Market Reports Blog / Market Reports / Coffee Market Report 23rd November to 27th November 2015

Coffee Market Report 23rd November to 27th November 2015

COFFEE MARKET NEWS Week Ending: 27th Nov 2015

 

23thNov

24thNov

25thNov

26th Nov

27thNov

NYC

122.45

124.50

125.55

125.55

123.60

LIFFE

1539

1550

1532

1518

1514

 GBP/USD

1.5123

1.5079

1.5125

1.5098

1.5041

 

 

 

 

 

 

Eyes on the Prize: Colombia eyes up a 16m bag crop by 2018!

NYC:

It has been a distorted week with the US markets closed on Thursday and people out on Friday despite the market being open. During the week, Arabica prices paused the recent advance, consolidating between 121 and 126 cents per pound. Rains in Brazil tended to normalize as well.

LIFFE:

November expires today and the Jan contract slowly decreased in value over the week.

Currency:

GBP/USD:

The sterling dollar exchange rate did not see much movement last week. Noises emanating from over the pond would suggest that an increase in the fed funds rate is imminent and that should help keep the dollar supported. The Pound is currently trading just above psychological support of 1.5000 and it would not be a surprise if this is tested in the near future.

GBP/EUR:

Sterling Euro has consolidated for the most part of the week despite breaking the steep uptrend. The currency pair was buoyed after George Osborne increased the government’s forecast for UK growth next year in his recent report and also by indications that an unnamed ECB member who suggested that ECB policy makers were thinking about widening the scope of their bond buying program or implementing a two-tier penalty charge on banks that leave cash with the central bank.

Origins:

Colombia:

Bumper crop? Wages? Fears of the impacts of El Niño have not been realised as US officials have predicted productions levels to hit a 23 year high. The ‘severe drought’ forecast by many commentators failed to fully materialise and ‘mild’ drought conditions could bring benefits in curbing the spread of Roya, and enhancing yields. However, there are indications that El Nino drought conditions may worsen in 2016. Interestingly, wages seem to be growers’ biggest concern at the moment. Rising wages, which historically accounted for 40% of production costs, has risen to upwards of 60% due to the agricultural labour shortage and a higher minimum wage.

Uganda:

Erratic weather is damaging crop production and encouraging pests and diseases, whilst bringing erratic but intense rains that erode fertile earth. Consequently, harvests have become unpredictable. Uganda's coffee exports in October dipped 2.4 percent year on year due to unfavourable weather conditions, the state-run sector regulator said on Friday. Uganda exported 223,858 60-Kg bags of coffee in October, slightly down from 229,438 bags exported in the same period last year, the Uganda Coffee Development Authority (UCDA) said.

"The month was characterized by heavy rains and sometimes hailstorm evenly distributed throughout most districts," said a UCDA report. "This has affected coffee drying operations."

Vietnam:

Physical output up, prices down. Trading in Vietnamese coffee has not picked up as weak global markets pulled down prices in the world's top Robusta producer, curbing sellers' willingness to unload beans, traders said on Tuesday.

An upward revision of Vietnam's 2015/2016 coffee output by a U.S. Department of Agriculture attaché in Vietnam has also put downward pressure on prices.

Foreign firms, which have been slow in buying Vietnamese beans partly because of the country's huge carryover stocks, will not rush for new purchases given a larger crop is arriving, traders said.

Vietnam's 2015/2016 coffee output is revised up by 2.4 percent from a previous forecast to 29.3 million bags due to adequate water supply, a U.S. Department of Agriculture attaché in Vietnam said.

In other news…

Coffee price to rise in 2016? Rabobank think so. ‘Arabica coffee futures will make a stronger start to 2016 than investors are pricing in, boosted by dryness concerns which have enhanced the prospects of a "tight physical market" for beans…’ Rabobank said. Read more here.