Reports out of Central America and Southern Mexico indicate that the summer rain season has so far been a bit erratic and it is difficult as of yet, to truly assess the potential from the new crop flowerings for the region and likewise, to forecast the next October 2019 to March 2020 new crop. But meanwhile there are reported to be good volumes of unsold coffee stocks from the past crop still in hand, as price resistance to the relatively low prices that are being dictated by the soft reference prices of the New York market have retarded new crop export selling activity.

There is meanwhile much speculation over the potential of the forthcoming crop from Mexico and Central America, as many foresee that the low income from the present crop sales shall force many farmers to reduce their farm inputs and including fertilisers that are necessary to support normal yields. Added to this, some speculate that some farmers might be inspired to prune coffee trees so as to reduce input requirements, which would result in a further negative impact upon potential overall yields for this important fine washed arabica crop producer bloc.

Should such speculation prove to be realistic, one might guess that it may impact in the form of a two to perhaps even higher dip in production for the coming October 2019 to September coffee year. A factor which added to the approximate dip of in excess of five million bags for the overall new Brazil crop and a possible three million bags increase in global coffee consumption, shall result in a small deficit in global coffee supply for the coming coffee year. But one might guess that this factor might only come to the fore to change market sentiment in the last quarter of the year, when there shall be some more clarity on the rains in Brazil and the potential for the next 2020 Brazil coffee crop.

The Australian Government Bureau of Meteorology ENSO have reported that they still foresee a 70% chance for a new El Niño phenomenon to develop within the Pacific Ocean in the coming months, but the possibility that should it develop, that it shall be a short and weak El Niño. Thus for the present, this is not foreseen to bring to the fore threatening weather conditions for coffee producers.

Today is the Labour Day public holiday in 106 countries and including most of the major European consumer countries and along with, most of the main of the coffee producer countries. Including Brazil, Vietnam, Colombia, the Central American countries, Indonesia, India, the African coffee producers and while this does not include the U.S.A. and Great Britain and the coffee terminal markets shall remain active, it is unlikely though, that there shall be much excitement for these markets today.

The July to July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 29.33 usc/Lb., while this equates to 31.48% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 11,414 bags yesterday; to register these stocks at 2,438,728 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 10,260 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to increase by 18,167 bags or 0.93% over the week of trade leading up to Monday 29th. April, to see these stocks registered at 1,961,333 bags, on the day.

The commodity markets were mixed in trade yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Oil, Sugar, Coffee, Copper, Corn, Gold and Silver ended the day on a positive note, while the Natural Gas, Cocoa, Cotton, Orange Juice, Wheat and Soybean markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.15% lower; to see this index registered at 397.26. The day starts with the U.S. Dollar steady and trading at 1.304 to Sterling, at 1.121 to the Euro and with the US Dollar buying 3.917 Brazilian Real.

The London market started the day yesterday on a positive note and the New York market trading around par, but soon moving up to join the London market in positive territory and to see the markets taking a positive track, into the early afternoon trade. As the afternoon progressed both markets added some more value, but to hit a ceiling and renewed selling pressure, to settle back to trade towards only modest gains for the day.

The London market ended the day on a positive note and with 36.4% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 20.4% of the earlier gains of the day intact. This positive close but well of the highs of the day does not inspire much confidence and one might expect to see little better than a steady start for early trade today, against the prices set yesterday, as follows:

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

MAY 1388 + 7                                               MAY 91.85 + 0.50
JUL 1407 + 4                                                  JUL 93.15 + 0.50
SEP 1422 + 5                                                 SEP 95.45 + 0.45
NOV 1438 + 4                                               DEC 99.00 + 0.40
JAN 1456 + 4                                                 MAR 102.50 + 0.35
MAR 1475 + 4                                               MAY 104.70 + 0.30
MAY 1495 + 3                                                JUL 106.75 + 0.20
JUL 1517 + 3                                                  SEP 108.75 + 0.15
SEP 1537 + 3                                                  DEC 111.70 + 0.05
NOV 1555 + 2                                                MAR 114.65 unch