and extended its losses, with the London market following suit and finally moving back to join New York in in negative territory. The London market continued to end the day on a very soft note and with 84.2% of the earlier losses of the day intact, while the New York market registered new one year lows and ended the day of a very soft note and with 84.5% of the earlier losses of the day intact. This soft close and with selling pressure dominated by the fund and speculative sectors of the market rather than the producers and with no indication as to when the oversold funds might show exhaustion does little to inspire confidence, but one might expect to see a degree of opportunist roaster price fixation buying support coming in to provide a degree of buoyancy for the light early trade today, against the soft prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1850 – 34 MAR 139.75 – 5.60 MAY 1886 – 32 MAY 143.45 – 5.45 JUL 1913 – 32 JUL 146.35 – 5.45 SEP 1937 – 31 SEP 149.10 – 5.40 NOV 1954 – 30 DEC 152.85 – 5.25 JAN 1968 – 29 MAR 155.95 – 4.90 MAR 1987 – 29 MAY 157.00 – 4.70 MAY 2007 – 32 JUL 157.25 – 4.70 JUL 2031 – 32 SEP 157.25 – 4.50 SEP 2043 – 32 DEC 157.30 – 4.45
Coffee Market Report February 25 2015 The internal market in Vietnam has yet to recover from last week’s Tet New Year holiday break, during which time the reference prices of the London robusta market impacted negatively upon internal market prices for the large stocks of new crop coffees. This has resulted in relatively strong internal market price resistance, which is dampening selling activity within the country and likewise in terms of their influence upon asking differentials for new business on the part of the exporters, in slow sales for the beginning of this week. The Brazil Coffee Industry Association has indicated that domestic coffee consumption dipped over the past year to 20.33 million bags, but that this year should see consumption recover to 21 million bags. The steady nature of this the second largest individual country coffee market following the U.S.A. seemingly indicates that the Brazil domestic coffee market that has been steadily growing over the past fifteen years, is now hitting maturity. Thus along with the growing market share of portion control single serve pods and capsules within the Brazil market, one would imagine that there is limited growth potential within this market over the coming years. Thus in terms of the market share that Brazil holds within the consumer markets that accounts for approximately 33 million bags per annum, one would foresee demand for Brazil coffees to be approximately 54 million bags per annum. This demand in terms of the previous 2014 crop of approximately 48 million bags and a follow on crop this year that many forecast to be around 49 million bags, shall potentially be supplemented by approximately 10 million to 11 million bags of carryover stocks of mostly arabica coffees, which were at hand at the start of the 2014 crop. However with these Brazil coffee stocks being steadily liquidated, the country heads towards a somewhat critical situation in terms of the follow on 2016 crop as by then the carryover stocks shall be potentially minimal and unless this crop proves to be a surplus one, Brazil coffee supply shall most certainly tighten for the 2016/2017 coffee year. Thus the new Brazil spring and summer rain season for the last quarter of this year and the first quarter of next year shall prove to be a matter of some considerable concern, as it has to be a good rain season if there is to be bumper new coffee crop in 2016. With world weather conditions these days very erratic, this new rain season is not guaranteed and there is a potential for much speculation and volatility for the presently bearish coffee markets, during the last quarter of this year. There are concerns in Brazil over the prevailing trucker’s strike that is demonstrating against what they see to be high fuel prices, which is disrupting deliveries of commodities to the port of Santos. This strike if it continues might cause some hiccups for coffee shipments for the short term, but it has not so far had a noticeable negative influence upon coffee shipments. While with the government in negotiations with the truckers, the strike is not having any real influence upon sentiment within the coffee markets. There is little in the way of fundamental news forthcoming from the main producer countries and producer blocs, with such news that is in play being generally positive for longer term coffee supply and adding little support for the markets. But there is in terms of consumer markets, many new developments within the dominant European market. Mondelez International have announced that Lavazza who had been negotiating a price to take over the L’Or and Grand Mere coffee brands, now have exclusivity to rather take over the more substantial Carte Noire coffee brand. The sale of the Carte Noire brand designed to satisfy the European Competitions Commission, in the bid for Mondelez International and D. E. Master Blenders 1753 to merge their dominant coffee companies. This merger is seen to be something of the threat to the dominant market share of Nestle, who presently dominate the