Green Coffee Report
Posted: 7/9/2010
S&D Coffee Inc.
Coffee Market Report
For week of: July 06, through July 09, 2010
Contributors: F. Taylor & T. Fallar
"C" Mkt. Sept, 2010 = $1.6320
Weekly change: down = - .0110 cnts/lb
GENERAL COFFEE NEWS & INFORMATION
A dull week compared to the fireworks we have come to expect. The terminal markets London and NY, more or less behaved themselves and physical markets were basically sluggish.
In a surprise move, the Brazilian government chose to announce a delay to a (previously only rumored) 5 million bag retention program, due to current high market prices. It’s good to see our South American friends still have something to smile about. The Euro has made a comeback and reached levels not seen since the end of April.
Demand, especially in producing countries, continues to show good strength. Any hiccups in supply are going to be bull fodder from here on in. It is estimated spec/fund position on ICE is long 30,000 lots and index funds long 56,000 lots long.
ICE certified stocks stand at 2.18 million bags
Comment on the ICE Market:
ICE:
The lack of follow through buying and negative macro news brought profit taking and liquidation through 160.00 basis Sep, taking us to the week’s low of 156.85. The market has been volatile with the low volumes. The basic structure has weakened with the nearby Sep/Dec trading out to -1.00 remaining firmer from Dec/Mar onwards. Any weakness has seen industry buying stepping in to add to their average in coverage, while the strength has seen origin selling, but not in great size.
The break of the 165.00 saw an off take of origin offers this is where they have been waiting to re-enter the market.
Support: 160.00, 156.85, 155.40, 148.15
Resistance: 163.95, 169.25, 176.50
BRAZIL
Local market: The daily volume traded was somewhat reduced, as ICE correction was in place, the real also regained some value, and producers for the time being resisted selling into lower levels. Fine cup coffee replacement differentials even firmed a couple of cents on increased exported demand. In general a rather quiet week that allowed producers and exporters to catch up on contracts.
Only moderate volumes reported traded.
Weather remained good, but a change to wetter conditions is predicted.
The real rose slightly, and the Sao Paulo stock market regained a few percent in quiet
conditions.
COLOMBIA
Local market: Despite the swings on the ICE Mkt., not much is happening in the internal markets in Colombia. It has been rather rainy and the coffee flow remained very slow.
Export market: Some business has been reported, but quantities were very small. Differentials were once again a shade lower.
LATIN AMERICAN MILDS
Mexico:
The rainy season started this week. The last few lots remaining of mostly of inferior quality, are being offered to the internal market, at very high prices. Outside demand remains mostly subdued.
Guatemala:
It was a rather quiet week, internally and externally.
Honduras:
A few leftovers appeared at the origin, but buying interest was lukewarm. Forward sales for the new crop are being offered at slightly softer differentials.
El Salvador:
Additional forward sale of new crop production is taking place, differentials are a touch lower.
Costa Rica:
Very little activity was reported this week.
Peru:
About 75% of the Chanchamayo crop has been harvested and even slightly more in
Cusco. The crop advance in northern areas is only about 35% completed at this point. However, producers are keen to sell in order to benefit from the high prices in today’s market. Outside demand was mostly sluggish.
AFRICA / Papua New Guinea
Kenya:
We remain at auction break – resuming August 08, 2010
Tanzania:
There were very small amounts of volume reported being done. The current crop is changing hands at proud differentials.
Ethiopia:
Only a moderate amount of volume on registrations was reported this week, mainly sundried qualities. Heavy shipment delays continue to cripple logistics out of Djibouti. Ministry of agriculture released eleven month (July 8, 2009 to June 7, 2010) export figures – total 144,000 tons earning 444 million US$.
Uganda:
Very brisk interest for washed qualities goes unfulfilled (no sellers), as fresh coffee from higher elevations in the mount Elgon range still ripening and not yet available
Papua New Guinea:
Arrivals are becoming less consistent, as intermediary suppliers are taking a longer time to source coffee from remote areas. June exports likely to exceed 120,000 bags, 20% above June 2009.
Total exports for 09/10 coffee year to date reached 716,000 bags, 10% above 08/09. Ongoing industry interest in all qualities at very firm differentials continues.
A dull week compared to the fireworks we have come to expect. The terminal markets London and NY, more or less behaved themselves and physical markets were basically sluggish.
In a surprise move, the Brazilian government chose to announce a delay to a (previously only rumored) 5 million bag retention program, due to current high market prices. It’s good to see our South American friends still have something to smile about. The Euro has made a comeback and reached levels not seen since the end of April.
Demand, especially in producing countries, continues to show good strength. Any hiccups in supply are going to be bull fodder from here on in. It is estimated spec/fund position on ICE is long 30,000 lots and index funds long 56,000 lots long.
