Coffee Market Report
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Coffee Market Report June 10 2015 10th June, 2015. This crop estimate may be considered to be somewhat conservative with particular reference to the Brazil conillon robusta coffee figure, which across a median of ten trade and industry forecasts is put at an average of 13.83 million bags and even this, including a very low estimate of 10.70 million bags and the high at 17.70 million bags for this forthcoming new 2015 crop. There is a general acceptance meanwhile that the key robusta growing area in Espirito Santo had suffered from dry weather during crop development, the severity of the potential losses are still to be determined while the crop is being harvested and most analysts remain at the higher end of estimates; of between 14 to 16 million bags. Thus if one is to say work on 15 million bags as an estimate for conillon robusta coffees in 2015, it would inflate the CONAB over all crop production figure closer to 47.91 million bags. Indications are meanwhile, that there is conillon robusta carryover stock, to cater to the main Brazil domestic consumer market for their favoured coffee, as well as respectable stocks being held in consumer market warehouses; with the new crop harvest now coming to the fore the medium term outlook may be anticipated to remain steady. The Association of Coffee Exporters in Brazil have revised their April 2015 export figure to a total of 2.87 million bags, and announced their more detailed May export figures. In this respect, green coffee exports for the month were registered at a total 2.50 million bags green coffee with 2.09 million bags arabica and 404,561 bags conillon robusta, in addition to the 286,894 bags of soluble in equivalent green coffee. This would result in a combination of green coffee and value added soluble exports for the month being 240,000 bags below that on the same month last year and a total of 2.78 million bags. The National Coffee Association in Guatemala have reported that the country’s coffee exports for the month of May to have reached a total 392,814 bags. This figure and following a slow start to their coffee year so far, contributes to the cumulative coffee exports for the first eight months of the present October 2014 to September 2015 coffee year being 267,799 bags or 13.04% lower than the same period in the previous coffee year, at a total of 1,785,072 bags. The arbitrage between the markets has narrowed yesterday to register this at 58.70 usc/Lb., while this equates to an attractive 42.73% price discount for the London robusta coffee market. This arbitrage continues to inspire 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 reported a decrease of 9,754 bags yesterday; to register these stocks at 2,122,965 bags. There was an increase of 7,615 bags to the number of bags pending grading for this exchange; to register these stocks at 58,584 bags. It was a mixed day on the commodity markets yesterday, the Oil markets boosted by the anticipation of lower inventory data to come from the USA., in Europe the meetings being held in Brussels and talks surrounding the Greek fiscal crisis took centre stage, while the US Dollar posted a softer day. It was a positive day for the Oil markets, Cotton, Copper, Orange Juice, Corn, Wheat, Soybean, Coffee markets and Gold, Silver, Platinum on the day. It was a mildy lower day for Cocoa, Sugar and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.77% higher to see this Index registered at 429.32. The day starts with the U.S. Dollar trading at 1.542 to Sterling and 1.13 to the Euro, the Brazil Real at 3.097 and North Sea Oil is firm in early trade, selling at 64.43 per barrel. The coffee markets started the day yesterday on steady to slightly softer note with fair opening volume in New York and light volume in London. The morning session followed on this trend with New York leading from the front and downward pressure in the morning dipped this market to the lows, met with underlying buyer support to quickly lift this market back to modestly negative levels, where at this point 43.77% of the trade volume of the day had triggered. The afternoon session brought addition support with first notice day approaching for the prompt month on 22nd June, spread activity to provide some buoyancy to see this market finish the day in positive territory after a heavy volume day. It was a much more sedate day for London, which remained range bound for much of the session. This market managed to gather enough momentum in the late afternoon, to break out and into the positive when a degree of the buoyant sentiment in New York, appeared to spill over to this more reluctant hand to mouth market, although with light origin sellers waiting at the top. While New York continued to build on the gains to the latter end of the day, London shed its gains and in a good volume day, the markets finished near to the days’ highs in New York and in positive territory closer to the middle of the days’ range in London, to set the close yesterday as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1734 + 10 JUL 137.35 + 0.80
Coffee Market Report June 08 2015 8th June, 2015. The latest Commitment of Traders report from the New York arabica coffee market has seen the Non-commercial Speculative sector of this market decrease their net short sold position within the market by 12.61% in the week of trade leading up to Tuesday 2nd June; to register a net short sold position of 18,899 Lots. This net short sold position which is the equivalent of 5,357,782 bags has most likely been additionally trimmed over the period of mostly positive trade last week. The Colombian Coffee Growers Federation has reported that the country’s coffee production for the month of May was 115,000 bags or 11% higher than the same month in the previous year, at a total of 1,165,000 bags. This higher performance follows many months of rising production levels and the cumulative production for the first eight months of the present October 2014 to September 2015 coffee year is now 427,000 bags higher than the same period in the previous coffee year, at a total of 8,308,000 bags. In a