rapidly growing single serve coffee market share in Europe. However it is not the only threat as the Nespresso patents have been overturned within many European countries and with the German courts this week in a case between the Ethical Coffee Company and Nespresso, having declared the Nespresso patent null and void. Thus further opening the European markets to a price war in terms of coffee capsule sales that are expected to register a further 15% growth in market share, during this year. The arbitrage between the markets has broadened yesterday to register this at 61.90 usc/Lb., while this equates to a relatively attractive 41.57% 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 3,671 bags yesterday, to register these stocks at 2,270,914 bags. There was meanwhile a larger in volume 4,242 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 35,288 bags. The commodity markets tended to steady yesterday and with the macro commodity index taking a sideways track for the day, following the soft start to the week. The Oil, Natural Gas, Sugar, Cocoa, New York arabica Coffee, Cotton, Copper, Wheat, Corn and Soybean markets had a day of buoyancy, while the London robusta Coffee, Orange Juice, Gold, Silver and Platinum markets had a softer days trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.01% lower; to see this Index registered at 431.39. The day starts with the U.S. Dollar marginally softer and trading at 1.547 to Sterling and 1.135 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 59.15 per barrel. The London started the day yesterday on a modestly softer note, while the New York market started to show some corrective buoyancy and with both markets taking this mixed track through into the afternoon’s continued thin and lacklustre trade. There was little change in direction through the day and the London market continued to shed more weight to end the day on a soft note and with 96.8% of the earlier losses of the day intact, while the New York market ended the day with buoyancy and with 44.8% of the earlier gains of the day intact. This mixed close provides little in the way of direction and one might expect a cautiously steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1884 – 31 MAR 144.35 + 0.90 MAY 1918 – 30 MAY 148.90 + 0.65 JUL 1945 – 29 JUL 151.80 + 0.70 SEP 1968 – 28 SEP 154.50 + 0.70 NOV 1984 – 28 DEC 158.10 + 0.65 JAN 1997 – 27 MAR 160.85 + 0.75 MAR 2016 – 28 MAY 161.70 + 0.75 MAY 2039 – 28 JUL 161.95 + 0.75 JUL 2063 – 27 SEP 161.75 + 1.00 SEP 2075 – 27 DEC 161.75 + 1.10
Coffee Market Report February 24 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 36.79% in the week of trade leading up to Tuesday 17th. February, to see this long position turned into a net long that was registered at 21,763 Lots, on the day. This speculative net long position within the London market which is the equivalent of a relatively modest 3,627,167 bags has most likely been reduced during the period of overall negative trade that has since followed. The Brazil weather factor has fallen for the present by the wayside, with fair to good rains having been reported for most of the main coffee districts within the country. While in the meantime the more volatile and active New York arabica coffee market is under pressure from the combination of a lack of positive fundamental news, the negative influences of a depressed macro commodity index, the negative nature of the charts and the threat of significant volumes of price fixation selling to come from the building stocks of unsold new crop coffee stocks in Central America. Thus with good volumes of consumer market coffee stocks at hand, these factors are presently countering the prospects for a deficit coffee supply due for this new coffee year. There is however no certainty over longer term weather prospects for Brazil and with the less threatening Brazil frost season aside, one has to look to the presently erratic and often unstable world weather conditions and in this aspect, the next spring and summer rain season in Brazil that shall determine the size of the follow on 2016 new crop. This crop with last years and this year’s deficit Brazil crops influencing a steady liquidation of the carryover coffee stocks that were inherited last year, shall dictate that the 2016 crop has to be a bumper one, if Brazil is not to experience tightening longer term supply. Thus the question is will the funds throw longer term uncertainty and caution to the wind and pressure the markets lower and to unprofitable levels for most producers to look to buy back profits from these fundamentally unrealistic lows, or shall they with the markets looking somewhat over sold soon step in to reverse the trend and profit from a higher value base. Presently though and with nothing in the way of supportive fundamental news coming forth from any of the main producer blocs and including Brazil market sentiment is very bearish, but it is often the case that when everyone is bearish there is an unexpected corrective move on the horizon and it is not impossible to soon see a turn within the New York market and one that would likewise inspire the London market into a higher trading range. The European Competitions Commission has agreed