Market Reports Blog / Market Reports / Coffee Market Report 27th to 31st January 2014

Coffee Market Report 27th to 31st January 2014

COFFEE MARKET NEWS 27th January – 31st January 2014

 

Coffee Prices, Futures and Currency close levels:

 

Monday

Tuesday

Wednesday

Thursday

Friday

NY Mar-14 c/lb

113.85

114.65

117.10

120.00

125.20

Lon Mar-14 $/t

1719

1721

1744

1774

1811

£/$

1.6570

1.6569

1.6583

1.6481

1.6453

Futures Markets:

Arabica: A sudden rise in arabica futures, coupled with concern about dry weather damaging Brazil’s coffee harvest, sparked short cover purchasing in Europe’s cash coffee market this week, traders said on Friday. New York showed that the net Fund exposure added 3,278 lots to the short increasing the position to 15,668 referring to the Supplemental report. Over 4,200 fresh shorts came to the market. Over the week the board was only 155 points lower but the open position increased a hefty 5,321 lots! Arbitrage values narrowed 240 points during the week towards 36.50 cents which was the lower end of the recent range. Hedge positions covered 2,611 lots from their net short as industry took on and replaced cover leaving the net short at 45,898.

Robusta: London took full advantage of the New York rally with Funds building longs throughout January. The Fundamental base has been strong for Robusta with dangerously low exchange stocks and little if any evidence of coffee building stock in non-certified warehouses as arrivals move directly into industry. Last week’s rally has taken the board into heavy option territory in both March and May activating a large number of Call options which need to be watched when the pattern changes.

Currency: On the FX markets, the euro came under pressure following the low inflation data with EUR/USD dipping to $1.3478 while GBP/EUR rose to €1.2213. As the Chinese celebrate New Year, USD/CNY is trading at 6.03, close to the psychologically important 6.00 level where Chinese exporters may look to review their USD pricing.

Physical Markets:

Brazil: The very dry and warm January made some Brazilian exporters and producers reduce the outlook for the next crop – expecting lower yields. Other comments are that soil moisture levels are high and the trees have not suffered, yet, and if all “normal” from here there would not be much reason for concern.

Colombia: Colombia's coffee farmers have slowed sales of beans while the government devises new rules for a suspended subsidy program, pushing up the premium paid for beans from the mild arabicas grower, the coffee exporter association said on Friday. The slowdown in sales comes after months of unusually active selling from Colombia following the country's best crop in six years. That flurry had forced competitors in Central America to lower their prices.

Central America: Differentials for Central American beans also rose again as the crop disease roya tightened supplies, traders said. "Low supplies from Central America because of the roya problem met increased demand this week and differentials rose, sometimes sharply," a trader said. Roya, also known as coffee leaf rust, has spread rapidly across Central America and southern Mexico since last season, decimating crops.

Kenya: The top price of Kenya's benchmark coffee grade firmed up by 15% per 50-kg bag at auction on Tuesday from the last sale two weeks ago, the Nairobi Coffee Exchange (NCE) said. A total 19,240 bags were offered, with 6,963 sold, compared with 15,200 bags offered and 4,305 sold at the previous auction. Local governments in Kenya's coffee-growing areas had declined to issue transport permits to coffee marketing agents, and demanded a say in deciding to whom farmers can sell their coffee, stalling the auction.

Indonesia: Robusta coffee bean exports from Indonesia's main growing area in Sumatra rose 15 percent to 8,299.19 tonnes in January from a year earlier, government trade data showed on Monday. Indonesia shipped 7,210.93 tonnes of robusta in the same month a year earlier and 22,425.74 tonnes in December. The Southeast Asian nation exported a total of 355,771.23 tonnes in 2013, up more than 80 percent from the 197,421.89 tonnes exported in 2012.

India: Indian coffee prices rose at a weekly auction due to firm international leads, and export demand. About 89,000 kg of coffee from the total 287,484 kg on offer were sold. Arabica coffee accounted for 162,272 kg, while robusta made up 125,212 kg. Coffee exports from India jumped to 86,015 tonnes from Oct. 1 till Jan. 30, compared with 64,480 tonnes in the same period last year.