ICE certified stocks stand at 2.18 million bags
Comment on the ICE Market:
ICE:
The lack of follow through buying and negative macro news brought profit taking and liquidation through 160.00 basis Sep, taking us to the week’s low of 156.85. The market has been volatile with the low volumes. The basic structure has weakened with the nearby Sep/Dec trading out to -1.00 remaining firmer from Dec/Mar onwards. Any weakness has seen industry buying stepping in to add to their average in coverage, while the strength has seen origin selling, but not in great size.
The break of the 165.00 saw an off take of origin offers this is where they have been waiting to re-enter the market.
Support: 160.00, 156.85, 155.40, 148.15
Resistance: 163.95, 169.25, 176.50
BRAZIL
Local market: The daily volume traded was somewhat reduced, as ICE correction was in place, the real also regained some value, and producers for the time being resisted selling into lower levels. Fine cup coffee replacement differentials even firmed a couple of cents on increased exported demand. In general a rather quiet week that allowed producers and exporters to catch up on contracts.
Only moderate volumes reported traded.
Weather remained good, but a change to wetter conditions is predicted.
The real rose slightly, and the Sao Paulo stock market regained a few percent in quiet
conditions.
COLOMBIA
Local market: Despite the swings on the ICE Mkt., not much is happening in the internal markets in Colombia. It has been rather rainy and the coffee flow remained very slow.
Export market: Some business has been reported, but quantities were very small. Differentials were once again a shade lower.
LATIN AMERICAN MILDS
Mexico:
The rainy season started this week. The last few lots remaining of mostly of inferior quality, are being offered to the internal market, at very high prices. Outside demand remains mostly subdued.
Guatemala:
It was a rather quiet week, internally and externally.
Honduras:
A few leftovers appeared at the origin, but buying interest was lukewarm. Forward sales for the new crop are being offered at slightly softer differentials.
El Salvador:
Additional forward sale of new crop production is taking place, differentials are a touch lower.
Costa Rica:
Very little activity was reported this week.
Peru:
About 75% of the Chanchamayo crop has been harvested and even slightly more in
Cusco. The crop advance in northern areas is only about 35% completed at this point. However, producers are keen to sell in order to benefit from the high prices in today’s market. Outside demand was mostly sluggish.
AFRICA / Papua New Guinea
Kenya:
We remain at auction break – resuming August 08, 2010
Tanzania:
There were very small amounts of volume reported being done. The current crop is changing hands at proud differentials.
Ethiopia:
Only a moderate amount of volume on registrations was reported this week, mainly sundried qualities. Heavy shipment delays continue to cripple logistics out of Djibouti. Ministry of agriculture released eleven month (July 8, 2009 to June 7, 2010) export figures – total 144,000 tons earning 444 million US$.
Uganda:
Very brisk interest for washed qualities goes unfulfilled (no sellers), as fresh coffee from higher elevations in the mount Elgon range still ripening and not yet available
Papua New Guinea:
Arrivals are becoming less consistent, as intermediary suppliers are taking a longer time to source coffee from remote areas. June exports likely to exceed 120,000 bags, 20% above June 2009.
Total exports for 09/10 coffee year to date reached 716,000 bags, 10% above 08/09. Ongoing industry interest in all qualities at very firm differentials continues.
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Ex-dock diffs. for arrival / delivery in cnts/lb basis respective “C”
|
|||
|
Growth
|
July, Aug & Sept.
|
Oct - Dec.
|
1st Quarter (approx)
|
|
Brazil Santos 2/3 MTGBSS 10/11
|
+.0800
|
-.1000
|
C-.1100
|
|
Colombia Excelso UGQEP
|
+.6800
|
+.6200
|
+.53
|
|
Peru Hard Bean MC EP
|
+.3700
|
+.3600
|
+.30
|
|
Honduras SHGEP 10/11 crop
|
N/A
|
+.3300
|
+.27
|
|
Costa Rican SHBEP 10/11 crop
|
N/A
|
+.5700
|
+.45
|
|
Guatemala SHBEP 10/11 crop
|
+.5800
|
+.5400
|
+.45
|
|
Nicaragua SHG 10/11 crop
|
+.4200
|
+.3600
|
+.29
|
|
Mexican Altura 09/10 crop
|
N/A
|
+.3600
|
+.30
|
|
El Salvador SHG 10/11 crop
|
N/A
|
+.3200
|
+.26
|
|
Kenya AB FAQ
|
N/A
|
+2.60
|
N/A
|
|
Sumatra Mandheling
|
+.50
|
+.45
|
+.40
|
Six month continuation chart vs. September 2010