similar thread, the fine washed arabica coffee exports from Colombia have increased and the Coffee Growers Federation has reported that coffee exports for the month of May were 170,000 bags or 17% higher than the same month last year, at a total of 1,006,000 bags. This improved performance has contributed to the countries cumulative exports for the first eight months of the present coffee year to be 369,000 bags higher than the same period in the previous coffee year, at a total of 7,891,000 bags. While there have been some reports from the interior regarding difficulties in acquiring labour for the harvest of the midyear crop that is currently underway, all indications are now that with the Mitaca crop harvest underway, Colombia is on track for the present coffee year towards production of close to 13 million bags. The well respected Brazil analyst Safras e Mercado that have placed their new Brazil crop forecast at 50.4 million bags, have reported that they foresee this current crop to be approximately 20% harvested, in line with the average rate of harvest over the past five years. This despite the reports of some light wet weather in the region of Minas Gerais and Sao Paulo, that is likely a minor setback in pockets of this vast area, whereas the more north and eastern Conillon robusta areas harvest is closer to completion, for the natural arabica coffee crop that is estimated by Safras e Mercado to be 36.1 million bags this coming July 2015 to June 2016 coffee year, it is thus far all progressing well. The Brazil Real meanwhile, is steady to the US Dollar and trading at 3.143 to the US Dollar this morning. The arbitrage between the markets has narrowed yesterday to register this at 56.72 usc/Lb., while this equates to a still attractive 41.98% price discount for the London robusta coffee market. This arbitrage continues to inspire 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 reported an increase of 3,058 bags yesterday; to register these stocks at 2,128,338 bags. There was a decrease of 3,829 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 58,786 bags. It was a mixed day for the commodity markets on Friday, the latest payroll data from leading U.S.A., released for the month of May, received as an improvement on market expectations and provide a boost for the US Dollar against other major currencies on the day. It was a relatively steady day for the Oil markets which finished in positive territory together with Copper, Orange Juice. It was an overall lower day for Grains, Corn, Wheat and Soybean futures fell, as was it a softer day for Cocoa, Sugar, Coffee, Gold, Silver, Platinum and Palladium on Friday. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% lower to see this Index registered at 422.07. The day starts with the U.S. Dollar trading at 1.529 to Sterling and 1.11 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 61.37 per barrel. The coffee markets started the day on a modestly softer note on Friday, in light volume and both markets in negative territory and range bound for much of the morning, with both markets maintaining their softer stance into the afternoon. The New York arabica market attracted additional speculative buying support as the afternoon progressed to see this market recover all of the days’ losses and claw back into positive territory briefly, with London following suit although producer activity weighed in to the very limited in volume day for this market, to cap the later session gains and fail to break through to positive territory. The latter day developments and a firmer US Dollar generally weighed in on the New York arabica market where volumes improved toward the latter half of the session and pushed this market back into negative territory, activity picked up pace to register heavy volume at the close albeit within a narrow range of 3.50 usc/Lb., from low to high on the prompt month and a finish near to the middle of the days’ trading range. It was a much more subdued session in London where this market posted a negative close but having recovered most of the losses sustained during the session, to set the close in both markets on Friday, as follows; LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1728 – 8 JUL 135.10 – 0.60
Coffee Market Report June 07 2015 5th June, 2015. Yesterday was the Corpus Christi holiday for Brazil and some other Latin American countries, as it is for some of the countries in Western Europe, which is likely to slow physical trade and with many taking Friday off to bridge the holiday into a long weekend, for the last couple of days of this week. Thus while the countries that host the international markets are still working, one might expect to see relatively lacklustre trade for today and tomorrow. It is anyhow the start of the summer holiday season for the main northern hemisphere markets and a period within which physical coffee trade tends to slow and unforeseen weather issues aside to spike up speculative and industry cover interest, one can expect to now see two months of relatively slow trade. The arbitrage between the markets has narrowed yesterday to register this at 56.95 usc/Lb., while this equates to a still attractive 41.97% price discount for the London robusta coffee market. This arbitrage continues to inspire 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 reported an increase of 4,231 bags yesterday; to register these stocks at 2,125,280 bags. There was a decrease of 5,234 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 62,615 bags. The commodity markets were mixed yesterday, many posting a softer day with the Oil markets pushed lower early in the day, as speculation surrounding the chances for an interest rate within the largest, US economy took centre stage. The markets wait for the latest round of jobs numbers data to be released on Friday and a steady day for the US Dollar. It was a positive day for Grain markets, Corn, Wheat, Soybean, Orange Juice, Coffee, Sugar and Cotton finished higher. The Oil markets finished on a softer note, as was it a softer day for Copper, Cocoa, Gold, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.20% lower to see this Index registered