The National Export Centre of Nicaragua have reported that the countries coffee exports for the month of July were 8,206 bags or 4.15% lower than the same month last year, at a total of 189,354 bags. This more modest performance does however follow the preceding months of overall improved export volumes and the report indicates that the cumulative exports for the first ten months of the present October 2014 to September 2015 coffee year are 11,414 bags or 7.48% higher than the same period in the previous coffee year at 1.6 million bags.

One might not however expect much of a surge in exports for the last two months of the present coffee year from Nicaragua and its neighbours in Central America, as aside from stocks being withheld by exporters to fulfil forward export commitments; the region is mostly fully sold. Thus one can expect to encounter modest export volumes from this important fine washed arabica coffee producer bloc for the last five months of this year, until the new crop starts to impact during the first quarter on next year. In the meantime though, there are surging export volumes from Colombia, which adequately fills the gap within this quality sector of the consumer markets.

There are forecasts for a new cold front to enter south east Brazil for this week and to bring with it rain showers, which could trigger some light flowerings towards the next 2016 new coffee crop. This news tended to be somewhat negative for sentiment within the New York market, as it indicates early flowerings towards what has been forecasted to be a potentially much larger 60 million bags coffee crop for the coming year.

It is however a little early in the year for the rains to impact within these districts and one might fear that unless there are follow on rains during the month of September that the early budding coffee might be threatened with abortion, but perhaps with the influence of the El Nino that usually brings increased rainfall for south east Brazil, there is a chance for further rains to follow in September. One might however following these early rains, expect to see some volatility coming to the markets during the month of September, depending upon the extent or the lack of it, of follow on rains during the month.

Friday was something of a bloodbath for the global equity markets and commodity markets, with a sharp reaction to the faltering fortunes of the Chinese having an impact upon sentiment in general. This sharp reaction and with sell stops being triggered for most markets did not exclude coffee and with fund and speculative sell stops being triggered while industry buying remained largely side lined, the coffee markets joined most other markets in negative territory.

The arbitrage between the markets narrowed on Friday to register this at 51.97 usc/Lb., while this equates to a 41.10% 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 upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,590 bags on Friday; to register these stocks at 2,086,902 bags. There was meanwhile a larger in volume 8,800 bags decline to the number of bags pending grading for this exchange; to register these pending grading stocks at 19,304 bags.

The commodity markets had a dismal day on Friday, with the speculation over Chinese growth somewhat pulling the rug out of under the feet of the market. Speculation that brushed aside the positive influences of the slightly softer U.S. dollar and with the result that the overall macro commodity index took a negative track, to further fuel the bears within the markets. The Gold market had a positive day’s trade, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Soybean, Silver and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.40% higher to see this Index registered at 392.89. The day starts with the U.S. Dollar steady against Sterling and tending a little softer against the Euro and selling at 1.566 to Sterling and 1.143 to the Euro, while North Sea Oil is tending a little softer in early trade and is selling at 42.95 per barrel.

The London and New York markets started the day on Friday taking a hesitantly near to steady stance, with the markets struggling to remain close to par in thin and lacklustre trade into the early afternoon. The afternoon however brought with it the negative influences of negative track of the overall macro commodity index which triggered the funds and the speculative sectors of both markets to start selling in volume and to trigger sell stops, to accentuate the losses. The London market did however manage to bounce off the lows later in the day and make a partial recovery from the unexpected liquidation within the market, while the New York market took a sideways soft track for the rest of the day’s trade. The London market ended the day on a soft note and with 60.5% of the losses of the day intact, while the New York market ended the day having shed 4.53% in value on a very soft note and with 87% of the earlier losses of the day intact. This was a dismal close and one that does little to inspire and especially so as it is accompanied by the charts tending to the negative, but one might expect to see something of a hesitant and cautious steady start for the markets in early thin trade today, against the prices set on Friday, as follows:

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

SEP 1619 – 20                                  SEP    121.90 – 5.75
NOV 1642 – 23                                DEC   126.45 – 6.00
JAN 1659 – 24                                 MAR  130.00 – 5.95
MAR 1678 – 26                               MAY  132.20 – 5.90
MAY 1701 – 25                                 JUL  134.35 – 5.80
JUL 1722 – 24                                   SEP  136.35 – 5.80
SEP 1743 – 22                                  DEC  139.15 – 5.75
NOV 1763 – 19                                MAR 141.85 – 5.85
JAN 1784 – 17                                 MAY 143.55 – 5.85
MAR 1799 – 17                                 JUL 145.15 – 5.85