Coffee Market Report
| 29th. 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 increase their net short sold position within the market by 36.67% during the week of trade leading up to Tuesday 23rd. June; to register a net short sold position of 16,533 Lots. This net short sold position which is the equivalent of 4,687,032 bags has most likely been reduced, over the period of mixed but overall positive trade which has since followed. With the export registrations for the month in hand the authorities in Vietnam have estimated the countries coffee exports for the month of June shall be 2.5% higher than the same month last year, at a total of 1.83 million bags. This number would contribute to the countries cumulative coffee exports for the first nine months of the present October 2014 to September 2015 coffee year to being 25% lower than the same period in the previous coffee year, at 16.43 million bags. These exports have included the substantial carryover last quarter of 2013 crop stocks that were carried over into the new harvest and one might guess that these exports might only include approximately 14.5 million bags, out of the last quarter 2014 crop coffees. This 2014 crop has been generally been estimated at around 26.5 million bags, which would tend to highlight in terms of the relatively low export volumes so far this coffee year, the effect of internal market price resistance and inflated export price differentials that has slowed export volumes out of Vietnam this year. It is generally estimated that Vietnam’s farmers and internal traders are still holding in excess of 9 million bags and perhaps even as much as 10 million bags of past crop coffee stocks and with the new crop due to start in three and half months, one might expect to soon see these coffees starting to chase the market, so as to clear the decks, for receipt of the new crop coffees. Thus with consumer market demand not due to match the numbers of robusta coffee availability out of Vietnam, one might expect to see prices starting to become more affordable to the trade by the last quarter of the month and at levels that might assist the trade to tender stocks to the London exchange. The Ugandan Coffee Development Authority have reported that the countries coffee exports for the month of May were 23,118 bags or 8.07% lower than the same month last year, at a total of 263,330 bags. This lower volume follows a run of months of lower export volumes and the countries cumulative coffee exports for the first eight months of the present October 2014 to September 2015 coffee year are 330,323 bags or 13.51% lower than the same period in the previous coffee year, at a total of 2,114,635 bags. The value of the coffee exports from Uganda for the month of May was likewise $ 5,264,694.00 or 14.69% lower than the same month last year, at a total of $ 30,580,259.00. However this follows some comparatively higher value exports earlier on in the October 2014 to September 2015 coffee year and the cumulative value of coffee exports from Uganda for the first eight months of the present coffee year is still $ 6,777,655.00 or 2.57% higher than the same period in the previous coffee year, at a total of $ 270,866,203.00. This higher value and likewise in comparatively higher value U.S. dollars takes some of the bite out of the negative aspects of the more modest export volumes and prices, to assist to inspire the countries coffee farmers to maintain focus upon the prevailing steady growth in coffee farming activity and quality of farming, for the countries program to target production levels in excess of 4 million bags per annum in the coming years. The arbitrage between the markets has narrowed on Friday to register this at 50.99 usc/Lb., while this equates to a still attractive to roasters 38.21% 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 3,569 bags on Friday; to register these stocks at 2,149,825 bags. There was meanwhile a larger in volume 7,495 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 36,491 bags. The commodity markets had another mixed day on Friday, but with sufficient buoyancy within the majority of the markets, to assist the overall macro commodity index to maintain a degree of buoyancy. The Oil, Sugar, Cocoa, London robusta Coffee, Cotton, Copper, Wheat, Corn and Gold markets had a day of buoyancy, while the Natural Gas, New York arabica Coffee, Orange Juice, 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 0.60% higher to see this Index registered at 426.86. The day starts with the U.S. Dollar showing a degree of buoyancy and selling at 1.570 to Sterling and 1.099 to the Euro, while North Sea Oil is tending softer and is selling at 59.40 per barrel. The London market started the day on Friday with some buoyancy and seemingly catching up with the late in the day recovery for the New York market the previous day, while the New York market started the day with some early losses. Trade was thin and erratic through the morning but with the New York market remaining mostly in negative territory and the London market retaining some modest buoyancy, into the early afternoon trade. However as the afternoon progressed and with volumes steadily increasing, the London market added to its gains and the New York market moved back into positive territory. The markets maintained a positive track for most of the afternoon but both markets came under pressure in late in the day trade and with the London market continued to end the day on a positive note and with 73.1% of the gains of the day intact, the New York market that had earlier in the day posted gains of 2.70 usc/Lb. shed its gains and slipped back to end the day on a negative note and with 50% of the earlier losses of the day intact. This mixed close provides likewise mixed signals and one might expect to see only a steady to soft start for the London market and a steady start for the New York market for early trade today against the prices set on Friday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1924 + 40 JUL 131.70 – 1.65 |