at 422.70. The day starts with the U.S. Dollar trading at 1.531 to Sterling and 1.126 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 59.93 per barrel. The London and New York markets both started the day yesterday with some buoyancy but taking a softer track for the morning session. The arrival of the America’s however leant some short cover support and with the increase in volume of trade in the afternoon, the markets registered a recovery back to positive territory, where both markets tread for the ensuing few hours and with a narrow trading band set, the latter day volumes picked up pace, with sellers moving back in to cap the days’ gains in both markets, and see the close for London robusta and New York arabica, in positive territory near to the middle of the days’ range in both markets, while the Brazil Real maintained a steady 3.14 to the US Dollar for the Corpus Christi holiday in this largest producer market, to set the close yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1736 + 13 JUL 135.70 + 1.40
Coffee Market Report June 05 2015 5th June, 2015. Ahead of the new Arabica crop which is picking up pace and the Conilon robusta harvest that begins earlier and is estimated to be around 70% complete in Brazil, there has been some positive news for Brazilian coffee producers. In a supportive move for their main agricultural commodities, the ministry of Agriculture in Brazil have confirmed their farm budget for the 2015 to 2016 crop year to be 187.7 billion reais, or 59 billion US Dollars, which is an increase of 20% on that of last year’s budget for allocation to their agricultural sector highlighting the importance of agriculture within their overall fiscal policy, where other sectors are have not benefited in the same manner in line with the prevalent government policy to cut back on expenditure. The additional funding is hoped to maintain and encourage producers in this country, which is already the top world producer of sugar, coffee and beef and second to America in soybean production, to expand area planted and will assist to provide subsidized credit to farmers, as well as continued support for development projects to boost their already bustling agriculture sector. Within this fund, Brazil has allocated 8% more resources this year to the coffee sector, through the coffee development fund, known as Funcafe. This will make 4.136 billion reais or 1.3 billion US Dollars available in credit to assist with financing production, processing, storage and sale of the coffee crop this coming crop year. Although much of the support will be in the form of subsidized credit for which the interest rate has increased this year against last, at 7.75% for medium sized farmers and 8.75% percent for large agribusiness, this is still more supportive than the current central bank lending rate at 13.25% and will be welcome news to producers, who are preparing for peak harvest set to start in earnest in the next month. The weather in Brazil has been mild thus far, the prospective fears of cooler winter weather and talk of frost possibilities now very firmly a thing of the past. Apart from the generally accepted global warming phenomenon, coffee has for the most part been moved out of the traditionally colder frost susceptible growing areas. There have been some reports of unseasonal light rain in the main arabica regions and as late as this week, which could contribute toward a delayed ripening in some small pockets of this vast growing area, but finally any slower ripening may be conducive to quality and alleviate some early harvest pressure, thus is no real concern. It is meanwhile, a long weekend holiday in Brazil starting today and for tomorrow, the Brazil Real is trading at 3.133 to the US Dollar this morning, only limited commercial activity may be foreseen in Brazil to the end of this week. The arbitrage between the markets has narrowed yesterday to register this at 56.15 usc/Lb., while this equates to a still attractive 41.81% price discount for the London robusta coffee market. This arbitrage continues to inspire 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 reported an increase of 1,388 bags yesterday; to register these stocks at 2,121,049 bags. There was a decrease of 6,249 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 67,849 bags. The commodity markets were mixed yesterday, with the leading in influence Oil markets tending softer at the outset and additional pressure through the day weighed a weaker US Dollar. It was a lower day for Oil, Wheat, Soybean, Corn, Sugar, Copper, Gold, Silver, Platinum and Palladium. It was however, a better day for Cotton, Cocoa, arabica Coffee and Orange Juice. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.70% lower to see this Index registered at 423.53. The day starts with the U.S. Dollar trading at 1.531 to Sterling and 1.126 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 62.21 per barrel. The coffee markets opened the day on a mildly positive note, the start in New York assisted to guide London which was otherwise listless and lacking in directional inspiration. The morning session turned buoyant for New York which continued to build upon the gains to the afternoon in this market and the speculative sector were again seen to be active in covering shorts. The fortunes of the US Dollar weighed in on the market later on in the session and this had some influence on the softer turn for the afternoon. With improved volume in the afternoon the sellers returned to the market and New York shed earlier gains on the day, back to negative territory but was short lived as buyer support returned to the floor and gradually this market regained ground to settle just off of the days’ highs. The London robusta market was muted in comparison, although volume was fair trade remained within a narrow range and following New York, positive in the morning but turning negative toward the end of the day, the mood improved toward the very end of the day in this market to see the London Robusta market finish the day unchanged and after a choppy but buoyant session in New York, to set the close yesterday as follows; LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1723 Unch JUL 134.30 + 1.60
