Coffee Traders' Forum - A Discussion about Coffee Futures Trading


Coffee Traders Discussion Forum

Coffee Traders' Forum

SCASA

May 10 2018

The Customs authorities in Vietnam have reported that the with the April coffee exports registered at 2,594,700 bags, that this has contributed to the countries cumulative coffee exports for the first four months of the year to be 17% higher than the same period in the previous year, at a total of 11,417,800 bags. This increase in early in the year exports and following the delayed but larger new crop, was to be expected.

The Brazil Exporters Association Cecafé have reported that the cumulative green coffee exports for the first ten months of their official coffee July to June crop year stood at 23.05 million bags, which is 8.17% lower than the same period in the July 2016 to June 2017 crop year and an even more significantly 16.3% lower than the same period in the July 2015 to June 2016 crop year. The association is though confident in the prospects for a much larger new crop and one that shall include good volumes of both arabica and conilon robusta coffees, to fuel a significant increase in coffee export volumes for the forthcoming July 2018 to June 2019 crop year.

The Australian Governments Bureau of Meteorology has reported that the Pacific Ocean presently is very neutral and without any sings of either of the El Niño and La Niña phenomena’s in play, but the possibility that a new La Niña phenomenon might start to develop during the last quarter of the year. Thus for the present there are no short term weather related fears for the Pacific rim coffee producing countries, but there might if the La Niña does become a reality and strengthens by the end of the year, be some weather related fear stories starting to come to the fore to buoy year end speculative sentiment.

The July 2018 to July 2018 contracts arbitrage between the London and New York markets broadened yesterday, to register this at 39.51 usc/Lb., while this equates to 33.27% 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 1,854 bags yesterday; to register these stocks at 1,994,540 bags. There were meanwhile a larger in number 46,365 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 68,414 bags.

The commodity markets were mixed in trade yesterday but with the influential Oil markets surging for the day, the overall macro commodity index took a positive track for the day. The Oil, Natural Gas, Cotton, Orange Juice and Silver markets ended the day on a positive note, while the Sugar, Cocoa, Coffee, Copper, Wheat, Corn, Soybean and Gold markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.3% higher; to see this index registered at 435.36. The day starts with the U.S. Dollar steady and trading at 1.356 to Sterling, at 1.186 to the Euro and with the dollar buying 3.591 Brazilian Real, while North Sea Oil is showing some degree of buoyancy and is selling at US$ 78.20 per barrel.

The London market started the day yesterday on a softer note, while the New York had a steady start for the day. This was however short lived and the New York market soon slipped back to join the London market in modest negative territory and to maintain this stance, into the early afternoon trade. As the afternoon progressed the London market with increasing volumes of producer price fixation selling in play started to come under pressure and to extend it losses, while the New York market remained within more modest negative territory and with both markets ending the day near to their lows of the day.

The London market ended the day on a negative note and with 87% of the earlier losses of the day intact, while the New York market ended the day of a likewise negative note and with 94.4% of the earlier losses of the day intact. This close does not paint a good picture for the charts and does not inspire confidence, but with many of the leading European consumer markets taking their Ascension Day Public holiday today, one might expect to see only muted industry participation within the markets for the day. This might assist to bring some stability and a steady start for the markets for early trade today, against the prices set yesterday.