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Coffee Market report 19th January 2015 to 23rd January 2015

COFFEE MARKET NEWS Week Ending: 23rd January 2015

 

19th Jan

20th Jan

21st Jan

22nd Jan

23rd Jan

NYC

Closed

164.30

163.95

159.95

162.45

LIFFE

1971

1950

1947

1941

1931

GBP / USD

1.5104

1.5100

1.5165

1.5130

1.4985

 

 

 

 

 

 

Commentary

A short trading week ensued last week after the public holiday last Monday closed the NYC terminal market to traders – but upon opening on Tuesday, we saw follow through selling from the Friday before which didn’t stop until a resurgent few pushed the market back in to positive territory on Friday afternoon, closing the week almost 8cts lower and seemingly correcting the short term run that began on 5th January. The threat of rain in Brazil has been credited for the latest sell off.

London saw little activity last week, with periods of complete inactivity. NYC selling volume spilled over in to London adding pressure to prices, but overall it seemed to hold well, with little in the way of Macro news to push it too far in to the red.

Currency – the USD hit an 11 year high last week against a range of currencies, boosted by the Gargantuan ‘Quantative Easing’ program announced by the European Central Bank pushing the Euro to an 11 year low against the dollar – further compounding the pressure it received the week before caused by the lifting of the artificial Swiss Franc / Euro ‘peg’

 

Global estimates – The ICO, last month estimated for the current season, global production to reach only 141m bags – almost a 4% drop on the previous year, against an implied consumption figure of 148m (based on annual increase in consumption of 2%) given the 7m bag deficit, it is almost impossible not to imagine firmer pricing manifesting itself this year as carryover stocks continue to be drawn down.

Origin Activity

Brazil – Could Coffee in Sao Paulo now face the risk of Hypothenemus Hampei Plague?  

A new problem to spook markets could be on the horizon with the Brazilian Agricultural Ministry claiming in an official gazette today that a Coffee Plague could be affecting plants in the Sao Paulo region. More to follow on this should it develop. Needless to say, it remains business as usual in Brazil, with coffees flowing, pricing steady and all eyes firmly on the weather charts.

Ethiopia – Process of washed coffees have finished, but stocks remain in the hands of the washing stations. Some naturals still in the drying stage ready to hit the mills. Prices continue to hold firm, as sellers remain reluctant to lower them, and buyers unwilling to commit to anything more than their initial needs. Let’s wait and see who blinks first.