The new Brazil harvest is starting in the Conilon robusta areas, to be followed in a few months by the main harvesting months within the arabica areas, the latter traditionally set to pick up pace in June each year. The weather has been reported to be conducive ahead of the final stages of ripening, while this biennial bearing lower crop to come is forecast on average, for an overall 25% smaller crop due from Brazil this year. The forecasts indicate a median of local and international surveys for an estimated total Brazil arabica and robusta 2021 crop at around 52 million bags to come. The consensus is that this new crop is due to see an approximate 11% increase in Conilon robusta coffee production against an approximate 35% dip in arabica coffee production.
Following the record pace of exports from Brazil to consumer markets from the current July 2020 to June 2021 bumper crop year that are put at cumulatively 31.41 million bags, the July 2021 to June 2022 new crop coffee most likely to be supplemented by a reasonable volume of carry over arabica coffee stocks, from this year's record bumper arabica coffee harvest. For the present it would seem that there shall be no foreseeable shortfall of Brazil arabica coffees available to fuel consumer markets. These carryover stocks, to contribute toward an estimate of an overall 10.50 million bags of surplus coffee in the current year and bolster the approaching lower crop to come from Brazil in the new July 2021 to June 2022 coffee year.
The latest political developments within Brazil that are seemingly related to differences in political opinion in reaction to the current state of the coronavirus Covid-19 impact within the country, with many states applying further lockdown regulations as infections keep climbing. This has generated an increase in internal business uncertainty within their markets; has impacted upon the Brazil Real value to the US Dollar meanwhile, to see this currency which started the week trading at an already low 5.682, to close the business day yesterday at a new low of 5.717.
The July-to-July contract arbitrage between the London and New York markets widened yesterday: to register this at 69.85 usc/Lb. This equates to 52.94% price discount for the London Robusta coffee market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 9,682 bags yesterday, to register these stocks at 1,870,826 bags, with 95.1% of these certified stocks being held in Europe at a total of 1,778,988 bags and the remaining 4.9% being held in the USA at a total 91,838 bags. there was meanwhile a smaller in number 9,150 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 40,445 bags.
The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 17,667 bags over the weeks of trade leading up to Monday 12th. April, to see these stocks registered at 2,443,667 bags, on the day.
It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a firm sideways track for the day. The Sugar, Cocoa, Coffee, Gold, Silver and Palladium markets ended the day on a positive note, while the Platinum market ended the day on a softer note. The day starts with the U.S. Dollar, trading at 1.377 Sterling, at 1.196 the Euro and with the US Dollar buying 5.712 Real.
The New York and London markets started the day yesterday trading on a modest softer note just to the south of par, both markets continued on a softer path for the remainder of the morning session. As the afternoon progressed the market started to gain a degree of momentum buoyed by buying support. The markets would soon hit a ceiling limiting the gains for the day to see both the New York and London markets fall back. The New York market settled on a firmer note, while the London market followed suit in a more sedate manner.
The London market ended the day on a modest positive note and with 36.36% of the gains the day intact, while the New York market ended the day on likewise modest positive note and with 66.10% of the gains of the day intact. This firmer close might inspire some degree of confidence to possibly set the markets for a hesitant steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT. NEW YORK ARABICA USc/Lb.
JUL 1369 + 4 JUL 131.95 + 1.95
SEP 1386 + 4 SEP 133.80 + 2.00
NOV 1402 + 4 DEC 136.20 + 2.05
JAN 1417 + 4 MAR 138.20 + 2.15
MAR 1433 + 4 MAY 139.10 + 2.15
MAY 1450 + 5 JUL 139.55 + 2.15
JUL 1466 + 5 SEP 139.80 + 2.10
SEP 1484 + 6 DEC 140.20 + 2.05
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