The United States Department of Agriculture Foreign Agriculture Service have come forth with their assessment for the October 2014 to March 2015 new crop in Nicaragua, which they have estimated to have been 14% higher than the previous crop, at a total of 2 million bags. This improved crop they forecast shall be followed by a marginally higher new 2015/2016 crop of 2.1 million bags.

The Brazilian Institute for Geography and Statistics (IBGE) have increased their earlier new Brazil crop forecast by 1.9%, to now assess the new crop at 43.2 million bags. This forecast is rather dramatically lower than the host of recent forecasts that peg this new crop well in excess of 50 million bags and is even lower than the official Brazilian Crop Supply Agency (CONAB) forecast at 44.28 million bags, which is already a very questionable figure. These reports are meanwhile are largely ignored by the speculative sector of the market, which is tending to support the prevailing soft trading range.

Brazil aside there is little in the way of striking news coming to the coffee markets for the present and in terms of forthcoming production volumes, there are no fears being voiced from any of the leading producer blocs. Rather the news is somewhat negative for the markets, with most reports forecasting a larger than initially expected new Brazil crop that is now only likely to be a marginally deficit crop, while there is now a larger new Peru crop coming to the market and accompanied by a larger new Mitaca crop from Colombia. These improved crops coming into play over and above a larger new crop from Indonesia and the threat of a flood of robusta coffees due from Vietnam, where it is estimated that farmers and internal traders are still holding stock of in excess of 40% of the last harvest and now only four months ahead of the forthcoming new harvest.

The arbitrage between the markets has narrowed on Friday to register this at 55.79 usc/Lb., while this equates to an attractive 41.51% 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 1,580 bags on Friday; to register these stocks at 2,129,539 bags. There was meanwhile a larger in volume 3,387 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 47,028 bags.

The commodity markets were generally softer on Friday, with the overall macro commodity index taking a softer track for the day. The Sugar, Cocoa, London robusta Coffee, Cotton, Copper and Wheat markets nevertheless showed some buoyancy and the New York arabica Coffee market was steady, while the Oil, Natural Gas, Orange Juice, 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 0.61% lower to see this Index registered at 421.95. The day starts with the U.S. Dollar showing a degree of muscle and selling at 1.555 to Sterling and 1.121 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 62.55 per barrel.

The London market started the day on Friday on a marginally softer note, while the New York market started with a degree of buoyancy but to soon join the London market in negative territory and with both markets taking a softer track into the afternoon trade. As the afternoon progressed however the markets recovered and with the more volatile New York market in the lead, both markets moved back into positive territory. The markets did however start to run out of steam later in the day and with the London market while ending the day on a positive note only retaining 42.9% of the earlier gains of the day and the New York market having shed its earlier 3.20 usc/Lb. gains for the day, ending the day on a barely steady note. This close does not inspire much confidence and one might expect little better than a near to steady start for early trade today against the prices set on Friday, as follows:

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

JUL 1722 + 11                              JUL   132.05 + 0.05
SEP 1733 + 6                                SEP   134.40 – 0.05
NOV 1752 + 6                              DEC  138.00 – 0.05
JAN 1772 + 8                               MAR 141.45 – 0.05
MAR 1795 + 10                           MAY 143.45 + 0.05
MAY 1816 + 10                             JUL 145.05 + 0.05
JUL 1835 + 10                               SEP 146.45 unch
SEP 1856 + 10                              DEC 148.25 – 0.05
NOV 1876 + 10                            MAR 150.10 – 0.05
JAN 1899 + 10                              MAY 151.40 – 0.10