Coffee Market Report June 03 2015 3rd June, 2015. It is early in the month for Vietnam robusta coffee exports to be forecast for the month of June, however the early trade estimates are for exports Vietnam mostly robusta coffee to be anywhere between 1.17 million to 2 million bags this month. The vast difference in opinion in the quantity of export potential for June stems from the general opinion that there are still sizeable stocks of robusta coffees being held unsold from the last October 2014, to January 2015 harvest and these stocks still have to come to the market. The prevailing internal market price resistance within Vietnam however is presently inflating export differentials for robusta coffees, relative to the London robusta coffee market which in turn is providing at these lower London robusta market levels, little incentive for the farmers and internal traders to start to liquidate stocks, while consumer market industry buyers are restrained heading into the warmer summer and traditionally lower consumption months in the northern hemisphere. The well respected United States Department of Agriculture Foreign Agricultural Service has come forth with their latest forecast for the new April 2015 to March 2016 arabica coffee crop and production in Peru to be 4.2 million bags and a potential increase of 4% on that of the previous year. Alike Central America, as a combined washed Arabica producer bloc, Peru similarly suffered from an expansive and destructive roya or leaf rust outbreak two years ago which had a marked effect on the overall coffee production in 2014 but is anticipated to register a recovery year on year, with climatic anomalies aside, has a potential to return back to production levels of 4 million bags and over, as was achieved prior to the leaf rust outbreak. The recent bout of new Brazil crop forecasts has seen the addition of the Neumann Kaffee Gruppe estimates for the new crop, which is added to the Reuters list of international trade house and Brazilian local forecasters, with their estimate to be around the middle of the comparative estimates, which for the current year July 2014 to June 2015 is pegged at 49.30 million bags. The forecast for the approaching July 2015 to June 2016 crop year which would aside from the recovery of the drought exposure last year, be a cyclically lower biennial production year, is similarly within the median range of forecasts at 47.30 million bags. The arbitrage between the markets has narrowed yesterday to register this at 54.54 usc/Lb., while this equates to a still attractive 41.10% price discount for the London robusta coffee market. This arbitrage continues to inspire 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 reported a decrease of 20,531 bags yesterday; to register these stocks at 2,119,661 bags. There was an increase of 13,579 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 74,098 bags. The commodity markets gained some degree of support from the weaker U.S. Dollar yesterday, while the Euro had a boost in confidence with the indications that Greece is closer to a deal with its creditors. It was a positive day for much of the commodities board, apart from Palladium which had a mildly lower finish and Orange Juice which registered a negative day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.76% higher to see this Index registered at 426.52. The day starts with the U.S. Dollar trading at 1.534 to Sterling and 1.143 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 62.85 per barrel. It was a buoyant day for the coffee markets yesterday, albeit that both London and New York markets started the day on a steady to softer note. Once the initial lows were tested in New York however, this market soon started to attract speculative buying support in a continuation of the recent run of short covering by this sector of the market, triggering stops along the way and both markets headed into the afternoon on a positive note. The early gains in New York settled into a new trading range for the afternoon within a more restrained band as the speculative shorts continued to play an active role and light origin selling activity returning at the top of the days’ gains. This was similarly a trend in the London Robusta market which continued on a positive track to end the day near to the day highs in this market. The support built within the market in New York however did not hold all the way to the end of the session and this market shed some of the latter day gains to set the close nevertheless in positive territory and the close in both markets yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1723 + 24 JUL 132.70 + 2.90
Coffee Market Report June 02 2015 2nd June, 2015. The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market reduce their net long position within the market by 42.53% over the week of trade leading up to Tuesday 26th May; to register a net long of 8,082 Lots on the day. This net long that is the equivalent of 1,347,000 bags has most likely remained been extended over the period of overall buoyant trade, which has since followed. The International Coffee Organisation has reported that global coffee exports for the month of April were 920,000 bags or 9.75% lower than the same month last year, at a total of 9.43 million bags. This contributing to the cumulative global coffee exports for the first seven months of the present October 2014 to September 2015 coffee year to be 3.8% lower than the same period in the previous coffee year, at a total of 62.51 million bags. The National Coffee Institute in Costa Rica has reported that the country’s coffee exports for the month of May were 27,873 bags or 15.73% lower than the same month last year, at a total of 149,297 bags. The cumulative coffee exports for the first eight months of the present coffee year are 85,175 bags or 9.68% below the same period in the previous coffee year, at a total of 794,020 bags. The National Coffee Institute of Honduras has reported that the country’s coffee exports for the month of May were 225,525 bags or 35.88% higher than the same month last year, at a total of 854,052 