This improved performance so far within this coffee year for El Salvador is however not of much significance, in terms of the fact that the new crop is still in its early days of harvest and with many forecasts not indicting much in the way of an increase for this crop. The present forecasts for the new El Salvador coffee crop being in the region of 700,000 bags, as there are many farms still sporting immature trees post the replanting of aged Roya or Leaf Rust diseased trees post the disastrous Roya infestation two years ago.

While there was a dip in the levels of the overall port warehouse coffee stocks in the U.S.A. for the month of October and again last month, it has with the fact that the November stock levels are the highest for thirteen year, not contributed to any bullish sentiment for the New York market. Rather one might comment that with industry controls over inventory levels being much more efficient these days and the corresponding requirement for lower stock levels, the news that these stocks reported on Tuesday at 5,791,996 bags, is proving to be more bearish than bullish for market sentiment.

Meanwhile with the news of the much expected Federal Reserve Bank increase in the U.S. interest rate yesterday and with the Brazil Real falling to trade close to 3.9 to the U.S. dollar and assisting to inspire Brazil sales, it is tending to dampen some speculative spirits within the market. While with the majority of industry buyers within the main consumer markets now distracted with yearend figures and the Christmas and New Year holiday’s that are on the horizon, there are only small volumes of industry buying under the New York and London markets. This lacklustre buying interest being further inspired by the lack of supportive fundamental news coming to the coffee markets, which further assists to keep the markets within the prevailing relatively soft trading range.

The March on March contracts arbitrage between the markets narrowed yesterday, to register this at 50.53 usc/Lb., while this equates to a 42.37% 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 3,525 bags yesterday; to register these stocks at 1,777,571 bags. There was meanwhile a larger in volume 15,460 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 30,710 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 firm U.S. dollar have a negative impact upon sentiment, while many players were perhaps distracted and taking a wait and see stance, while they awaited the news from the Federal Reserve Bank in the U.S.A. In the meantime with the Oil markets suffering something of a sharp reversal through the day, the overall macro commodity index one again took a softer track for the day. The London robusta Coffee, Copper, Orange Juice, Gold, Silver and Platinum markets had a day of buoyancy. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.37% lower to see this Index registered at 372.31. The day starts with the U.S. Dollar showing a degree of follow through buoyancy in early trade and trading at 1.495 to Sterling and 1.086 to the Euro, while North Sea Oil is tending softer in early trade and is selling at 36.65 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 modest positive track into the afternoon trade. The New York market did however have a very erratic day but within an environment of thin trade that accentuated the moves and with brief positive spikes, but these were short lived and were soon countered by similarly sharp reversals, while the London market continued to maintain a positive stance through the day. The London market continued to end the day on a positive note, but with only 42.1% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 59.1% of the earlier losses of the day intact. This close does little to inspire confidence and particularly so with the firmer U.S. dollar in play this morning, which might make one think that the markets shall inspire little better than a 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 1486 + 6                                              DEC    118.10 + 2.45
MAR 1515 + 8                                            MAR   119.25 – 0.65
MAY 1544 + 7                                           MAY    121.50 – 0.60
JUL 1571 + 7                                               JUL    123.55 – 0.60
SEP 1593 + 8                                               SEP    125.50 – 0.60
NOV 1614 + 9                                            DEC    128.20 – 0.65
JAN 1632 + 9                                             MAR   130.85 – 0.60
MAR 1652 + 10                                         MAY   132.50 – 0.75
MAY 1674 + 10                                           JUL   134.05 – 0.85
JUL 1703 + 10                                             SEP   135.35 – 1.00