coffee markets fundamental new Brazil arabica coffee crop quality : The coffee markets continued yesterday to defy the lack of strong supportive fundamental news behind the markets as while there are some new Brazil arabica coffee crop quality fears and further fears that the last quarter of this year might bring with it La Nina phenomenon damaging weather in the form of excessive rains for Colombia and Indonesia and likewise further afield potentially damaging dry weather conditions for South East Brazil, the quality issue is questionable in volume and for the present the La Nina is a mild threat rather than fact and cannot be realistically seen to be reason to confirm any threat of tightening coffee supply for the coming year.
Thus while the charts have been developing a positive picture for the markets over the recent weeks and have supported strong speculative and fund support for the New York and London markets, one has to consider that once exhaustion sets in to halt to the present bull run for the markets that once again came with a degree of aggression yesterday, might well not only trigger a profit taking correction but bring with it aggressive catch up producer price fixation selling and stop loss speculative profit taking selling. This has the potential to be quite an aggressive correction, but not to the same extent as has been the positive correction for the markets over the past two months.
In terms of weather and following the small scare over the threat of frost to the southern arabica coffee districts in Brazil last month, the most vulnerable to frost damage full moon period comes around again next week, with the full moon due in a week’s time on Tuesday 19th. July. However for the present the long range weather forecasts do not indicate any chance for especially cold and potentially freezing weather due for the rest of this week and for next week, which should side line any chance of fears of frost damage for the coffee farms and their potential for the follow on 2017 Brazil arabica coffee crop.
The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 66.34 usc/Lb., while this equates to a 44.43% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, continues to inspire support for the robusta coffee sector of the industry.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 540 bags yesterday; to register these stocks at 1,297,892 bags. There was meanwhile a similar in number 465 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 9,040 bags.
Thus while the charts have been developing a positive picture for the markets over the recent weeks and have supported strong speculative and fund support for the New York and London markets, one has to consider that once exhaustion sets in to halt to the present bull run for the markets that once again came with a degree of aggression yesterday, might well not only trigger a profit taking correction but bring with it aggressive catch up producer price fixation selling and stop loss speculative profit taking selling. This has the potential to be quite an aggressive correction, but not to the same extent as has been the positive correction for the markets over the past two months.
In terms of weather and following the small scare over the threat of frost to the southern arabica coffee districts in Brazil last month, the most vulnerable to frost damage full moon period comes around again next week, with the full moon due in a week’s time on Tuesday 19th. July. However for the present the long range weather forecasts do not indicate any chance for especially cold and potentially freezing weather due for the rest of this week and for next week, which should side line any chance of fears of frost damage for the coffee farms and their potential for the follow on 2017 Brazil arabica coffee crop.
The September to September contracts arbitrage between the London and New York markets broadened yesterday, to register this at 66.34 usc/Lb., while this equates to a 44.43% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, continues to inspire support for the robusta coffee sector of the industry.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 540 bags yesterday; to register these stocks at 1,297,892 bags. There was meanwhile a similar in number 465 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 9,040 bags.
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