Rainfall is still not favourable at this time of the year, with reports of low measure rainfall received in isolated areas of the main Brazil arabica coffee growing area throughout parts of Cerrado, Sul de Minas and Sao Paulo, though not widely dispersed and temperatures are being recorded at the higher end of the daily average for the month so far. Weather forecasters are indicating that more intense rains are due to reach certain regions of coffee belt this coming weekend. The seasonal rains that traditionally come to the Brazil coffee belt around October each year, is necessary to set the flowering and maintain fruit development ahead of the next coffee crop, which arabica coffees have around ten months of development ahead, before the harvest to come, around midyear, in 2022.

With the month of September coming to a close and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of September shall be 20.30% higher than the same month last year, at a total of approximately 2,000,000 bags. This they say, shall result in the countries coffee exports for the first nine months of this calendar year to be 4.20% lower than the same period last year, at a total of 19,833,333 bags.

The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the first nine months of this year, shall be 4.40% higher than the same period last year, at a total of approximately 2.25 billion US Dollars.

The November-to-December contract arbitrage between the London and New York markets widened yesterday to register this at 100.62 usc/Lb. This equates to 50.66% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 2,600 bags yesterday, to register these stocks at 2,118,855 bags, with 94.12% of these certified stocks being held in Europe at a total of 1,993,996 bags and the remaining 5.88% being held in the USA at a total 124,859 bags. Of this, a total 1,127,115 bags, or 53.19% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.40% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register no grading stocks on the day.

It was a softer day on the commodity markets on yesterday, the US Dollar gained further ground against a basket of other currencies, with expectations on a sooner than anticipated interest rate hike.  A stronger US Dollar is seen to be a bearish factor for many of the US Dollar based commodity markets when trading in other currencies. The markets Sugar, Coffee and Cocoa ended the day on a positive note, while the Corn, Soybean, Wheat, Oil, Gold, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.355 Sterling, at 1.682 the Euro and with the US Dollar buying 5.429 Brazil Real.

The New York and London markets started the day yesterday trading on a modest near to par softer note, both markets would quickly gain momentum which saw the markets trend firmer during the morning session. As the afternoon progressed both the New York and the London markets gained momentum buoyed by a large degree of buying support which saw buy stops triggered along the way as the market trended firmer, seeing both the New York and London markets through to a firmer note, near to the highs of the day at the close.

The London market ended the day on a positive note and with 78% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 92.52% of the gains of the day intact. This firmer close for the both the New York and London markets might inspire some degree of follow through confidence and direction, to possibly set the markets for a follow through steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                             NEW YORK USC/LB.

NOV 2160 + 39                                                      DEC 198.60 + 4.95
JAN 2145 + 30                                                       MAR 201.45 + 5.00
MAR 2088 + 19                                                     MAY 202.60 + 5.05
MAY 2064 + 16                                                     JUL 203.20 + 5.10
JUL 2058 + 18                                                       SEP 203.55 + 5.10
SEP 2059 + 19                                                       DEC 204.00 + 5.10
NOV 2063 + 19                                                     MAR 204.35 + 5.05
JAN 2069 + 19                                                       MAY 204.70 + 5.05