Coffee Traders' Forum - A Discussion about Coffee Futures Trading


Coffee Traders Discussion Forum

Coffee Traders' Forum

SCASA

Coffee Market Report
January 04 2018

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of December was 231,000 bags or 17.51% higher than the same month in the previous year, at a total of 1,550,000 bags. This has contributed to the countries cumulative production for the first three months of the present October 2017 to September 2018 coffee year to be 440,000 bags or 10.08% lower than the same period in the previous coffee year, at a total of 3,927,000 bags.

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of December were 101.000 bags or 6.87% lower than the same month in the previous year, at a total of 1,370,000 bags. This has contributed to the countries cumulative coffee exports for the first three months of the present October 2017 to September 2018 coffee year to be 274,000 bags or 6.91% lower than the same period in the previous coffee year, at a total of 3,694,000 bags.

This dip in both production and exports over the past three months in Colombia is seemingly more related to the slow start over the early months of new main crop harvest, which was influenced by some heavy rains for many leading coffee district, as this new crop is now picking up in volumes. Thus, if it is only this factor and that ripe cherry volumes are due to increase this month and through into next month, one might expect to see some catch up in production volumes due to come to the fore. Noting that the evidence of lower volumes of exports out of Colombia over the past few months, have created any fears of tighter arabica coffee supply and have not had any impact upon sentiment within the still relatively soft in price New York market.

The National Coffee Institute of Costa Rica have reported that the country’s coffee exports for the month of December were approximately 22,500 bags or 72% higher than the same month last year, at a total of 53,805 bags. This has contributed to the countries cumulative coffee exports for the first three months of this new October 2017 to September 2018 coffee year to be approximately 16,300 bags or 19% higher than the same three-month period in the previous coffee year, at a total of 102,139 bags.

The National Coffee Institute of Honduras have reported that the country’s coffee exports for the month of December were 127,432 bags or 33.98% higher than the same month last year, at a total of 502,486 bags. This has contributed to the countries cumulative coffee exports for the first three months of this new October 2017 to September 2018 coffee year to be approximately 175,054 bags or 29.72% higher than the same three-month period in the previous coffee year, at a total of 764,052 bags.

The March 2018 to March 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 49.90 usc/Lb., while this equates to 38.8% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 5,119 bags yesterday; to register these stocks at 1,979,380 bags. There was meanwhile a larger in number 7,980 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 53,535 bags.

The commodity markets had another mixed day yesterday, but with many markets retaining buoyancy and to see the overall macro commodity index taking a positive track for the day. The Oil, London robusta Coffee, Cotton, Orange Juice, Wheat, Soybean, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Sugar, Cocoa, New York arabica Coffee, Copper and Corn markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3% higher; to register this index at 426.14. The day starts with the U.S. Dollar steady and trading at 1.352 to Sterling, at 1.203 to the Euro and 3.237 to the Brazilian Real, while North Sea Oil is showing a degree of buoyancy is selling at US$ 68.75 per barrel.

Firstly, we apologise for the fact that in yesterday’s report, that the changes but not the prices for the London market were changed. The London market started the day yesterday with immediate buoyancy, while the New York market started off the day on a more cautious steady note, but to soon drift back into negative territory and with the London market following suit, and drifting back to par and the markets retaining this mixed stance into the early afternoon trade. As the afternoon progressed the London market remained close to par and the New York market in negative territory, but with the New York market attracting support and bouncing back into positive territory and with the London market following suit and with both markets posting reasonable gains. This was however short lived and the markets soon hit a ceiling and with the London market retreating to post only modest gains for the day, while the New York market slipped back into negative territory.

The London market nevertheless ended the day on a modestly positive note and with only 20% of the earlier gains of the day intact, while the New York market ended the day on a negative note and with 80% of the earlier losses of the day intact. This close and especially the faltering nature of the New York market that indicates a drying up of speculative and fund short covering activity does not inspire much in the way of confidence and one might expect little better than a near to steady start for early trade today, against the prices set yesterday.