There was however a report from the coffee trade house Ecom which joined a host of other recent 50 million bags plus new crop forecasts for Brazil, with the report and with the harvest now in progress, raising their earlier forecast for a new crop by 4.12% to a new figure of 51.8 million bags. This report adding weight to the generally accepted perspective, that the new Brazil crop is indeed well in excess of 50 million bags and is therefore, only a very modest deficit crop and one that shall be easily countered by the still relatively good carryover stocks into the new crop.

In terms of the medium term market and with the potential for rising volumes of Vietnam and Central American stocks to come forth to the market during the third quarter of this year and ahead of their new crops that start being harvested during the fourth quarter of the year, one cannot really foresee any reason to take a positive view towards the coffee markets. As in the meantime there is a better than initially expected new Brazil crop now coming to the market and alongside relatively good supply of fine washed arabica coffees from Peru and the new Colombian Mitaca crop and a larger new robusta coffee crop from Indonesia.

There are however unforeseen potential hurdles in front of the market, which are related to the present frost season in Brazil that shall continue to threaten until the end of July and the uncertainty of the start of the next spring and summer rain season for Brazil, which shall need to be good rains to support the early forecasts for a 60 million bags plus 2016 Brazil crop. These hurdles are however not yet seen to be serious as it has been twenty one years since there were any significant frosts experienced within the southern Brazil coffee districts and with the El Nino seemingly in play, it is a phenomenon that traditionally brings with it improved rains for south eastern Brazil.

The arbitrage between the markets has narrowed yesterday to register this at 50.02 usc/Lb., while this equates to an attractive 38.66% price discount for the London robusta coffee market. This arbitrage continues to inspire some degree of consumer market roaster interest in robusta coffees, which assist to take some of the bite out of the comparative firm arabica coffee prices.

However with the arbitrage no longer as attractive as it has been in recent months, while the overall market prices are significantly softer, the inspiration to use more robusta coffee in blends is on the wane. Nevertheless money is money and especially so within the growing market share for single serve capsule coffee offerings that are by nature of the related machines high pressure extraction being robusta coffee friendly, one might comment that robusta coffees are no longer mostly related to the manufacture of soluble coffees.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,552 bags yesterday; to register these stocks at 2,127,212 bags. There was meanwhile a larger in volume 3,872 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 54,513 bags.

The commodity markets mixed and overall sideways in nature, ahead of the report from the U.S. Federal Reserve yesterday evening in European time. This report finally coming forth with the news that it is business as usual and that it is now unlikely that the U.S.A. shall decide on raising the dollar interest rates until their September meeting. The Sugar, Wheat, Corn and Soybean markets had a day of buoyancy, while the Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper, Orange Juice, Gold, 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 0.01% lower to see this Index registered at 420.18. The day starts with the U.S. Dollar tending softer and selling at 1.581 to Sterling and 1.136 to the Euro, while North Sea Oil is steady in early trade and is selling at 60.55 per barrel.

The London and New York markets started the day yesterday with early buoyancy, within an environment of thin trade. However this was short lived and both the markets entered the afternoon’s trade taking a softer track, but while the New York market started to lose some more weight and set the market on a steady downside track, the London market managed to show a degree of only marginal softness for the prompt months of the exchange. The London market continued on a generally sideways track and to end the day on a marginally softer note and with only 21.1% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 96.3% of the losses of the day intact. The post Federal Reserve news softer U.S. dollar might be marginally supportive for the markets, but one might not expect to see much better than a steady start for the markets in early trade today against the prices set yesterday, as follows:

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

JUL 1806 + 13                             JUL   126.65 – 2.70
SEP 1750 – 4                               SEP   129.40 – 2.60
NOV 1765 – 6                             DEC  133.10 – 2.55
JAN 1779 – 10                            MAR 136.75 – 2.55
MAR 1799 – 12                          MAY 139.00 – 2.50
MAY 1817 – 14                            JUL 140.90 – 2.45
JUL 1835 – 14                              SEP 142.40 – 2.40
SEP 1856 – 15                             DEC 144.35 – 2.45
NOV 1875 – 16                           MAR 146.45 – 2.50
JAN 1898 – 16                            MAY 147.90 – 2.55