to extend the deadline on the review on the proposed merger between Mondelez International and D. E. Master Blenders 1753 from the 13th. May to the 1st. June and thus, provided more time for the companies to provide supporting input for the merger. This merger which most still believe shall take place, would result in significantly stronger competition for Nestle within the single serve coffee market. However it would seem that the initial proposal by Mondelez to sell off the smaller L’Or and Grand Mere brands to reduce dominance in mainly the French market has not been acceptable to the European antitrust regulators, which has now seen Mondelez suggest to sell off the larger Carte Noire brand. Thus adding to much speculation as to who it might be aside from Lavazza who have been in negotiations and attempting to raise cash to take over the L’Or and Grand Mere brands might be entering the field of play and have the financial resources in terms of the Carte Noire brand, to relieve the proposed merged company of its threat of dominance within some of the major European markets. The arbitrage between the markets has broadened on Friday to register this at 59.89 usc/Lb., while this equates to a relatively attractive 40.40% 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 6,779 bags yesterday, to register these stocks at 2,267,243 bags. There was meanwhile a larger in volume 8,973 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 39,530 bags. The Certified robusta coffee stocks held against the London exchange were seen to increase by 70,000 bags or 2.83% over the two weeks of trade leading up to Monday 16th. February, to see these stocks registered at 2,540,667 bags on the day. These stock unlikely to seem much growth on the short term, due to the relatively high asking differentials for new crop robusta coffee sales out of Vietnam, which continue to inflate their prices relative to the price dictates of the London market. The commodity markets took a soft track yesterday, with most markets contributing to the negative nature of the macro commodity index for the day. The Cocoa market nevertheless showed buoyancy, while the Cotton, Copper, Wheat, Corn, Soybean, Gold, Silver and Platinum markets had a softer day and the Oil, Natural Gas, Sugar, Coffee and Orange Juice markets had a significantly softer days trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.78% lower; to see this Index registered at 431.43. The day starts with the U.S. Dollar maintaining its muscle and trading at 1.543 to Sterling and 1.132 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 59.00 per barrel. The London started the day yesterday on a modestly softer note, while the New York market shrugged off a couple of early minutes of selling pressure, to show early buoyancy and with both markets taking this mixed track through into thin afternoon trade. As the afternoon progressed however and with trade remaining thin, the New York market with the negative influences of the soft macro commodity index playing its part started to lose its way, to dip back through par and join the London market in lacklustre negative territory and despite trading relatively thin trading volumes, to further extend the losses as the afternoon progressed. The London market continued to end the day on a soft note and with 72.2% of the earlier losses of the day intact, while the New York market hit new one year lows and ended the day on a very soft note and with 93% of the losses of the day intact. This soft close and with no supportive fundamental news coming to the markets does little to inspire confidence which 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. MAR 1915 – 27 MAR 144.45 – 4.20 MAY 1948 – 26 MAY 148.25 – 4.65 JUL 1974 – 27 JUL 151.10 – 4.65 SEP 1996 – 26 SEP 153.80 – 4.60 NOV 2012 – 23 DEC 157.45 – 4.55 JAN 2024 – 23 MAR 160.10 – 4.55 MAR 2044 – 19 MAY 160.95 – 4.55 MAY 2067 – 17 JUL 161.20 – 4.50 JUL 2090 – 15 SEP 160.75 – 4.55 SEP 2102 – 15 DEC 160.65 – 4.40
Coffee Market Report February 23 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 15.44% in the week of trade leading up to Tuesday 17th. February; to register a net long position of 14,080 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 9.79%, to register a net long on the day of 25,548 Lots. During this same week of trade the Non Commercial Speculative sector of the market decreased their net long position within the market by 17.12%, to register a net long of 8,847 lots on the day. This net long position that is the equivalent of 2,508,085 bags has most likely been further 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 big question has to be if the funds shall have the confidence to continue to follow the charts and further sell and liquidate their declining net longs within the New York arabica coffee market, or shall there be a degree of cautious corrective activity due for this week’s trade. This is very much unclear for the present as the logic of fundamental news does not always play its part and with the funds holding the financial muscle to make a market and profit out of the similarly dictated reversals, one can only take a wait and see stance towards the markets. The farmers and internal market