The problem remaining during November the internal market price resistance that continued to inflate asking export differentials to levels well above tenderable parity, which has restrained consumer market buying interest to only need to have coffees. But one might expect that while there might be some improvement to export volumes for the month of December, that one shall see volumes building up during January as farmers and internal traders start to become more aggressive sellers ahead of the February Tet New Year (Year of the Monkey) celebrations.

The Green Coffee Association of the U.S.A. have announced that the countries port warehouse stocks decreased by 156,232 bags or 2.63% during the month of November, to register these stocks at 5,791,996 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 fed by these stocks of 530,000 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 October stocks in North America of at the very least 6.9 million bags, it would have equated to something in the order of 13 weeks of roasting activity and still a safe reserve, in terms of the potential for a steady flow of new crop coffees from Brazil and Colombia that are already coming to the market and soon followed, by the new crop coffees from Mexico, Central America, Vietnam and India. Crops that in terms of short term volume availability and competition to find a home, shall tend to limit the possibilities for individual producers to show strong price resistance to the price dictates of the still relatively soft terminal markets.

The Coffee Board of India have reduced their forecast for the record new October 2015 to September 2016 crop by 1.6% to now forecast a new crop of 5,833,334 bags, which would be made up by 1,796,667 bags of arabica coffee and 4,036,667 bags of robusta coffees. This new crop while now estimated to be a little lower than their earlier expectations, would still be 7.03% higher than their previous coffee year crop, which they have recorded at 5,450,000 bags.

The March on March contracts arbitrage between the markets narrowed yesterday, to register this at 51.54 usc/Lb., while this equates to a 42.98% 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 in more volume upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 15,234 bags yesterday; to register these stocks at 1,781,096 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 15,250 bags.

There was no report on the Certified Robusta coffee stocks held against the London market were seen to remain unchanged as at Friday 11th. December; to see these stocks registered at 3,321,333 bags.

The commodity markets were mixed in trade again yesterday and with a firming U.S. dollar have a negative impact, but with the influential Oil markets showing some buoyancy and assisting the overall macro commodity index to take something of a sideways track for day, while many of the markets remained on a softer track for the day. The Oil, Sugar, London robusta Coffee, Wheat, Silver and Platinum markets had a day of buoyancy and the New York arabica Coffee market was steady, while the Natural Gas, Cocoa, Cotton, Copper, Orange Juice, Corn, Soybean and Gold markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.04% lower to see this Index registered at 373.70. The day starts with the U.S. Dollar showing a degree of buoyancy in early trade and trading at 1.504 to Sterling and 1.094 to the Euro, while North Sea Oil is steady in early trade and is selling at 37.40 per barrel.

The London and New York markets had a steady start for early trade yesterday, with both markets adding some value through the morning and taking a positive track into the afternoon trade. As the afternoon progressed however, the New York market started to come under pressure and to shed its gains and to move back to below par, while the London market saw its gains of the day being eroded, but with the New York market recovering to take a late sideways track at around par and the London market maintain some modest buoyancy. The London market ended the day on a modestly positive note but with only 10.5% of the earlier gains of the day intact, while the New York market ended the day on par. This is a rather uncertain close and one that is unlikely to inspire, but one might nevertheless expect to see a cautious near to steady start for early trade today against the prices set yesterday, as follows:

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

JAN 1480 + 5                                         DEC 115.65 – 1.60
MAR 1507 + 2                                      MAR 119.90 unch
MAY 1537 + 3                                      MAY 122.10 unch
JUL 1564 + 3                                          JUL 124.15 unch
SEP 1585 + 3                                         SEP 126.10 + 0.05
NOV 1605 + 4                                       DEC 128.85 + 0.05
JAN 1623 + 3                                        MAR 131.45 + 0.05
MAR 1642 + 3                                      MAY 133.25 + 0.05
MAY 1664 + 3                                        JUL 134.90 + 0.05
JUL 1693 + 3                                          SEP 136.35 unch