The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks increased by 8,521 bags or 0.14% during the month of November, to register these stocks at 6,198,483 bags at the end of the month. These stocks do not of course include the in-transit bulk container coffees or the onsite roaster inventories, which with an approximate combined U.S.A. and Canadian weekly consumption that is supported by these stocks of 560,000 bags per week, would conservatively have been at least 1.1 million bags.

Therefore, if one is to consider the additional unreported stocks and look to end November stocks in North America of approximately 7.3 million bags, it would have equated to something in the order of 13 weeks of roasting activity. This number remains a safe reserve, in terms of the steady flow of new crop arabica coffees from Brazil and Colombia that are already coming to the market and soon to be followed, by the new crop arabica coffees from Central America, along with the new crop robusta coffees from Vietnam.

Arabica coffee farmers in the Karnataka and Tamil Naidu districts in India have voiced fears that the Cyclone Vardah that impacted upon the east coast of India this week and the unseasonal excessive wind and rain that came with this cyclone, might have reduced the new arabica coffee crop potential by approximately 170,000 bags, due to cherry drop of ripening cherries and to slit ripe cherries. This damage to ripening cherries accentuated they say, by the winds having uprooted coffee trees within many of the farms. Thus indicating a new arabica coffee crop that is starting to come to the market, at approximately 1.5 million bags.

Contrary to the fears on the part of the Indian arabica coffee farmers, the robusta coffee farmers with their new crop that comes in a little later than the arabica crop, have seen the rains that came with the cyclone to be something of a bonus. These rains assisting to buoy the ground water retention levels and to assist in the steady development of the new crop, that shall start coming to the market in February next year. This new robusta coffee crop presently being forecasted by the Coffee Board of India, at approximately 3.67 million bags.

Meanwhile with the delayed new Vietnam crop starting to head towards a peak and possibly due to be completed by the second week of January, the internal market supply and with some degree of price resistance in play, is reported to be slow. But one might expect that by January there shall be more active selling within Vietnam of particularly the robusta coffees, as with the prevailing tight supply of Indonesian robusta coffee and the lack of supply of Brazil conilon robusta coffees, there is bound to be active buying interest for Vietnam robusta coffees from the consumer markets.

The March to March contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 48.94 usc/Lb., while this equates to a 34.41% price discount for the London robusta coffee market. This narrowing arbitrage is now becoming less of an attractive factor for the 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 1,875 bags yesterday; to register these stocks at 1,250,012 bags. There was meanwhile a larger in number 8,466 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,294 bags.

The commodity markets encountered a post interest rate hike firmer U.S. dollar yesterday, with many markets coming under pressure and the overall macro commodity index taking a softer track for the day. The Oil, Sugar, London robusta Coffee, Cotton, Copper and Soybean markets nevertheless had a day of buoyancy, while he Natura Gas, Cocoa, New York arabica Coffee, Orange Juice, Wheat, Corn, Gold and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.24% lower; to see this Index registered at 418.76. The day starts with the robust U.S. dollar steady and trading at 1.243 to Sterling and 1.044 to the Euro, while North Sea Oil is steady and selling at 51.95 per barrel.

The London and New York markets started the day yesterday on a modestly softer note and with the London market retaining this softer stance into the afternoon trade, while the New York market came under further pressure and with sell stops in play, to accentuate its losses. There was however a late in the day recovery and with the London market moving back into modest positive territory, while the New York market mad a partial recovery from the 4.85 usc/Lb. losses that were posted. The London market ended the day on a modestly positive note and with 50% of the gains of the day intact, while the New York market ended the day on a soft note, but having recovered 59.8% of the earlier losses of the day by the close. This close and with the firm U.S. dollar in play does little to inspire, but with the ability of the New York market to bounce back from the lows and the technical picture of the markets tending to look positive, one might expect to see a close to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                    NEW YORK ARABICA USc/Lb.

JAN 2071 + 6                                                  DEC 138.30 – 1.95
MAR 2056 + 3                                                MAR 142.20 – 1.95
MAY 2060 + 1                                                MAY 144.45 – 1.95
JUL 2065 + 3                                                    JUL 146.70 – 1.90
SEP 2065 + 1                                                    SEP 148.60 – 1.90
NOV 2066 + 1                                                 DEC 151.45 – 1.95
JAN 2070 + 1                                                 MAR 154.15 – 1.90
MAR 2078 – 1                                                MAY 155.80 – 1.95
MAY 2090 – 5                                                  JUL 157.40 – 1.95
JUL 2108 – 5                                                    SEP 159.05 – 1.95