bags. This improved performance follows improved performances since the start of this new coffee year and the cumulative coffee exports for the country for the first eight months of the present October 2014 to September 2015 coffee year are 1,128,110 bags or 36.25% higher than the same period in the previous coffee year, at a total of 4,239,759 bags. The preliminary May coffee exports from Brazil have been reported to have been 62,094 bags or 2.36% lower than the same month last year, at a total of 2,630,419 bags. The Brazil Real has meanwhile slipped back in value to above 3.10 Reais to the U.S. Dollar, but the weaker currency has had a significant influence upon the internal market selling activity and for the present, there remains a degree of price resistance on the part of the farmers of their now much depleted stock coffees. One might anticipate that Brazil sales and exports may continue at a sluggish pace for the next couple of months and until such time as the new crop arabica coffees start to impact upon the market, in increased volume. The arbitrage between the markets has narrowed yesterday to register this at 52.73 usc/Lb., while this equates to a still attractive 40.62% price discount for the London robusta coffee market. This arbitrage continues 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 831 bags yesterday; to register these stocks at 2,140,192 bags. Similarly, there was a 6,075 bag decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 60,519 bags. The commodity markets registered a buoyant morning session yesterday, as the latest round of U.S. economic data in manufacturing was positively received by the markets, while the U.S. Dollar regained some muscle through the day to dampen the gains, a mixed close for commodities on the day. The Oil markets lost ground, and similarly a lower day for Cocoa, Cotton, Copper, Gold held steady, although a softer day for Silver, Platinum and Palladium. It was a more positive day for Sugar, Orange Juice, Wheat Corn and Coffee. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.52% higher to see this Index registered at 423.29. The day starts with the U.S. Dollar trading at 1.522 to Sterling and 1.095 to the Euro, while North Sea Oil is tending steady in early trade and is selling at 63.56 per barrel. The coffee markets started the day on a positive note from the outset, spurred on by the positive sentiment within commodities and within coffee, the latest commitment of traders’ publication for the New York arabica market and the speculative short sold position at 21,626 lots for the week leading up to Tuesday 26th, last week. It was a positive reaction in both London and New York which gapped higher into a void of seller activity as speculative shorts took some cover. The markets settled into the new higher trading range once the initial flurry flattened out as the more attractive levels brought origin and speculative sellers back to the floor, and the day progressed at a measured pace, in a positive range for both markets for the day. The latter day session saw both markets shed some of the gains during the day, with the advent of a firmer U.S. Dollar and in combination with a weaker Brazil Real to weigh in on both markets which finished the day in a positive range, but off of the days’ highs, to set the close yesterday after a fair trade volume day and on a buoyant note, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1699 + 67 JUL 129.80 + 3.65
Coffee Market Report June 01 2015 1st June, 2015. With the month of May passed the latest coffee export statistics are being published, starting with the Indonesian Government trade authorities within Indonesia’s main robusta producing island of Sumatra, who have revised upward previous February and April months of exports and reported an increase in May coffee exports against the same time last year. The worlds’ third largest Robusta producer revised February exports to 316,650 bags, an increase of 43 percent on the same month last year, and Sumatra robusta coffee exports in April, to have reached a total of 383,210 bags and 122.83% increase on that of the same month last year. The Indonesian Government trade authorities have since reported that the islands robusta coffee exports for the month of May were 60,352 bags or 33.16% higher than the same month last year, at 242,330 bags. This improved performance that rising robusta export volumes for the previous four months does not however in terms of the present coffee year, counter the relatively modest export volumes of the last quarter of last year. Therefore the cumulative robusta coffee exports from Sumatra for the first eight months of the present October 2014 to September 2015 coffee year are 333,389 bags or 11.15% lower than the same period in the previous coffee year, at a total of 2,657,279 bags. All indications are however that with Sumatra forecasting a much improved 20% to perhaps even 25% larger new robusta crop now starting to be harvested, that export volumes shall steadily increase in the coming months. While domestic consumption continues to expand, the larger overall crop forecast for the harvest that has begun is seen to be more than adequate to facilitate local and export demand and that by the third quarter of this year see Sumatran robusta coffee exports may start to catch up and even overtake the cumulative coffee year volumes of the previous coffee year. Albeit that with the prevailing soft nature of the reference prices of the London robusta coffee market, there can be expected to be some degree of internal market price resistance that might retard the volumes of new crop export sales. The arbitrage between the markets has narrowed yesterday to register this at 53.62 usc/Lb., while this equates to an attractive 41.69% price discount for the London robusta coffee market. This arbitrage continues 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 16,978 bags yesterday; to register these stocks at 2,139,361 bags. There was a 12,483 bag increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 66,594 bags. The Certified robusta coffee stocks held against the London market were seen to increase by 40,333 bags