Coffee Market Report
| In the latest round of reports released of annual coffee crop reviews, the Unites States Department of Agriculture Foreign Agricultural Service have published their latest annual crop forecast report on the Costa Rica coffee crop for coffee marketing year October 2017 to September 2018. This next crop which is exclusively arabica coffee is forecast to register an increase in production of 15% on the crop which is put at 1.347 million bags and the new crop to come at 1.55 million bags, of which an estimated 1.25 million bags are forecast to be available to fuel exports to consumer markets.
The Brazilian analyst Safras & Mercado have come forth with their latest report to indicate that the above average rains for this time in the season has slowed down harvesting that is in full swing with the robusta growing regions and starting in the arabica regions. The cumulative estimate is for the new harvest to have reached 15% or around 7.66 million bags of total area at 23rd May. This is nevertheless quite close to the five-year average at 16% overall, but with a 4% disparity apparent between this year’s harvest progress in the rain affected arabica growing areas, versus the same time last year. There has been a degree of disruption experienced in one of the main ports in Colombia, as strike action continues in the port city of Buenaventura. The civil action has seen a week-long protest that has caused backlog and delays out of this port for import and export trade, to include coffee. There are discussions between local community leaders and government officials already underway, while alternative albeit costly avenues are available to exporters to move consignments overland to other ports and the Caribbean Sea port of Cartagena. This strike action is reported to have created a sizeable backlog already for the containers that are already stored at the port, however one would not anticipate that short-term strike action would be cause for much concern within consumer markets, where coffee stocks are overall relatively comfortable as the northern hemisphere coffee consumer countries move into their traditionally slower roasting and consumption summer months. The July to July contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.57 usc/Lb., while this equates to 32.15% price discount for the London robusta coffee market. This arbitrage may nevertheless become an attractive factor for the many price sensitive roast and ground roasters who have considered robusta coffees to be an opportunist discount component, within their mostly arabica coffee blends. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 4,161 bags yesterday; to register these stocks at 1,462,252 bags. There were 6,090 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 51,821 bags. The commodity markets were mixed with some markets observing a holiday yesterday. The latest meetings of the U.S. Federal Reserve played down the likelihood of an interest rate hike in near future and market related news regarding Oil producer nations organisation, OPEC confirming output cuts which were negatively received in this market. It was a softer day for the Oil markets, Sugar, Cocoa, Corn, Soybean, Wheat, Orange Juice, Gold and Silver markets. It was a relatively flat day for Cotton, and a positive finish for Coffee, Platinum and Palladium markets. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.43% lower, to see this Index registered at 407.76. The day starts with the U.S. Dollar steady and trading at 1.288 to Sterling and at 1.119 to the Euro, North Sea Oil steady in early trade and is selling at $ 50.32 per barrel. The London and New York markets started the day in mixed and light trade, the London market treading around unchanged and the New York arabica market, narrowly in the black, where volume remained quite thin and the early part of the se4ssion hardly changed in both markets, London followed New York to move gradually into positive territory early on. The arrival of the America’s to the market brought a fresh round of sellers in to cap the morning gains and both markets progressed into midsession in negative territory. The last few hours of the day brought fresh buying activity into both markets and sizeable volumes to the fore as speculative fund and to a lesser degree consumer industry boosted support along the way. The trend in both markets was for a positive turnaround to see both markets push back into positive territory, where the close set just off the days’ high in New York and close to the days’ high in London, there is a national holiday in New York on Monday for Memorial Day and thus a long weekend public holiday ahead for this market. The close yesterday after a buoyant session and in hefty volumes in New York, set as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1904 + 27 |
