News has come to the fore of significant rainfall received in the Gofa region of Southern Ethiopia, these torrential downpours, have resulted in significant soil erosion and landslides with tragic loss of life, displacement and infrastructural damage within vulnerable communities that are affected. Weather patterns globally have been disrupted by the El Niño weather phenomenon, which has been categorised as one of the top five El Niño weather patterns on record, while this weather pattern is starting to wane, there is a likelihood according to the U.S. Governments National Weather Service’s Climate Prediction Centre, that La Niña weather conditions will develop by the start of the third quarter and prevail for the remainder of the year. The forecast onset and strength of what is likely to be a La Niña weather phenomenon is not yet clear although traditionally brings with it accentuated drier weather conditions in regions of southern continent America and excessive rainfall in equatorial areas which can impact the Pacific Rim countries.

The Certified washed arabica coffee stocks held against the New York arabica market were seen to decrease by 1,072 bags yesterday, to register these stocks at 812,306 bags, with 98.31% of these certified stocks held in, Europe at a total of 799,588 bags and the remaining 1.69% being held in the USA at a total 13,718 Bags. Of this, a total 412,981 bags, or 50.84% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.48% of these certified coffees, from Honduras. The pending grading stocks were seen to increase by 12,905 bags on the day; to register 12,905 bags pending grading on the day.

The September 2024 to September 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 34.88 Usc/Lb. This equates to 15.09% price discount for the London robusta coffee.

It was a mixed day overall on the commodity yesterday, with investors looking ahead to the U.S.A report on gross domestic product for the second quarter along with personal consumption expenditures data for the month of June, that is due out tomorrow. The Corn, Wheat, Gold, Platinum and Palladium markets ended the day on a firm note, while the Coffee, Cocoa, Sugar, Soybean and Silver markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.288 Sterling, at 1.084 the Euro and with the US Dollar buying 5.655 Brazil Real.

The New York and London markets started the day yesterday pressured lower during the early session, dropping below par to trend in a softer direction from the open. The markets continued a softer trajectory as resistance was encountered to see the markets move lower during the remainder of the morning session.  As the afternoon progressed the volume increased to contribute to the day’s direction with speculative selling on the New York floor assisting to trigger stops along the way. The London market followed suit and the markets continued to project lower with a large degree of speculative long liquidation to accentuate the losses for the day’s trade.  The softer Brazil Real possibly adding some modest volume of producer selling to the day. The selling activity started to wane toward the end of the days’ trade, to see the markets marginally recover some of the earlier losses of the day, in good volumes of trade for both the New York and London markets, to settle near to the lows of the day, on a very soft notes at the close.

The London market ended the day on a negative note with 93.33% of the earlier losses of the day intact, while the New York market ended on a likewise negative note, with 92.98% of the earlier losses of the day intact. This very soft close, with both the New York and London markets settling near to the lows of the day with most of the earlier losses intact, might lead one to think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:

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

SEP         4327 – 154                               SEP        231.15 – 7.95

NOV       4176 – 151                                    DEC       230.10 – 7.40

JAN        4006 – 136                                     MAR      228.80 – 7.05

MAR      3866 – 120                                     MAY      226.40 – 6.50

MAY      3761 – 108                                     JUL        224.25 – 5.85

JUL       3665 – 93                                  SEP        222.10 – 5.40

SEP       3587 – 93                                  DEC       219.60 – 5.25

NOV     3530 – 93                                  MAR      217.00 – 5.10