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Coffee Market Report 16th to 20th September 2013

Coffee Prices, Futures and Currency close levels:

 

Monday

Tuesday

Wednesday

Thursday

Friday

NY Dec-13 c/lb.

119.25

114.95

114.90

115.80

114.65

Lon Nov-13 $/t

1730

1681

1680

1687

1678

£/$

1.5906

1.5907

1.5968

1.6031

1.6022

 

Futures Markets:

 

Arabica:  The market broke out of the straitjacket after what can only be describe as a fairly quiet last couple of weeks due to light volumes and narrow ranges. Buyers found themselves swept aside by the heavy selling which elected sell stops along the way.

Robusta: After several weeks trying to apply the brake on approach to 1720s went up in smoke, as London broke through and quickly lost any prior sense of restraint.

 

Currency:  The GBP held a near 8 month against the USD$ to 1.6031. This is possibly due to the Monetary Policy Committee voting unanimously to keep the Bank rate at the record low of 0.55 and to maintain asset purchases at £375bn.

 

Physical Markets:

 

Brazil:  The real is much stronger as the futures fall. Diffs are moderately firmer.

 

Colombia: The flow of coffee is starting to improve, volume remains slow which could be a result for the weakening diff of 2cts in a week.

Honduras: After large reductions of 2012/13 crop due to the Roya, the damaged trees have been stumped or recuperated from the infestation. Very little new crop business has been seen so far.

Indonesia:

Kenya: Quantities expected for auctioning remain small, next week around 11,000 bags, and for October fortnightly auctions are anticipated

Tanzania: No change really differentially despite a fairly large auction with over 28,000 bags – overseas buyers providing a bit of support. Northern/Southern Arabica quotes very similar with just about 2 cents apart.

 

India: The rupee appreciated by 6% in a week, which has brought business to a halt. About 20%of the current crop still remains in the hands of the farmers – in hope that the NYC will rise.

 

AOB:

It doesn’t happen very often, but on Friday there were more options trade than futures. 5,250 lots of the

January $1,750 calls traded at $38 laid up with a 34 % delta at $1,668. This equated to a 21.3% volatility and was a new position on both sides.