The respected Brazilian analysts Safras & Mercado who have forecast that the new Brazil coffee crop shall total 60.5 million bags, have reported that with the conilon robusta coffee harvest over, that so far 92.56% of the new crop harvest has been completed. In this respect they estimate the 88% of the new Brazil arabica coffee crop is now harvested, with a further 6 million bags of arabica coffee still to be harvested.

In the meantime, and following some unseasonal rains this month and with more rains forecast for south east Brazil over the coming days, there has already been some flowerings towards the new crop reported. This has brought to the fore some fears being voiced that without follow on nearby rains that some of these flowerings might abort and damage the potential for the next 2019 coffee crop, but these are countered by speculation that the ground water retention levels are mostly sufficient enough, for the trees to carry these flowers.

With the new crop harvest on the horizon that National Coffee Association in Guatemala Anacafé have voiced their fears that with this crop now focused upon the prevailing soft reference prices of the New York arabica coffee market, that farmers shall struggle to finance their usual numbers of labour for this harvest. In this respect criticising their government for not doing enough to assist to support the countries coffee farming industry, so as to counter the negative effects of the soft international coffee prices.

The trade in Vietnam and with the new crop cherries maturing towards the start of the new crop harvest in October are presently talking about a bumper new crop of mostly robusta coffees, which might exceed 30 million bags. This perception of a further large new crop to come, impacting upon the bearish sentiment within the coffee markets at present and negating any market support that might have come from the reports of crop damaging rains in south west India.

In terms of the excessive monsoon rains over the coffee districts in south west India the Coffee Exporters Association of India have speculated that the damage to the coffee farms and in the form of landsliedes and cherry drop, might cause losses of in excess of 1 million bags of the potential crop, for the forthcoming October 2018 to September 2019 coffee year. While in terms of coffee deliveries from the present coffee stocks, they estimate that as much as 333,000 bags of contracted coffee exports have been delayed by the disruption to internal market transport infrastructure.

The November 2018 to December 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 32.06 usc/Lb., while this equates to 31.59% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 10,630 bags yesterday; to register these stocks at 2,162,825 bags. There were meanwhile a larger in number 12,870 bags decrease in the number of bags pending grading for this exchange; to register these pending grading stocks at 191,085 bags.

The commodity markets encountered a degree of buoyancy for the U.S. dollar yesterday, to see the overall macro commodity index taking a softer track for the day. The Natural Gas, New York arabica Coffee, Cocoa and Orange Juice markets nevertheless ended the day on a positive note and the Oil markets were relatively steady for the day, while the Sugar, London robusta Coffee, Cotton, Copper, Wheat, Corn, Soybean, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.37% lower; to see this index registered at 398.23. The day starts with the U.S. Dollar near to steady and trading at 1.282 to Sterling, at 1.157 to the Euro and with the dollar buying 4.114 Brazilian Real, while North Sea Oil is steady and is selling at US$ 74.30 per barrel.

The London and New York markets started the day yesterday on a steady note and with the London market moving into positive territory and the New York market into modest negative territory, for the early afternoon trade. As the afternoon progressed the London market started to falter and to move back into negative territory, while the New York market started to attract support and to move back up into positive territory and to set the markets for a mixed close for the day.

The London market ended the day on a very negative note and with 89.5% of the earlier losses of the day intact, while the New York market ended the day on a positive note and with 28.6% of the earlier gains of the day intact. This close did though come with the New York market having lost the greater part of its gains in late trade and encounters a soft Brazil Real, which is unlikely to inspire confidence and to most probably set the markets for only 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.

SEP 1614 – 23                                                SEP 97.20 + 0.80
NOV 1531 – 17                                              DEC 101.50 + 0.60
JAN 1522 – 14                                                MAR 104.80 + 0.55
MAR 1532 – 13                                              MAY 107.15 + 0.50
MAY 1547 – 14                                               JUL 109.55 + 0.45
JUL 1563 – 13                                                SEP 111.90 + 0.45
SEP 1580 – 12                                                DEC 115.35 + 0.45
NOV 1594 – 13                                               MAR 118.75 + 0.45
JAN 1604 – 15                                                MAY 120.80 + 0.45
MAR 1616 – 15                                               JUL 122.60 + 0.45