traders within the Central American producers and with building levels of new crop coffee stocks at hand are apparently still in belief of the future support from a relatively modest new Brazil crop and continue to show varying levels of price resistance towards the dictates of the softer reference prices of the New York market, which continued to retard exporter selling aggression from the region last week. As is there is likewise a degree of internal market price resistance developing within Colombia, but not sufficient to stall the markets and there remains slow and steady consumer market fill in new industry business being concluded and with roaster buying coming in under the New York market to counter the negative track that the market took during the afternoons trade on Friday. The Vietnamese are starting to return to work today following a week of Tet New Year celebrations, but with little in the way of good news for the coffee sector of the country, as they see the results of last week’s softening of confidence in the coffee markets. While the Brazilians who had returned to work on Thursday post the annual Carnival celebrations, had already had to absorb the disappointing news of a softer post-holiday market. One would imagine that with the two largest producers who account for over 50% of world coffee production having returned to the field of play that this would be more negative than positive for trade, but with the Brazilians already well sold and the Vietnamese very experienced at playing the market, that this shall not be the case and that there shall not be any panic selling aggression due for the markets this week. The arbitrage between the markets has broadened on Friday to register this at 63.36 usc/Lb., while this equates to a relatively attractive 41.44% 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 11,757 bags on Friday, to register these stocks at 2,260,464 bags. There was meanwhile a larger in volume 12,623 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 48,503 bags. The commodity markets were mixed on Friday, but with the overall macro commodity index taking a softer track for the day. The Brent Oil, Natural Gas, Cocoa and New York arabica Coffee had a day of buoyancy, while the U.S. Oil, Sugar, London robusta Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, 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 0.42% lower; to see this Index registered at 434.81. The day starts with the U.S. Dollar maintaining its muscle and trading at 1.538 to Sterling and 1.138 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 60.55 per barrel. The London started the day on Friday under some modest negative pressure in thin trade, while the New York market attracted early support in likewise thin trade to post some modest buoyancy and with both markets taking this mixed track into the afternoon’s trade. The New York market did however come under some degree of negative pressure as the afternoon progressed to dip back and join the softer London market in negative territory but with the losses limited and bouts of corrective support dragging the market back towards par. The London market continued on its softer track to end the day on a soft note and with 88.9% of the earlier losses of the day intact, while the New York market managed to end the day on a hesitantly positive note, but with only 10.7% of the earlier in the day’s gains intact. This is a rather unconvincing close and one might think that it shall result in a cautious and hesitant slow start for early trade today for both markets, as players look to see where direction might be against the mixed close on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1942 – 15 MAR 148.65 – 0.55 MAY 1974 – 16 MAY 152.90 + 0.25 JUL 2001 – 17 JUL 155.75 + 0.30 SEP 2022 – 17 SEP 158.40 + 0.30 NOV 2035 – 18 DEC 162.00 + 0.30 JAN 2047 – 19 MAR 164.65 + 0.35 MAR 2063 – 19 MAY 165.50 + 0.40 MAY 2084 – 19 JUL 165.70 + 0.45 JUL 2105 – 19 SEP 165.30 + 0.35 SEP 2117 – 19 DEC 165.05 + 0.35
Coffee Market Report February 20 2015 The National Export Centre in Nicaragua have reported that the countries coffee exports for the month of January were 774 bags or 0.86% higher than the same month last year, at a total of 90,324 bags. This export performance has contributed to the countries cumulative exports for the first four months of the present October 2014 to September 2015 coffee year to be 79,423 bags or 42% higher than the same period in the previous coffee year, at a total of 268,534 bags. This latest report and with the new crop harvest close to completion was accompanied by a positive new crop forecast, which the National Export Centre foresees to be a 7% larger new crop, which they expect to total 1.61 million bags. This number is however somewhat conservative, as there are qualified trade and industry forecasts who have indicated a new crop for Nicaragua to be closer to 1.8 million bags. Specifics aside however, there is no doubt that the combined new crops from the producer bloc of Mexico and Central America shall this year be approximately 1 million bags larger than the previous crop, with much of these new crops still to be sold and to a degree, these potential sales are dampening