coffee market outlook report today october 29 2015: Following some rains this week and with more rains due to move into the main South Eastern coffee districts in Brazil over the weekend and for the first half of next week, the issue of Brazil weather is no longer a factor for the short term coffee markets. While the dry start for this month that had initially fuelled much speculation over possible damage to the potential for the prospects of the next 2016 crop, has disappeared from the coffee press.
Thus with the Brazil weather news to the side and so far despite the El Nino phenomenon in play within the Pacific Ocean and its potential to bring difficult dry weather to the Pacific rim coffee producing countries, there is for the present little in the way of concerning news coming to the relatively soft coffee markets. Rather focus is for the short term upon the prospects for larger new Vietnam and Colombian main crops that have already started, along with the larger new overall Mexico and Central American crops that are already starting within the lower regions of this latter producer bloc. Thus for the present, the issues of global coffee supply are not a concern, as there is soon due to be a surge of new crop coffee supply due to impact upon the consumer markets.
There are nevertheless some longer term concerns still within the market over what impact the El Nino might have upon the prospects for next year’s new Indonesian coffee crop and likewise, for the mid-year Mitaca coffee crop in Colombia. Already there has been comment over the potential for the Colombian Mitaca crop to suffer from the drier weather and more modest flowering and to be somewhat smaller, while the drier weather in Indonesia has already fuelled speculation that the country’s coffee crop shall be more modest in the coming year. One would think in terms of these relatively prominent coffee producing countries and the likewise potential for the El Nino to impact upon next year’s new Peru crop that it has to provide for a speculative support base for the markets that shall limit the downside for the markets for the medium term, albeit that the prospects for the El Nino to bring with it increased rains for South East Brazil does underpin the possibility for a good Brazil crop in the coming year.
The second month arbitrage between the markets broadened yesterday, to register this at 50.92 usc/Lb., while this equates to a 41.58% 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 1,308 bags yesterday; to register these stocks at 1,900,683 bags. There was meanwhile a larger in volume 6,605 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 55,641 bags.
The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 667 bags on Tuesday 27th. October; to register these stocks at 3,356,833 bags on the day.
Thus with the Brazil weather news to the side and so far despite the El Nino phenomenon in play within the Pacific Ocean and its potential to bring difficult dry weather to the Pacific rim coffee producing countries, there is for the present little in the way of concerning news coming to the relatively soft coffee markets. Rather focus is for the short term upon the prospects for larger new Vietnam and Colombian main crops that have already started, along with the larger new overall Mexico and Central American crops that are already starting within the lower regions of this latter producer bloc. Thus for the present, the issues of global coffee supply are not a concern, as there is soon due to be a surge of new crop coffee supply due to impact upon the consumer markets.
There are nevertheless some longer term concerns still within the market over what impact the El Nino might have upon the prospects for next year’s new Indonesian coffee crop and likewise, for the mid-year Mitaca coffee crop in Colombia. Already there has been comment over the potential for the Colombian Mitaca crop to suffer from the drier weather and more modest flowering and to be somewhat smaller, while the drier weather in Indonesia has already fuelled speculation that the country’s coffee crop shall be more modest in the coming year. One would think in terms of these relatively prominent coffee producing countries and the likewise potential for the El Nino to impact upon next year’s new Peru crop that it has to provide for a speculative support base for the markets that shall limit the downside for the markets for the medium term, albeit that the prospects for the El Nino to bring with it increased rains for South East Brazil does underpin the possibility for a good Brazil crop in the coming year.
The second month arbitrage between the markets broadened yesterday, to register this at 50.92 usc/Lb., while this equates to a 41.58% 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 1,308 bags yesterday; to register these stocks at 1,900,683 bags. There was meanwhile a larger in volume 6,605 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 55,641 bags.
The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 667 bags on Tuesday 27th. October; to register these stocks at 3,356,833 bags on the day.
The London market started the day on a near to steady note yesterday, while the New York market started the day with modest buoyancy. The London market soon recovered and the New York market shrugged off a short early afternoon dip into negative territory and with both market starting to take a positive track as the afternoon progressed and with the New York market seemingly gaining some assistance from the positive nature of the macro commodity index. Both markets continued to maintain their positive stance for the rest of the day’s trade and through to the close, with light industry buying support possibly returning to the field of play in line with the stalling of the recent days of steady decline. The London market continued to end the day on a positive note and with 85.7% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note and with 71.2% of the earlier gains of the day intact. This positive close is somewhat constructive for sentiment and might well assist to inspire a steady start for early trade today against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
NOV 1540 + 14 DEC 119.10 + 1.80
JAN 1577 + 18 MAR 122.45 + 1.85
MAR 1590 + 20 MAY 124.50 + 1.80
MAY 1609 + 19 JUL 126.45 + 1.80
JUL 1629 + 20 SEP 127.35 + 1.80
SEP 1649 + 20 DEC 131.10 + 1.80
NOV 1668 + 19 MAR 133.75 + 1.80
JAN 1686 + 17 MAY 135.45 + 1.80
MAR 1706 + 17 JUL 136.90 + 1.75
MAY 1731 + 13 SEP 138.30 + 1.80
JAN 1577 + 18 MAR 122.45 + 1.85
MAR 1590 + 20 MAY 124.50 + 1.80
MAY 1609 + 19 JUL 126.45 + 1.80
JUL 1629 + 20 SEP 127.35 + 1.80
SEP 1649 + 20 DEC 131.10 + 1.80
NOV 1668 + 19 MAR 133.75 + 1.80
JAN 1686 + 17 MAY 135.45 + 1.80
MAR 1706 + 17 JUL 136.90 + 1.75
MAY 1731 + 13 SEP 138.30 + 1.80
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