One must further take into account that with only four more months of the present coffee year to the fore and the new crop coming into play in just over five months’ time, that these exports are being deducted from a coffee supply for the present coffee year that was inflated by record carryover stocks into the new crop. Thus if one is to look to a relatively conservative coffee supply for the present coffee year of approximately 33 million bags and deduct the 1.7 million bags of domestic market demand and the need for at least 4 million bags of stocks into the coming coffee year, it would leave an approximate 2 million bags of coffee supply per month, for export over the last four months of the present coffee year.

This is however in terms of the smaller Brazil conilon robusta and Indonesian robusta coffee crops this year and the monthly averages so far at over 2.4 million bags a month, not an excessive supply of mostly robusta coffees out of Vietnam. This would therefore, make one think that the situation shall not inspire any relaxation of the prevailing internal market price resistance that has been shown over the past couple of years, on the part of the Vietnam farmers and internal traders. This should limit the downside risk for the London market for the foreseeable future, unless there are some dramatic negative influences coming to the fore from both the overall macro commodity index and or the fortunes of the presently somewhat steady New York arabica coffee market.

The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 62.16 usc/Lb., while this equates to a 45.36% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, continues to inspire support for the robusta coffee sector of the industry.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 108 bags yesterday; to register these stocks at 1,312,017 bags. There was meanwhile a larger in volume 5,298 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 19,754 bags.

The Certified Robusta coffee stocks held against the London market were seen to decrease by 37,333 bags or 1.44% over the week of trade leading up to Monday 13th. June, to see these stocks registered at 2,559,167 bags on the day. These stocks despite the relatively attractive prices of the good volumes of Brazil conilon robusta coffees within the stocks that have a traditional support from the North American roasters, are steadily on the decline but so far, not with the aggression that many had expected.

The commodity markets were mixed but with most markets losing some weight yesterday, to see the overall macro commodity index taking a softer track during trade yesterday. There is however a degree of caution within the markets as players following news of improved U.S.A. Retail sales, now await the outcome in terms of interest rates of the prevailing meeting of the U.S. Federal Reserve Bank. The Natural Gas and Corn markets had a day of buoyancy and the Cocoa and Gold markets were near to steady for the day, while the Oil, Sugar, Coffee, Cotton, Copper, Orange Juice, Wheat, Soybean and Silver markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.5% lower; to see this Index registered at 429.53. The day starts with the U.S. Dollar showing a degree of early buoyancy and trading at 1.414 to Sterling and 1.120 to the Euro, while North Sea Oil is near to steady in early trade and trading at 47.30 per barrel.

The London and New York markets started the day yesterday on the back foot and with both markets making early losses and taking a negative sideways track into the afternoon trade, but with the New York market posting something of a recovery to move closer to par as the afternoon progressed, while the London market continued on a steady downside track. The New York market did however falter partially later in the day and increased its losses, while the London market continued to slide in value. The London market ended the day on a very soft note and with 85.7% of the earlier losses of the day intact, while the New York market ended the day on a soft note and with 58.4% of the earlier losses of the day intact. This close provides mixed signs as while the charts tend to post a negative picture for the London market, they tend to indicate consolidation rather than a negative picture for the New York market. Thus one might expect to see a hesitant near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT         NEW YORK ARABICA USc/Lb.

JUL 1618 – 31                                     JUL 135.10 – 2.20
SEP 1651 – 30                                     SEP 137.05 – 2.25
NOV 1669 – 28                                   DEC 139.75 – 2.05
JAN 1682 – 29                                   MAR 142.30 – 1.85
MAR 1696 – 29                                 MAY 143.60 – 2.00
MAY 1713 – 30                                   JUL 144.95 – 2.10
JUL 1731 – 30                                      SEP 146.35 – 2.10
SEP 1745 – 30                                     DEC 148.15 – 2.05
DEC 1764 – 30                                   MAR 149.65 – 1.95
MAR 1760 – 30                                  MAY 150.45 – 2.05