Market Reports Blog / Market Reports / Coffee Market report 7th September 2015 to 11th September 2015

Coffee Market report 7th September 2015 to 11th September 2015

COFFEE MARKET NEWS Week Ending: 11th Sep 2015

 

 

7thSep

8th Sep

9th Sep

10th Sep

11thSep

NYC

119.15

121.00

121.10

116.40

116.55

LIFFE

1581

1592

1604

1566

1552

 GBP/USD

1.5283

1.5395

1.5359

1.5444

1.5428

 

 

 

 

 

 

 

Decision time!

All eyes are on the Federal Open Market Committee (FOMC) interest rate decision this Thursday. The announcement has been hotly anticipated by markets for some time now. Economists are evenly split on the case for an interest rate rise.

NYC:

Losses for the week totalled 2.60 cents. The Brazilian real's collapse dragged coffee futures to 1-1/2-year lows on Thursday as the correlation between the commodity and the currency reached its highest level in years.

LIFFE:

Blocked by the 1613 resistance during recent recovery attempts, London fell away to record a bear flag and broke a weekly basis trough at 1566 to end this week on a weary note.

Currency:

The Bank of England voted 8-1 to leave interest rates unchanged. Sterling gained on the announcement as analysts viewed that the minutes showed that the monetary policy committee were slightly more hawkish than anticipated. GBP/USD saw a rebound from its low levels and extended further throughout the week. This looks to suggest that the low after the turmoil caused by the Chinese Stock market collapse has been completed. However, Sterling has been able to break through the weekly moving average over the past couple of days so a break above 1.5440 will be needed to affirm this correction. For once, we saw a relatively quiet week for the Euro. The single currency held its ground in relatively tight ranges against the dollar and the pound as markets prepare for the FED meeting next week.

Origins

Vietnam: Vietnamese coffee exporters have been seeking to sell robusta beans to free up warehouse space ahead of the 2015/2016 season and some growers have also started unloading stocks as their hope of price gains have been dashed. Many Vietnamese speculators and some wealthy farmers began stockpiling beans in late February when prices were at around 40,000 dong per kg, hoping prices would gain further. But coffee prices in Vietnam, which closely track the robusta futures market in London, have been weakening since. Growers and speculators "will be selling as the hope of price gains is over," a Vietnamese trader in Daklak said.

Indonesia: This origin could be the most affected by el Niño patterns. Lack of rainfall next year could complicate development of 2016/7 robusta crops and traders are already looking at suitable replacements. Increased  demand for Vietnamese robustas as a substitute for Indonesian supplies, could help to nudge up Vietnamese differentials, but the impact is likely to be limited because of a large carryover of old-crop Vietnamese supplies and expectations of a big Vietnamese harvest.

Brazil: The 2015-16 harvest reached 95 per cent of the 50.4 million bag crop as of the 8th of September. Usually 96 per cent of the harvest has occurred by this time of year so everything is on track. Heavy rains are expected in the coffee belt over the next five days. The region typically starts to receive more abundant spring rains in October and November but El Niño weather conditions are likely helping to push more moisture into Southern Brazil. This is good for flowering of the next crop but bad for the beans still drying and curing on open sun-baked patios, which nearly all Brazilian producers tend to use.