The more detailed Brazil coffee export figures for the month of October have been announced and with exports of green coffee for the month reported to have been 160,990 bags or 5.21% lower than the same month in the previous year, at a total of 2,928,548 bags. Add to this are the exports of value added soluble coffees calculated in terms of their green coffee equivalent and these were 31,948 bags or 12.85% higher than the same month last year, at a total of 280,516 bags.

Therefore the combined exports from Brazil for the month of October were 129,042 bags or 3.87% lower than the same month last year, at a total of 3,209,064 bags. In terms of value these exports for the month of October were 199.9 million U.S. dollars or 29.08% lower than the same month last year, at a total of 487.5 million U.S. dollars. However in terms of the presently soft Brazil Real, the value of these exports in terms of domestic currency still remain a positive factor and allow for the Brazil coffee farmers to retain some degree of profitability from their coffee sales.

The International Coffee Organisation have increased their global coffee production figure for the just completed October 2014 to September 2015 coffee year by 1.6 million bags, to now report production for this past coffee year to have been approximately 143.3 million bags. This increase they note has been mostly related to the improved performance from Colombia, but one must also keep in mind that due to the official nature of this organisation, they have to likewise include the official figures as are reported by their member producers.

Therefore with the ICO figures including the relatively conservative official figures from countries such as Brazil and Vietnam, one might look to add four to five million bags to this official ICO crop assessment. Thus with a world coffee consumption of close to 150 million bags, it would indicate only a relatively modest deficit supply over the previous coffee year and one that would have easily been covered, by the good carryover stocks into this coffee year. Albeit that the Brazil stocks are steadily being liquidated and unless there is a good Brazil coffee crop for next year, there would be a significant tightening of coffee supply for the follow on 2016 to 2017 coffee year. Albeit so far and with the Brazil weather conditions towards this next 2016 crop not proving to be a worry, the threat of Brazil tightening up coffee supply on the longer term is presently not seen to be a supportive factor for market sentiment.

The second month arbitrage between the markets narrowed yesterday, to register this at 45.86 usc/Lb., while this equates to a 38.31% 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 decrease by 2,254 bags yesterday; to register these stocks at 1,888,967 bags. There was meanwhile a larger in volume 3,482 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,971 bags.

The Certified Robusta coffee stocks held against the London exchange were seen to decline by 2,500 bags on Monday 9th. November; to register these stocks at 3,340,000 bags on the day.

The commodity markets were mixed in trade yesterday, but with many markets tending to stabilise for the day and assisting the overall macro commodity index to take a flat track for the day. The Oil, Natural Gas, Sugar, Cocoa, London robusta Coffee, Cotton and Orange Juice markets had a day of buoyancy and the Gold market was steady, while the New York arabica Coffee, Copper, Wheat, Corn, Soybean, Silver and Platinum tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.13% higher to see this Index registered at 387.41. The day starts with the U.S. Dollar steady in early trade and trading at 1.516 to Sterling and 1.076 to the Euro, while North Sea Oil is showing some modest buoyancy in early trade and is selling at 46.05 per barrel.

The London and New York markets started the day yesterday on a steady note but with the markets tending to come under some pressure in early afternoon trade, to move back to marginally below par. The markets did however recover but with the pressure above both markets the New York market slipped back into negative territory, while the London market shrugged off the negative influences and managed have a steady day. The London market continued to end the day on a marginally positive note but with only 25% of the earlier gains of the day intact, while the New York market ended the day on a soft note and with 80.5% of the losses of the day intact. This soft close for the New York market does little to inspire and one might think that the markets are due for little better than a steady to soft start for early trade today against the prices set yesterday, as follows:

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

NOV 1594 + 5                                             DEC    116.30 – 1.45
JAN 1628 + 3                                              MAR    119.70 – 1.65
MAR 1641 + 3                                            MAY    122.00 – 1.60
MAY 1661 + 3                                              JUL    124.10 – 1.55
JUL 1681 + 3                                                SEP    126.05 – 1.55
SEP 1700 + 3                                               DEC    128.95 – 1.55
NOV 1717 + 2                                            MAR    131.80 – 1.50
JAN 1731 + 2                                             MAY    133.70 – 1.50
MAR 1749 + 2                                              JUL    135.45 – 1.55
MAY 1772 + 2                                             SEP     137.10 – 1.60