Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Coffee Market Report
May 04 2018
The National Coffee Institute in Honduras has reported that the countries coffee exports for the month of April were approximately 138,200 bags or 14.8% lower than the same month last year, to see these exports registered at 795,570 bags. These exports they say, have contributed to the countries cumulative exports for the first seven months of the present October 2017 to September 2018 coffee year to be approximately 200,000 bags or close to 5.4% higher than the same period in the previous coffee year, at a total of approximately 4.14 million bags.
The National Coffee Institute in Honduras have meanwhile lower their forecast for coffee exports for the present coffee year, due to the impact of some adverse weather conditions. In this respect they have dropped the number from 7.7 million bags, to now anticipate exports of between 7.3 to 7.4 million bags. A volume that one might still adjudge to be impressive, for such a small country.
The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of April was 40,000 bags or 4.8% higher than the same month last year, at a total of 874,000 bags. This has contributed to the countries cumulative production for the first seven months of the present October 2017 to September 2018 coffee year to be 433,000 bags or 4.93% lower than the same period in the previous coffee year, at a total of 8,356,000 bags.
The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of April were 86,100 bags or 9.2% lower than the same month last year, at a total of 920,900 bags. This has contributed to the countries cumulative coffee exports for the first seven months of the present October 2017 to September 2018 coffee year to be 525,100 bags or 6.27% lower than the same period in the previous coffee year, at a total of 7,843,900 bags.
Reuters report that the European Coffee Federation ECF have reported that the port warehouse stocks held within reporting warehouses in the ports in Belgium, Germany, France and Italy increased by 158,150 bags or 1.48% during the month of March, to register these stocks at the end of the month at 10,849,900 bags. These stocks do not however include the unreported stocks from the industry on site inventory stocks, the transit bulk container stocks and stocks being held within non-reporting warehouses throughout Western and Eastern Europe.
This said and with the combination of West and East Europe consuming approximately 1.05 million bags of coffee a week, one might guess that the additional stocks that were not included in the report, might contribute to as much as 2.5 million bags to the reported stocks. Thus, indicating that as at the end of March, the European coffee stocks might have been close to the equivalent of close to a relatively safe, twelve weeks of Western and Eastern European roasting demand. A factor that supports the prevailing bearish sentiment, on the part of the speculative sector of the coffee markets and likewise, contributes to complacency on the part of the consumer market indistries.
The July 2018 to July 2018 contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 41.30 usc/Lb., while this equates to 33.21% 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 2,520 bags yesterday; to register these stocks at 1,998,337 bags. There were meanwhile a smaller in number 740 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 27,874 bags.
The commodity markets had a mixed day yesterday, with the overall macro commodity index taking a modestly upside track for the day. The Oil, Cocoa, Coffee, Copper, Orange Juice, Wheat, Corn, Gold and Silver markets ended the day on a positive track, while the Natural Gas, Sugar, Cotton and Soybean markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.4% higher; to see this index registered at 435.86. The day starts with the U.S. Dollar steady and trading at 1.357 to Sterling, at 1.198 to the Euro and with the dollar buying 3.528 Brazilian Real, while North Sea Oil is steady and is selling at US$ 74.05 per barrel.
The London and New York markets started the day yesterday trading close to par but to see both markets soon picking up support and to take a positive track, into the early afternoon trade. As the afternoon progressed the markets attracted support and increased their gains, but while the London market maintained reasonable support through to the close, the New York market slipped back into more modest positive territory.
The London market ended the day on a very positive note and with 85.7% of the earlier gains of the day intact, while the New York market ended the day on a positive note and with 36.4% of the earlier gains of the day intact. This close while perhaps positive for the charts and sentiment, might though bring with it a degree of caution about the evidence to the New York market having faltered later in the day. Thus we would expect to see producer selling over the London market and perhaps only a near to steady start for the markets for early trade today, against the prices set yesterday.