speculative spirits for the related New York market against which they shall trigger price fixation hedge selling. Added to this rising new crop fine washed arabica coffee supply from Central is the rising coffee supply from neighbouring Colombia where in an interview yesterday, the National Coffee Federation of Colombia have forecasted that following the October 2013 to September 2014 coffee crop of 12,128,400 bags, the forecast that the coffee production for the present October 2014 to September 2015 coffee year shall rise to at least 12.5 million bags and possibly even exceed 13 million bags. This ongoing with positive output from Colombia is expected to be followed by a much improved new crop from Peru which starts being harvested in April, which many foresee shall increase by approximately 500,000 bags to total 3.9 million bags. The prospects of rising Central and South America coffee supply for the present coffee year has not however resulted in any degree of selling aggression from Central America and Colombia and rather with relatively strong internal market price resistance being shown to the negative dictates of the softening of the reference prices of the New York market, it is forcing exporters to have to continue to demand relatively positive and presently increasing asking differentials for new business. These differentials well above the value of tendering and delivering surplus coffees to the New York market and likewise values that do not inspire consumer market traders to carry high differential trade stocks, which sees the certified coffee stocks of the New York market remaining modest and little potential for short term growth of fine washed arabica coffee stocks within the consumer markets. The prominent coffee trade house ED&F Man and Volcafe coffee trade house forecasted that the new 2015 crop shall come in at 49.5 million bags and therefore 1 to 2 million bags higher than many other earlier forecasts and that despite this still relatively modest number, it shall contribute along with a 3.2 million bags larger end of this year new Vietnam crop of 30.6 million bags, to global coffee supply of 151.1 million bags for the next October 2015 to September 2016 coffee year. The report does however indicate that global coffee demand for the next coffee year shall be 152.5 million bags and that despite this improved supply, that the next coffee year shall nevertheless experience a 1.4 million bags deficit supply. Thus why the longer term coffee supply forecast might be seen to be neutral and perhaps even mildly supportive for the coffee markets, the shorter term assessment of the pending new crop in Brazil shall be much larger than many other forecasts have indicated, tended to be bearish for late in the day sentiment yesterday. The arbitrage between the markets has narrowed yesterday to register this at 62.39 usc/Lb., while this equates to a relatively attractive 40.87% 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 730 bags yesterday, to register these stocks at 2,248,707 bags. There was meanwhile a larger in volume 1,835 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 61,126 bags. The commodity markets were mixed yesterday, to see the overall macro commodity index taking a sideways track for the day. The Natural Gas, Cotton, Copper, Wheat, Soybean, Gold and Silver markets showed buoyancy for the day, while the Oil, Sugar, London robusta Coffee, Cocoa, Orange Juice, Corn and Platinum markets had a softer days trade and the New York arabica Coffee market took another sharp late in the day beating. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.02% lower; to see this Index registered at 436.63. The day starts with the U.S. Dollar maintain its muscle and trading at 1.542 to Sterling and 1.136 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at $ 60.05 per barrel. The London and New York markets both started the day yesterday with the London market steady and the New York market experiencing a degree of positive buoyancy, but while the New York market took a steady track into the afternoon’s trade, the London market had turned modestly softer. As the afternoon progressed however the New York market started to come under pressure and moved back to join the London market in negative territory and finally with sell stops being triggered along with some post-holiday catch up price fixation selling from Brazil, the New York market overtook the London market and moved significantly lower. The London market continued to end the day on a soft note and with 76% of the earlier losses of the day intact, while the New York market ended the day setting new one year lows and with 95.5% of the earlier losses of the day intact. This was a very dismal performance for the markets and especially so with the more volatile New York market ending at the lows of the day, but one might think that there shall be a degree of exhaustion in play and that this may inspire a steady rather than soft start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1957 – 18 MAR 149.20 – 3.60 MAY 1990 – 19 MAY 152.65 – 4.30 JUL 2018 – 18 JUL 155.45 – 4.25 SEP 2039 – 18 SEP 158.10 – 4.20 NOV 2053 – 20 DEC 161.70 – 4.15 JAN 2066 – 21 MAR 164.30 – 3.90 MAR 2082 – 21 MAY 165.10 – 3.90 MAY 2103 – 21 JUL 165.25 – 4.05 JUL 2124 – 21 SEP 164.95 – 4.25 SEP 2136 – 21 DEC 164.70 – 4.30
