Coffee Market Report
| With the month of August passed, the National Coffee Institute of Honduras has announced that the countries coffee exports for the month were 7,872 bags or 5.56% higher than the same month last year, at a total of 149,368 bags. This improved performance follow a number of months of surging coffee exports and contributes to the cumulative exports for first eleven months of the present October 2014 to September 2015 coffee year to still being 859,673 bags or 20.77% higher than the same period in the previous coffee year, at a total of 4,998,713 bags.
This is a remarkable performance from Honduras where the coffee exports over the past couple of months have been related mostly to forward contract commitments, as with the crop mostly sold out there has been no volume of new short term export business being concluded. While with exports for the present coffee year looking by the end of this month to top 5 million bags, all indications are that Honduras shall have a follow on good crop that shall allow the country to maintain and perhaps even increase its market share within the main consumer markets for the coming October 2015 to September 2016 coffee year. Meanwhile the other star in terms of fine washed arabica coffees is Colombia who are likewise looking to a modest rise in production for the coming October 2015 to September 2016 coffee year, which should fuel exports for the period of close to 12 million bags. These factors and along with no real threat so far foreseen for the new crop production levels in the other Central American countries and the East African countries, tending to dampen spirits within the speculative and fund sectors of the related New York market. The relatively large Brazilian coffee cooperative Cocatrel has announced that with their new crop harvest of arabica coffees over 80% complete, that they forecast this new crop to be similar to the size of last year’s crop of close to 1 million bags. This report while making note the quality of the crop is good does however counter in terms of reference to volume, the many other reports that have forecasted that while Brazil has a smaller conilon robusta crop this year, that the country shall be in receipt of a larger new arabica coffee crop. But the news did little to counter the prevailing negative spirits, within the New York arabica coffee market. The arbitrage between the markets narrowed yesterday to register this at 46.64 usc/Lb., while this equates to a 39.41% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 12,925 bags yesterday; to register these stocks at 2,075,790 bags. There was meanwhile a smaller in volume 7,675 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 25,655 bags. The commodity markets had a more settled day yesterday and with some support coming from continued good economic figures from the U.S.A., while European economic figures are modestly positive, assisting to stabilise sentiment. While for the time being with China distracted with their preparations for the 70 years since the end of the war with Japan celebrations today, there was little in the way of economic news coming to the fore from China, to affect the markets further. The Sugar, Copper and Silver markets had a day of buoyancy and the Orange Juice and Platinum markets were steady, while he Oil, Natural Gas, Cocoa, Coffee, Cotton, Wheat, Corn, Soybean and Gold markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.07% higher to see this Index registered at 395.04. The day starts with the U.S. Dollar steady and selling at 1.529 to Sterling and 1.123 to the Euro, while North Sea Oil is showing buoyancy in early trade and is selling at 49.70 per barrel. The London market started the day yesterday on a marginally softer note, while the New York market started the day with modest buoyancy. The New York market continued to take a buoyant track into the afternoon trade, while the London market moved back up to par. However with the entrance of the Americans onto the field of play and the declining value of the Brazil Real to below 3.75 to the dollar bring forth some selling and negative sentiment, the New York market lost its way and fell back into negative territory, while the London market lost a little more weight. The New York market confined to come under pressure as the afternoon progressed and to extend its losses, while the London market took a somewhat sideways negative track through to the close of the day. The London market ended the day on a soft note and with 91.7% of the losses of the day intact, while the New York market that had been 1 usc/Lb. up early in the day ended the day on a soft note and at new one and half year lows, with 92.4% of the earlier losses of the day intact. This close and its further negative influence upon the technical charts does little to inspire and one might expect little better than a steady to soft start for early trade today against the soft prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. SEP 1576 – 7 SEP 114.70 – 2.35 |
