The latest reports from Brazil indicate that most of the main coffee districts in the country experienced near normal rains for the month of October. There are however more rains are forecast to move up from the southern coffee districts during the weekend and to impact over most of Southeast Brazil next week, and throughout November.

In terms of commercial activity within Brazil and following yesterday’s Dia de Finados or All Souls Day public holiday, most of the commercial houses shall remain closed for business today and for a long weekend for the majority within the country. Therefore, once again, there shall be little in the way of price fixation selling activity due from Brazil within the New York market today, which might assist to buoy the market ahead of the weekend.

Meanwhile, the Monetary Policy Committee from The Central Bank in Brazil has continued its rate-cutting cycle, reducing the benchmark Selic rate by 50 basis points on Wednesday, to see the new rate set at 12.25%. This comes as the third consecutive interest rate cut, with expectations of further rate cuts to come as inflation reportedly appears to be under control.

There are rains forecast for the main central highlands in Vietnam for the next few days, which shall continue to delay the start of the new crop harvest in any volume. However so far, the delayed start to end of the rain season is not seen to be damaging to the prospects of what is foreseen to be a good new robusta coffee crop, but only a delay factor to this crop having an impact upon consumer market supply, in an already stressed Vietnam physical robusta supply environment.

The physical coffee trade remains relatively subdued for the present, but perhaps there might be more activity within this sector of the market within the coming weeks, with northern hemisphere winter roasting, industries may take in some additional new crop Colombia, Central American and in the coming months, Vietnam cover.

The consumer industries are likely in terms of the limited consumer arabica coffee stocks, as illustrated by the 24-year low Certified Washed Arabica coffee stocks held against the exchange, still likely to remain conservative in the futures markets, leaving nearby direction very much in the hands of the speculative and fund sectors.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 11,933 bags yesterday, to register these stocks at 368,100 bags, with 98.66% of these certified stocks being held in, Europe at a total of 363,172 bags and the remaining 1.34% being held in the USA at a total 4,928 Bags. Of this, a total 92,605 bags, or 25.16% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 68.67% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.

The December 2023 to January 2024 contract arbitrage between the New York and London markets widened yesterday to register this at 59.75 Usc/Lb. This equates to 36.14% price discount for the London Robusta coffee.

It was a firmer day on the commodity markets yesterday, with the US Dollar losing ground against a basket of other currencies. A weaker US Dollar is seen to be a bullish factor for commodities traded in other currencies. The Coffee, Cocoa, Soybean, Wheat, Gold, Palladium and Platinum markets ended the day on firmer note, the Sugar market remained unchanged on the day, while the Corn and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.220 Sterling, at 1.062 the Euro and with the US Dollar buying 4.954 Brazil Real.

The New York and London markets started the day yesterday trading to the north of par on a firmer note respectively. Both markets continued to trade in firmer territory for the remainder of the morning session, gaining momentum throughout the session with support seen to build during the late morning session. As the afternoon progressed the New York and London markets, buoyed further with buy stops triggered as speculative buyers became active, upward momentum continued to build to see both markets hit a ceiling for the day’s session, to limit the gains for the day. Late in the day the markets dropped back from the day’s highs to see the New York market settle on a firmer note at the close, while the London market dropped right back from the earlier highs to settle on a modest firmer note at the close.

The London market ended the day on a modest positive note with 30.77% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 79.29% of the earlier gains of the day intact. This firmer close for the markets, might provide some degree of support and direction, with the New York market settling near to the highs of the day, one might think that the markets are due 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.

JAN     2328 + 16                                        DEC    165.35 + 5.55
MAR   2285 + 9                                          MAR   163.85 + 5.00
MAY   2263 + 8                                          MAY   164.25 + 4.90
JUL     2244 + 8                                          JUL     165.20 + 4.85
SEP     2236 + 8                                          SEP     166.00 + 4.90
NOV   2227 + 7                                          DEC    167.05 + 4.85
JAN    2216 + 7                                          MAR   168.65 + 4.90
MAR  2209 + 7                                          MAY   169.60 + 4.95