or 1.35% over the two weeks of trade, leading up to Monday 25th May; to register these stocks at 3,008,666 bags on the day. The increase is partially attributed to the lifting of suspension of some coffees being held in London, to contribute toward the overall increased accepted certified robusta stocks being held against the London market. This is a sharp rise from a year ago when the stocks were almost completely depleted and they have reached a level last seen in early 2012, but they are still well down from their levels between 2008 and their peak in 2011. The commodity markets registered an overall more positive sentiment on Friday, the influential Oil markets took a more positive turn as the latest round of U.S. Oil inventories data were received as bullish indicators for this market. The overall commodities board was assisted by a steady to later softer US Dollar as the day progressed. It was a positive day for Oil, Sugar, Cotton, Soybean, Coffee, Gold and Silver markets and a softer day for Corn, Cocoa, Copper, Orange Juice, Wheat, Platinum and Palladium on Friday. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.16% lower to see this Index registered at 421.10. The day starts with the U.S. Dollar at 1.527 to Sterling and 1.093 to the Euro, while North Sea Oil is tending firmer in early trade and is selling at 63.34 per barrel. It was a steady opening on the London and New York markets on Friday and in relatively light volume of trade, both London and New York held in positive territory through the morning session. The range was held to a narrow band until the arrival of the Americas later in the session. The underlying buyers returned to the floor to contribute toward upward momentum in both markets and a steady to mildly positive close on the day in both markets, the Brazil Real continued a softer track on Friday and is trading at 3.176 against the US Dollar this morning. The markets finished the day nearer just off the days highs in both markets after a relatively slow and modest volume day in both markets, to set the close on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1632 + 10 JUL 126.15 + 1.00
Coffee Market Report June 01 2015 29th May, 2015. The arbitrage between the markets has narrowed yesterday to register this at 53.18 usc/Lb., while this equates to an attractive 41.61% price discount for the London robusta coffee market. This arbitrage continues 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 676 bags yesterday; to register these stocks at 2,156,339 bags. There was a 5,278 bag decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,111 bags. The commodity markets were mixed yesterday, as discussions around the economic debt crisis in Greece returned to headlines in Europe and highlighted in the G7 meetings being held in Germany this week. The US Dollar remained steady to firmer on the day. It was a mixed day for the Oil markets, Brent Crude mildly positive on the day and a sluggish and softer day for Soybean, Wheat, Sugar, Cocoa, Silver, Platinum and Palladium. It was a mildly positive day for Corn, Coffee, Copper, Cotton, Gold and a positive close for Orange Juice on day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.37% higher to see this Index registered at 421.79. The day starts with the U.S. Dollar near to steady and selling at 1.531 to Sterling and 1.094 to the Euro, while North Sea Oil is tending firmer in early trade and is selling at 61.14 per barrel. It was a steady opening on the London and New York markets yesterday in light volume through the morning session and some buoyancy returned in mildly positive sentiment as the day progressed. The overall softer macroeconomic sentiment across the board lent an influence later in the session, while the Brazil Real continued on a softer track against the US Dollar yesterday. The Brazil Real which is trading at 3.16 against the US Dollar this morning, slipped back through 3.18 to the US Dollar yesterday, similarly leaning in on the sentiment on New York toward the latter half of the session, with London following suit and took a softer turn. The range in both markets however was comparatively restrained at 2.56% between the earlier high on the day and later in the day low in the prompt month in New York; and 2.18% range in London. With only limited origin seller participation, both markets moved back to positive territory toward the latter end of the day, to register a close in the middle of the day’s trading range in both markets, and set the close yesterday on a mildly positive note, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1584 + 4
Coffee Market Report May 28 2015 The Brazilian Coffee Industry Association has estimated the countries annual consumption last year to have been approximately 20.33 million bags and is forecasting a 2% growth for the market for this year, which would extrapolate to something in the order of 20.74 million bags. This is very much in line with many other forecasts and would with the expectation of declining consumer market demand upon advantageous price competitive buying of conilon robusta coffees out of Brazil, suggest that overall dedicated in terms of quality demand for Brazil coffees for the coming October 2015 to September 2016 coffee year shall be in the order of 54 million bags. This demand figure of 54 million bags and even if it might be 55 million bags, is only marginally lower than many of the latest new crop forecasts and by nature in terms of the evidence of at least 5 million bags of carryover stocks, is not very supportive for speculative market sentiment. While despite the very recent dip in the international terminal market coffee prices, the firmer dollar that has seen the Brazil Real once again decline to below 3.15 to the dollar, it is allowing for internal market sales to continue and the resulting price fixation selling against the international markets. Albeit that there might still be some degree of price resistance and therefore, seeing new business being traded at higher differentials to the international market. The Brazil Government had a disappointing result from their auction yesterday of 38,856 bags of aged state arabica