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Coffee Market report 29th December 2014 to 2nd January 2015

COFFEE MARKET NEWS Week Ending: 2nd January 2015

 

29th Dec

30th Dec

31st Dec

1st Jan

2nd Jan

NYC

165.15

164.80

166.60

Closed

161.05

LIFFE

1835

1871

1893

Closed

1838

GBP / USD

1.5569

1.5540

1.5556

1.5584

1.5292

 

 

 

 

 

 

Commentary

With the lengthy holiday season behind us, the terminal markets can finally get all the players back on the board. However looking at the charts, it’s difficult to notice any change in pre and post holiday trading – the markets continue to follow their downward trend making new lows almost daily. We closed the year out at 166.60 down a weighty 60cts from 10 out of 12 weeks of posting negative settlements.  But it is not all doom and gloom, let’s not forget that this figure is still 50% higher than the previous year end close in 2013 of 110.70, and while we may still have new lows to make in the coming weeks as we anticipate the substantial index adjustment, Brazil Crop Estimates still looms large which can quickly turn this market around.

Liffe began the week in earnest and seemed to post some recent highs (1919) but after a positive start, the Friday sell off in New York flowed over to London and any gains made throughout the week were soon given up to profit takers. We continue to anticipate short term weakness in the market – but then, this market has been known to surprise us all in the past.

Origin Activity

Brazil – Little news coming out of Brazil of late – rains have subsided for now, and leaving everywhere in an apparently much better state than this time last year. Crop estimates from a number of ‘reliable’ sources continue to vary, but to date all look to show a more positive picture – hence the bearish terminal market sentiment. Still early days yet for more ‘informed’ estimates to surface. Many bullish figures believe the damage from last year was too severe to be rectified in only one season, also given that this season should theoretically be an ‘off’ cycle for the trees. Let’s wait and see.

Honduras – Offers have begun surfacing again for HG and SHG coffees lately, as many exporters withheld offering for improved supply and internal prices. Differentially, conventional grades have firmed up a touch over the past few weeks, whilst certified offers remain ‘competitive’

Ethiopia – Offers continue to flow out of Ethiopia for new crop shipments (beginning March) but remain historically high – as a traditional outright offering origin, the constant weakness in the terminal market is making differentials look very firm indeed! Certified Fairtrade Organics will soon become unaffordable to many. Quality is expected to be its usual exotically flowery self.

Indonesia – Robusta exports for December fell almost 30% from a year earlier bringing the total crop for the year around 10-12% lower. 2015 should bring a slight increase in production as favourable weather patterns aid the recovery and some estimates suggest up to 25% increase in volumes.

Jamaica – the delayed Jamaica crop is now being offered by some, but at what cost? Prices are firm, and quality appears to have diminished – Each year we seem to pay more for less. Rather like a Cadbury Creme Egg.