Flashes
2985 views August 30, 2013 posted by Maja Wallengren

MARKET INSIGHT: Coffee Prices Erode As Market Test New Lows, End Down At $1.1210/Lb Aug 30

  Share...
Coffee Beans 3

AUG 30 (SpillingTheBeans)–September Arabica coffee prices continued to erode on Friday at the ICE futures exchange in New York, settling down 1.05 cents at $1.1210 per pound as the market was testing new lows buoyant by confidence that the nearby supply is “more than covered” despite weather problems in many countries, trader said. September futures opened higher but quickly started pulling downward as the bull camp failed to keep momentum going to sustain a rise, and the bear camp was quick to capitalize on the lack of follow-through from the opening and tested fresh 4-year lows. Traders said current market sentiment is dominated by a feeling of being “comfortable” with what is regarded healthy supplies for now and given any lack of short-term trouble want to test how low the market might go. Other traders, however, expressed concern that evidence is growing of lower than expected crops in all key producing countries Brazil, Indonesia, India and Vietnam. As long as the market ignores this, they said, the current prices below cost of production will lead to sharp declines in production in this and the next world coffee harvest as growers cannot afford to provide even basic crop husbandry. More forward and active December futures settled down 1.35 cent at $1.1630/lb.

***
AUG 29 (SpillingTheBeans)–September Arabica coffee prices lost all gains from the previous session at the ICE futures exchange in New York on Thursday, settling down 1.45 cents at $1.1315 per pound as traders said confidence of demand being covered for now took over market sentiment. They said the market is “comfortable” with the current demand being covered “with more than healthy supplies for now” and that there is no technical reasons for the prices to rise significantly. Other traders, however, said that evidence is growing of lower than expected crops in all key producing countries Brazil, Indonesia, India and Vietnam and as long as the market ignores this, the current prices below cost of production will lead to sharp declines in production in this and the next world coffee harvest as growers cannot afford to provide even basic crop husbandry. More forward and active December futures settled down 0.80 cent at $1.1765/lb.

AUG 28 (SpillingTheBeans)–September Arabica coffee prices corrected upward on Wednesday at the ICE futures exchange in New York, settling 1.45 cents higher at $1.1460 per pound while more forward and active December futures settled up 1.70 cents at $1.1845/lb. Prices opened higher and the bull camp in the market succeeded to keep prices in higher territory throughout the session. But traders said the market “in general terms are comfortable with current supply” and don’t see any need to move significantly higher for the short to medium term through the end of the year.

AUG 27 (SpillingTheBeans)–September Arabica coffee prices closed weaker at the ICE futures exchange in New York, settling 0.90 cent lower at $1.1315 per pound while more forward and active December futures settled down 1.00 cent at $1.1675/lb. Prices opened lower and those in the bull camp trying to build up momentum for an upward movement never managed to gain footing, as the bear camp kept prices trading in lower territory throughout the session. Traders said that despite evidence of lower than expected crops in all key producing countries Brazil, Indonesia, India and Vietnam the market has chosen to ignore those concerns and operate under the conviction that the nearby demand is covered by healthy supplies.

AUG 26 (SpillingTheBeans)–September Arabica coffee prices started the week in upbeat mood and corrected upward from last week’s fresh 4-year lows at the ICE futures exchange in New York. September prices settled 1.00 cent higher at $1.1405 per pound while more forward and active December futures settled up 0.70 cent at $1.1775/lb. The support prices received from the Brazil price subsidy program announced earlier this month has vanished and the market operates under the conviction that coffee demands are well covered for now. Fears and concerns in the bull camp that multiple weather problems in all key producing countries from South-East Asia to Latin America are continuing to cause havoc to the next crop were ignored by the market.

We welcome your comments!heart

  Share...

Share This Article

Leave a Reply

Your email address will not be published. Required fields are marked *