coffee stocks, which resulted in only 735 bags of these coffees attracting support above the reserve prices that were set. Thus so far in the regular auctions that have been held since April this year, the government has only sold approximately 46,000 bags out of their estimated 1.6 million bags of Federal coffee stocks. Thus it would seem that with the prevailing international market dictated prices that the price competitive domestic roasters would rather pay up a little for past crop private stocks and new crop coffees, than take advantage of the discounts offered for the aged Federal coffee stocks. The internal market price resistance to the dictates of the international coffee markets and more particularly the London market within Vietnam continues and farmers and internal traders knowing that many exporters have short sold export commitments to fill, are pressuring the exporters to pay up for their significantly large in volume stocks. This is forcing exporters to demand very positive differentials for new business and with consumer buyers tending to hold back from such levels, new business trade out of Vietnam is somewhat stalled for the present. One might comment that the consumer market industries are mostly taking the view that there is a limit to how long such price resistance can carry on for, as it is now only four and half months before the forecasted larger new crops shall start being harvested and by when the farmers and internal market trade shall be forced for both logistical and financial reasons, to have liquidated much of their stocks. There are concerns within India on the part of the countries exporters as they too are suffering from price resistance on the part of the farmers and it is likewise forcing them to demand premium differentials against the international terminal markets, to sell coffee to the consumer market industries. Thus for the present and unless there is to be soon a significant recovery in the trading range of the international coffee markets, the exporters are predicting that there shall be a dismal export performance out of India this year. The problem is however for the producers in general, is that the markets are being pressured lower not only by the prevailing fundamentals of more than sufficient world coffee supply, but also by the effects of the dollar and relatively modest worldwide economic growth, which has seen the funds lose much of their interest in supporting the commodity markets. Thus while many producers can still value add in terms of premiums over the value of the international terminal markets for new physical business, there is a limit to the extent of the premiums that consumer industries will pay and even with the premiums and against steadily rising costs of production, the farmers within most producer countries are struggling to profit out of their new crop stocks. This is not a healthy factor for longer term supply, as despite the present situation the world consumption is still on a positive track and if producers are not inspired to invest into increasing yields and production and even with possible weather issues aside, there could be a longer term shortage and tightness of supply developing for the coffee industry. However in this respect one might suggest that this possibility is two to three years to the fore and not something short term, with the prospects for the present and presuming no weather related damage to leading producers, looking like relatively soft prices for the next couple of years and too late to change the minds of farmers who might think to move into alternative crops. The arbitrage between the markets has narrowed yesterday to register this at 52.77 usc/Lb., while this equates to an attractive 41.49% price discount for the London robusta coffee market. This arbitrage continues 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 3,210 bags yesterday; to register these stocks at 2,157,015 bags. There was meanwhile a smaller in volume 54 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,389 bags. The commodity markets were mixed yesterday, but mostly continuing on their dollar related downside track for the day. The Coffee and Soybean markets had a day of buoyancy and the Natural Gas market was steady, while the Oil, Sugar, Cocoa, Cotton, Copper, 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 0.61% lower to see this Index registered at 420.23. The day starts with the U.S. Dollar near to steady and selling at 1.538 to Sterling and 1.094 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 60.40 per barrel. The London and New York markets started the day yesterday on a steady note and with volumes picking up in early afternoon trade, both markets started to show some corrective buoyancy. The New York market did take a short dip into negative territory while the London market held on to its gains but soon joined again by the New York market in positive territory, but while the continued for the rest of the day on a steady upside track the New York market once again came under pressure to shed much of the gains of the day and hold on to only a modest positive track for the rest of the day. The London market ended the day on a positive note and with 97.7% of the gains of the day intact, while the New York market ended the day on a modestly positive note and with only 16.7% of the earlier in the day’s gains intact. This close while overall positive does not inspire very much confidence and one might think to see a modestly softer start for the London market and a near to steady 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. MAY 1580 + 43 JUL 1618 + 43 JUL 124.50 + 0.45 SEP 1641 + 41 SEP 127.20 + 0.35 NOV 1662 + 41 DEC 131.05 + 0.30 JAN 1683 + 41 MAR 134.70 + 0.25 MAR 1706 + 41 MAY 136.90 + 0.25 MAY 1730 + 40 JUL 138.85 + 0.25 JUL 1753 + 38 SEP 140.40 + 0.35 SEP 1777 + 37 DEC 142.60 + 0.35 NOV 1803 + 37 MAR 144.90 + 0.45
