There were further weather forecasts on Friday that talked in terms of rains for the main South East Brazil coffee districts for this week and to potentially follow through over next week, which were reports that continued to dampen speculative spirits within the New York market. These rains to not only assist in the setting of the new 2016 coffee crop flowerings that came with the September rains, but to also trigger some new and additional flowerings towards this potentially larger new crop.

The Coffee Board of India have reported that the country’s coffee production and made from a close to 70 to 30 ration of robusta and arabica coffees for the just completed October 2014 to September 2015 coffee year, was a record crop of approximately 5,450,000 bags. While with the post blossom flowerings towards next year’s crop in hand, they are now forecasting an 8.75% higher new October 2015 to September 2016 crop of 5,926,667 bags. This new crop forecast being related to an approximate 69 to 31 ratio, for robusta and arabica coffees.

It is difficult to accurately calculate the domestic coffee consumption in India and its impact upon coffees available for export, as the country does allow imports of coffees for processing and re exporting in value added form. But at a guess and with a steadily growing coffee shop culture, one might think of the country consuming approximately 2.5 million bags per annum which would allow in terms of apparently increasing production, for still healthy volumes of exports for this new coffee year. Albeit that with the influence of imports for re-export the Coffee Board of India have reported exports for the just completed October 2014 to September 2015 coffee year to have been 0.89% lower than the previous coffee year, at a total of 5,008,700 bags.

The second month arbitrage between the markets narrowed on Friday, to register this at 51.13 usc/Lb., while this equates to a 41.98% 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 in more volume upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 5,633 bags on Friday; to register these stocks at 1,904,953 bags. There was meanwhile a similar in volume 5,750 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 46,669 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 34,667 bags on Thursday 22nd. October; to register these stocks at 3,361,667 bags on the day.

The commodity markets were in receipt of some positive news in the form of lowering Chinese interest rates on Friday, which was accompanied by the news that the Chinese authorities were meeting to develop a new five year economic stimulus plan that would strive to maintain 7% plus growth figures for the country. This news was however not sufficient to buoy overall confidence and the overall macro commodity index ended the week taking a softer track, with most markets remaining below par for the day. The Orange Juice market nevertheless had a steady day’s trade, while the Oil, Natural Gas, Sugar, Cocoa, Coffee, Cotton, Cotton, Copper, Wheat, Corn, Soybean, 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 0.88% lower to see this Index registered at 400.02. The day starts with the U.S. Dollar showing a degree of early buoyancy and trading at 1.533 to Sterling and 1.104 to the Euro, while North Sea Oil is steady in early trade and is selling at 46.75 per barrel.

The London market and New York markets started the day on Friday with a degree of hesitant buoyancy at just below par, but while the New York market did manage to add some modest value and move above par the London market retained its marginally softer track. The afternoon brought with it the further reports of rain from Brazil and accompanied by the softening nature of the overall commodity index, which saw the New York market losing its way and accompanied by the London market and with both markets dropping back into a softer trading range. Trade was however lacklustre and mostly thin for both markets, with the markets taking an erratic and softer sideways track for the rest of the day’s trade. The London market continued to end the day on a soft note and with 82.4% of the earlier losses of the day intact, while the New York market ended the day on a likewise soft note and with 62.8% of the earlier losses of the day intact. This relatively dismal close and with the market charts pointing softer is unlikely to inspire confidence and one might expect to see little better than a hesitantly near to steady start for early trade today against the prices set yesterday, as follows:

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

NOV 1527 – 35                                        DEC    118.45 – 1.40
JAN 1558 – 28                                         MAR   121.80 – 1.35
MAR 1571 – 28                                       MAY   124.00 – 1.30
MAY 1591 – 28                                         JUL   125.95 – 1.25
JUL 1611 – 28                                           SEP    127.85 – 1.25
SEP 1630 – 29                                          DEC    130.60 – 1.30
NOV 1650 – 29                                        MAR   133.25 – 1.30
JAN 1670 – 30                                         MAY   135.05 – 1.25
MAR 1690 – 30                                         JUL   136.55 – 1.25
MAY 1725 – 30                                        SEP    137.90 – 1.25