Coffee Traders' Forum - A Discussion about Coffee Futures Trading


Coffee Traders Discussion Forum

Coffee Traders' Forum

SCASA

August 03 2017

The National Coffee Institute of Honduras have reported that the country’s coffee exports for the month of July were 381,169 bags or 94.53% higher than the same month last year, at a total of 784,376 bags. This higher number the Coffee Institute reports, has contributed to the countries cumulative coffee exports for the first ten months of the present October 2016 to September 2017 coffee year to being 1.9 million bags or 40.43% higher than the same period in the previous coffee year, at a total of 6.6 million bags.

This is a phenomenal performance from a country of only 112,492 square kilometres and 5.06% smaller than Malawi, in that Honduras now has an arabica coffee production that is only approximately 10% lower than the arabica coffee production of the entire continent of Africa. Perhaps with Africa most certainly blessed with expansive lands that are conducive to the production of arabica coffees, an indication of the future potential for African arabica coffee production, once the African coffee farmers can work on improved farm husbandry and increased yields.

One might further comment, that the same might be said in terms of African robusta coffee production, with the example of Vietnam that has a land mass only 8.75% less than the Ivory coast, but produces approximately 325% more robusta coffee than the robusta coffee production of the African continent. But one might think that Africa the origin of the world’s coffee still has some decades to go, before it can recover its inherited prominence in terms of the continents market share of global coffee production.

The Colombian Coffee Federation have reported that the country’s coffee production for the month of July was 271,000 bags or 24.59% higher than the same month last year, at a total of 1,373,000 bags. This has contributed to the countries cumulative production for the first ten months of the present October 2016 to September 2017 coffee year to being 326,000 bags or 2.77% higher than the same period in the previous coffee year, at a total of 12,112,000 bags.

In terms of coffee exports from Colombia the Coffee Federation have reported that the country’s coffee exports for the month of July were 524,000 bags or 108.49% higher than the same month last year, at a total of 1,007,000 bags. This contributes to the countries cumulative exports for the first ten months of the present October 2016 to September 2017 coffee year to being 1,183,000 bags or 11.83% higher than the same period in the previous coffee year, at a total of 11,180,000 bags.

One has to comment though that while this export performance from Colombian and despite a unseasonal rain related delay in the interim Mitaca crop for many Colombian coffee districts is an impressive figure, that during July last year the country experienced a six weeks truckers strike, which significantly reduced the country’s export potential for the month of July 2016. The production and export figures for the year so far, would indicate that Colombia is still on track for a production of close to 15 million bags for this coffee year and exports that shall exceed those of the October 2015 to September 2016 coffee year, with were reported at 12,291,000 bags.

The November to December contracts arbitrage between the London and New York markets broadened yesterday, to register this at 47.06 usc/Lb., while this equates to a 32.69% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 2,985 bags yesterday; to register these stocks at 1,556,892 bags. There were meanwhile a larger in number 8,247 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 21,609 bags.

The commodity markets and with a weaker U.S. dollar in play, were generally on the upside for the day yesterday, to see the overall macro commodity index taking a positive track for the day. The Oil, Natural Gas, Cocoa, Coffee, Cotton, Copper, Orange Juice, Corn and Soybean markets had a day of buoyancy, while the Sugar, Wheat, Gold and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.75% higher, to see this Index registered at 410.04. The day starts with the U.S. Dollar steady and trading at 1.323 to Sterling and at 1.185 to the Euro, while North Sea Oil is near to steady and is selling at $ 52.00 per barrel.

The London market started the day yesterday on a positive note, while the New York market started the day on a steady note and soon joined the London market within positive territory, into the early afternoon trade. As he afternoon progressed and with some positive influence coming from the buoyancy of the overall macro commodity index, both markets started to attract support and with buy stops being triggered, to accentuate the gains. The markets did however attract some profit taking and producer price fixation selling at the highs, but with both markets nevertheless taking a positive track through to the close of play for the day.

The London market ended the day on a positive note and with 80% of the earlier gains of the day intact, while the New York market likewise ended the day on a positive note and with 77.3% of the earlier gains of the day intact. This positive close assists to build confidence and to paint something of a positive picture for the charts, but one might expect to see some caution and only a steady start for early trade today against the prices set yesterday.