Coffee Market Report February 19 2015 The Ministry of Agriculture in El Salvador have reported that with the new crop harvest in progress the coffees produced so far are already 73,444 bags or 13.25% more than the previous full harvest, at a total of 627,747 bags. This is a rather exact figure in terms of calculating what might have been processed in a good number of mills and with the Ministry of Agriculture forecasting that by the end of the harvest the country shall produce 690,000 bags as against most internal private trade and industry forecasts for something in the order of 900,000 bags, one might presume that the new crop harvest so far, shall have exceeded this relatively conservative figure that the ministry has reported. The Brazil carnival is over and has been a relatively wet one for the south east of Brazil, but not sufficient to dampen celebratory spirits and the coffee industry players shall return to their offices today to view the negative track that the coffee markets have taken this week. The rains have meanwhile been beneficial for the prospects for the developing new crop, but shall not change the scenario that this new crop shall be another relatively modest one and bring forth a potential 5 million to 6 million bags deficit crop. Fortunately a situation that shall be adequately covered by the prospects for carryover stocks of a similar number, which shall assist Brazil to maintain a steady supply to the consumer markets through to next year’s new crop. The concern is though and with the issues of the June and July frost season aside and now largely ignored since the last frost was twenty one years ago, is what shall be the prospects for the next 2016 Brazil crop. If one is to presume that this year shall see normal weather conditions and with the spring and summer rain season coming into play in late September and to carry on through for the following six to seven months, one might expect a good recovery and a surplus new crop. However should there be any hiccups for this rain season and with reserve stocks much depleted and due to be liquidated my mid next year, one might expect to see a sharp speculative positive rally for the coffee markets and the threat of this one would think shall prove to be a limiting factor for the bears who presently dominate direction within the volatile New York market. This brings to question where the bottom of the present sell off shall be, as while the charts and the technical trade are directing the market lower, there has to be some degree of fundamental reason to be cautious about selling too short into the coffee markets ahead of a not impossible to encounter frost season and an uncertain in terms of the present erratic world weather conditions, new rain season. Thus one might think that the negative charts aside, there is the possibility for the more cautious of the speculative short sold funds and traders to soon look to rising levels of the somewhat retarded new crop price fixation selling activity due from the larger new crop Central American producers, to buy into the New York and take some profits out of the recent liquidation. This would make one think that the further downside of the market might be limited and that the New York market that hit one year lows yesterday, might well be close to its bottom. The Coffee Board in the Philippines along with the Agricultural Ministry are looking to ways to inspire a recovery for the countries coffee production, which has fallen do relatively dismal levels for this once coffee exporter, that now imports 80% of its rising domestic market coffee requirements. There have for many years been a good number of both state and private roasting industry support programs looking to promote coffee farming within this country that has the natural conditions conducive to large scale coffee farming, but so far these have not had any market effect. There is however some more aggression on the part of the authorities in the Philippines developing and with not only farm support that agronomy extension services being provided for the farmers, but also some special low interest finance being provided. Thus with the example of the successes of neighbouring Vietnam who are a leading supplier to the Philippine roasting companies, one would think that there is a good chance for the country to finally start on its track to one again become a significant coffee producer, albeit that it is most probably going to be more than a decade before the country might once again be a coffee exporter. The arbitrage between the markets has narrowed yesterday to register this at 65.82 usc/Lb., while this equates to a relatively attractive 41.94% 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 25 bags yesterday, to register these stocks at 2,247,952 bags. There was meanwhile a larger in volume 2,966 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,291 bags. The commodity markets were generally soft yesterday, with U.S. dollar showing some buoyancy and the macro commodity index tending softer for the day. The Natural Gas, Cocoa, Cotton and Copper markets had a day of