Coffee Market Report May 27 2015 The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market decrease their net short sold position within the market by 64.32% over the week of trade leading up to Tuesday 19th. May; to register a net short sold position of 3,595 Lots on the day. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 3.66%, to register a net long position of 27,396 Lots on the day. Meanwhile the Non Commercial Speculative sector of this market decreased their net short sold position within the market by 51.15% over the same week; to register a net short sold position of 6,901 Lots. This net short sold position which is the equivalent of 1,956,403 bags has most likely been significantly increased over the period of sharply lower trade that has since followed and likewise, that of the Managed Money fund sector of the market. The latest Commitment of Traders report from the London robusta coffee market has seen the Speculative sector of this market reduce their net long position within the market by 11.8% over the week of trade leading up to Tuesday 19th. May; to register a net long of 14,063 Lots on the day. This net long that is the equivalent of 2,343,833 bags has most likely been further reduced over the period of overall softer trade, which has since followed. Following a bout of recent new Brazil crop forecasts that all well exceed 50 million bags, the Brazilian export house Terra Forte have forecast that the new crop shall be more in line with many of the earlier in the year more modest forecasts, at 47.28 million bags. This figure which questions the higher levels of the other recent reports is made up by a forecasted new arabica coffee crop of 32.05 million bags and a conilon robusta crop of 15.23 million bags. While the report does make mention that following the good rains of late the trees are now looking good and are in recovery after the past year of spells of dry weather, to so far indicate a good and much larger crop in 2016. In terms of Rain over the main coffee areas in Brazil and while the country is now within the dry winter season, there are still bouts of rain showers being experienced over the main arabica coffee districts and shall cause some interruptions to the harvesting of the new arabica coffee crop in the coming week. These rains shall further assist to maintain the fair to good ground water retention levels within the main coffee districts in south east Brazil, to further assist the trees to counter the stress of the new crop harvest. The Vietnam Governments General Statistical Office have forecast that the countries coffee exports of mostly robusta coffee for the month of May shall be 27.3% lower than the same month last year, at a total of 1.67 million bags. This to contribute to the countries cumulative coffee exports for the first eight months of the present October 2014 to September 2015 coffee year to being 28% lower than the same period in the previous coffee year, at 14.53 Million bags. This report tends to further highlight that following the 2014 year end crop of approximately 27 million bags, the extent of price resistant hoarding of stocks by the countries farmers and the potential for surging selling activity that might be due over the next two to three months ahead of the start of the new crop harvest in October. The well respected United States Department of Agriculture Foreign Agricultural Service has forecasted that the new crop and coffee production in Vietnam for the forthcoming October 2015 to September 2016 coffee year shall be 28.67 million bags. This new crop made up by 27.12 million bags of robusta coffees and 1.05 million bags of arabica coffees. The report also indicates that the country shall have a domestic consumption for the coffee year of approximately 2.17 million bags and would therefore indicate an exportable coffee factor from this new crop of approximately 26.5 million bags. This would however be aside from the significant volumes of unsold carryover stocks that most likely due to be in place at the start of the new crop, which would contribute to a coffee availability from Vietnam for the consumer markets in the coming coffee year, which might be as high as 30 million bags. A somewhat bearish factor for the medium term fortunes of the London robusta coffee market. The arbitrage between the markets has broadened yesterday to register this at 54.28 usc/Lb., while this equates to an attractive 42.79% price discount for the London robusta coffee market. This arbitrage continues 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 2,693 bags yesterday; to register these stocks at 2,153,805 bags. There was meanwhile a larger in volume 11,060 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 59,335 bags. The commodity markets returned from the long weekend yesterday to more positive economic data from the U.S.A. and renewed speculation for rising interest rates and thus with renewed muscle of the dollar, the overall macro commodity index lost some weight. The Cotton market nevertheless had a day of buoyancy and the Cocoa market was neat to steady, while the Oil, Natural Gas, Sugar, Coffee, 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 1.64% lower to see this Index registered at 422.80. The day starts with the U.S. Dollar near to steady and selling at 1.540 to Sterling and 1.091 to the Euro, while North Sea Oil is steady in early trade and is selling at 62.30 per barrel. The London and New York markets started the day yesterday with some early buoyancy in thin trade and continued on a positive track into the afternoon trade, but finally succumbed to the influences of the firmer U.S. dollar and the negative nature of the macro commodity index, to head back into a negative territory and a downside track. The London market continued to end the day on a soft note and with 85% of the losses of the day intact, while the New York market ended the day on a likewise soft note and with 87.9% of the earlier losses of the day intact. This soft close does little to inspire, but one might expect to see a cautiously steady start during early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1537 – 52 JUL 1575 – 51 JUL 124.05 – 2.90 SEP 1600 – 51 SEP 126.85 – 2.95 NOV 1621 – 51 DEC 130.75 – 2.90 JAN 1642 – 50 MAR 134.45 – 2.90 MAR 1665 – 50 MAY 136.65 – 2.90 MAY 1690 – 50 JUL 138.60 – 2.65 JUL 1715 – 50 SEP 140.05 – 2.55 SEP 1740 – 50 DEC 142.25 – 2.60 NOV 1766 – 50 MAR 144.45 – 2.55 |
