Coffee Market Report
| The markets remain devoid of striking fundamental news and for the present the general perspective is that no news is good news in terms of coffee supply and by nature, negative news in terms of terminal market prices. This however was not the case in trade yesterday, as the speculative sector of the more volatile New York market and lacking any significant volumes of producer price fixation selling over the markets took an upside swing yesterday and with buy stops being triggered, fuelled a relatively sharp recovery for the market. This was a recovery which likewise inspired a positive move within the London market, which started to attract producer price fixation selling on the way up and to slow the pace of the rally.
The National Cocoa and Coffee Board of the Cameroon has reported that the countries robusta coffee shipments for the month of May were 5,350 bags or 11.89% lower than the same month last year, at a total of 39,650 bags. This however follows some more substantial volumes of robusta coffee exports in the previous months and the countries cumulative robusta coffee exports for the first six months of their December 2014 to November 2015 robusta coffee year are 75,333 bags or 55.89% higher than the same period in the previous robusta coffee year, at a total of 210,117 bags. The National Cocoa and Coffee Board of the Cameroon have also reported that the countries arabica coffee exports for the month of May were 6,483 bags or 82.77% lower than the same month last year, at a total of only 1,350 bags. This results in the countries arabica coffee exports for the first eight months of their present arabica coffee year that runs from October 2014 to September 2015 to total 17,433 bags, which is a figure that is perhaps on track for the targeted arabica coffee exports for the coffee year of approximately 35,000 bags. While little is mentioned these days about the problems of Roya or Leaf Rust in Central America and Mexico, there are many programs continuing within this large fine washed arabica producer bloc and with the combination of both domestic and international finance coming to the fore, to assist farmers in their bid to supress the negative effects of this virulent fungus. These programs which provide both chemical controls for the farmers and assist farmers in replanting programs with new disease resistant and higher yielding trees are working and all indications are that they are working well, with Mexico and Central America forecasting in excess of an 8% larger overall new crop for the coming October 2015 to March 2016 harvest and combined production in excess of 18.5 million bags. The arbitrage between the markets has broadened yesterday to register this at 52.64 usc/Lb., while this equates to a still attractive to roasters 38.96% price discount for the London robusta coffee market. This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparatively firm arabica coffee prices. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,007 bags yesterday; to register these stocks at 2,138,699 bags. There was meanwhile a similar in volume 5,108 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 44,515 bags. The commodity markets had another mixed day yesterday but with sufficient buoyancy within selected markets, to assist the overall macro commodity index to show a degree of buoyancy. The Natural Gas, Sugar, Cocoa, Coffee, Copper, Wheat, Corn, Soybean, Silver and Platinum markets had a day of buoyancy and the Cotton market was steady, while the Oil, Orange Juice and Gold markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.29% higher to see this Index registered at 422.44. The day starts with the U.S. Dollar steady and selling at 1.569 to Sterling and 1.121 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.95 per barrel. The London market started the day yesterday on a steady note, while the New York market started the day with early buoyancy and was soon joined by the London market in positive territory and with both markets taking a slow and thinly traded positive track, into the afternoon’s trade. As the afternoon progressed the more volatile New York market started to attract speculative short covering and some consumer industry stop loss fixation buy stops to increase the gains and with the London market following suit, to see both market triggering additional buy stops to accelerate the gains. The markets continued on this steady upside track for most of the day but encountering late in the day speculative profit taking and producer price fixation selling, which set something of a ceiling to the markets. The London market continued to end the day on a positive note and with 90% of the gains of the day intact, while the New York market likewise ended the day on a positive note and with 87.1% of the earlier gains of the day intact. This overall positive close for the markets is somewhat supportive fort the charts and sentiment within the markets, but would require some strong follow through support to continue the trend and one might think that with a lack of fundamental news to support the markets that they might encounter some degree of hesitancy and only 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 1907 + 81 JUL 133.30 + 5.60 |