buoyancy, while the Oil, Sugar, Coffee, Orange Juice, Wheat, Corn, Soybean, 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 0.46% lower; to see this Index registered at 436.71. The day starts with the U.S. Dollar marginally easier and trading at 1.545 to Sterling and 1.141 to the Euro, while North Sea Oil is tending softer in early trade and is selling at $ 58.55 per barrel. The London and New York markets both started the day yesterday showing buoyancy and entered the afternoon on a positive track, but as the afternoon progressed the New York market started to come under renewed selling pressure and with the London market following suit, to see both markets once more in negative territory. This was followed by a brief period of recovery for the New York market and followed by the London market but it was short lived and both markets moved back into negative territory and with relatively large volumes of trade, accompanying the selling activity. The London market did however limit its losses and ended the day on a soft note but having recovered 73.8% of the earlier losses of the day, while the New York market ended the day on a soft note and with 73.1% of the earlier losses of the day intact. This soft close does little to inspire confidence, but perhaps with thoughts of the possibility of a nearby correction on the horizon, there might be some buoyancy due for early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAR 1975 – 18 MAR 152.80 – 2.85 MAY 2009 – 11 MAY 156.95 – 1.90 JUL 2036 – 7 JUL 159.70 – 1.85 SEP 2057 – 7 SEP 162.30 – 1.80 NOV 2073 – 5 DEC 165.85 – 1.70 JAN 2087 – 2 MAR 168.20 – 1.50 MAR 2103 – 2 MAY 169.00 – 1.35 MAY 2124 – 2 JUL 169.30 – 1.35 JUL 2145 – 2 SEP 169.20 – 1.50 SEP 2157 – 2 DEC 169.00 – 1.65
Coffee Market Report February 18 2015 The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 216,964 bags or 3.93% during the month of January, to register these stocks at 5,308,000 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 6,308,000 bags, it would have equated to at least a very safe 12.9 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. The dip in these stocks during the month of January in North America which are stocks that are nevertheless higher than at the same time last year are no reflection of any shortage of coffee supply, but rather are related to the prevailing price resistance that is being shown within most producer countries, which is inflating export differentials and is retarding the growth of the relatively expensive trade stocks. This is likewise transferring to a degree the weight of new crop stock holdings to the producer markets rather than the consumer markets and thus, is retarding the delivery of new crop coffees into consumer market trade stocks and the certified stocks of the New York and London markets. But there is no doubt in the meantime, that there is more than sufficient short to medium term coffee supply on the horizon, for the consumer market industries. Meanwhile in terms of consumer market demand the combined West and East European market consumption that accounts for close to 50% of world consumer market demand is looking flat to marginally negative, with the surging growth of the more parsimonious single serve pod and capsule sector of the market impacting upon consumption per cup, while the economic issues within the Mediterranean Rim countries and Eastern Europe are also having some impact upon consumption. This is apparently not the case within the North American markets that account for approximately 26% of consumer market demand, where consumption growth is steady to buoyant and the economic circumstances unlike in Europe are more positive for consumption growth. But alike the leading European market this market is well developed and somewhat saturated and therefore, limits the growth potential for the market. There is however a steady growth in consumption within the Asian markets and including the Asian producer countries, which is perhaps at a guess adding approximately 2 million to 2.5 million bags in consumption per annum, but this is perhaps partially countered by the dip in overall European market volume rather than cup demand. Thus while the deficit Brazil crop factor last year and potentially so again for this year is having some negative effect upon longer term world coffee stocks, they remain more than sufficient to satisfy demand through to mid next year and the next 2016 Brazil crop. This follow on crop becoming the critical factor and the big question, which shall inspire a keen eye being kept upon the weather conditions in Brazil for the last quarter of this year, that shall dictate the countries next crop potential. The arbitrage between the markets has narrowed yesterday to register this at 67.22 usc/Lb., while this equates to a relatively attractive 42.32% 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 9,097 bags yesterday, to register these stocks at 2,247,977 bags. There was meanwhile a similar in volume 9,051 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 62,257 bags. The commodity markets were mixed yesterday, but with t 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 admin2015-03-02 12:03:002015-03-02 12:03:00Coffee Market Report |
