Home

    You are here

COFFEE BREAKS ON SIGNS OF HARVEST

You are here

trade commodities coffee on stock.com

COFFEE BREAKS ON SIGNS OF HARVEST

Nov 21 2014, 10.50am GMT

STOCK.com

News of good weather conditions has seen coffee prices drop from their yearlong upward trend.

For the past year coffee has been on a steady upward trend, now the trend has broken on reports of new crops in Indonesia, favourable weather conditions and a reduction in coffee consumption in Northern Hemisphere countries.

Announcements from the Green Coffee Association of the U.S.A. put warehouse stocks at 43% less in October, but this figure did not include the in transit bulk container coffees or onsite roaster inventories. Also, within the last week, the USDA (United States Department of Agriculture) Foreign Service has given positive reports on ‘better than expected’ output in Brazil, Columbia, India and Indonesia.

Brazil

Having suffered droughts and rains, the forecast for Brazilian coffee, the world’s largest output, was better than expected. Brazilian coffee production for 2014/15 was revised upward to 51.2 million 60-kg bags, a 1.7 million bag increase compared to previous estimate due to better than expected yields in some growing areas, but still off 3.3 million bags from the previous year. Similarly, coffee exports were revised up marginally to 33.53 million bags, but remain 600,000 below the previous year. Carry-over stocks are projected at 6.98 million bags.

Columbia

Colombian coffee production in marketing year (MY) 2014/15 is expected to increase to 12.3 million bags (1 bag = 60 kilograms – unless otherwise noted), green bean equivalent (GBE), slightly above Post’s estimate of 11.9 million bags in May 2014. Drought conditions from the El Niño phenomenon were predicted for the second half of 2014; however, weather conditions remain normal with little impact on production. Exports are forecast to increase to 11.3 million bags in MY2014/15, a marginal increase from the May 2014 estimate of 11 million bags.

Indonesia

Growing coffee consumption in Indonesia is transforming Indonesia’s coffee trade. Industry sources estimate that local consumption growth (six to eight percent) is outpacing production growth (two or three percent). Given the reported growth of local coffee consumption, Post revises 2013/14 domestic use to 2.83 million bags (GBE) and 2014/15 domestic use to 2.9 million bags. 2014/15 Arabica production is revised down 100,000 bags to 1.45 million bags, following reports of drier weather in northern Sumatra.

India

India’s 2014/15 coffee crop (Oct/Sep) is forecast at 5.1 million 60 kg bags, marginally higher than the revised MY 2013/14 estimate. The forecast Robusta crop increase should offset the decline in Arabica yields caused by pest pressure and the smaller ‘off’ year crop. Lower export estimates coupled with rising imports have raised stock levels in MY 2013/14 and 2014/15.

Report courtesy of USDA

Coffee chart on MT4 showing this week’s fall against better than expected crops from the main production countries in the world.

trade coffee on stock.com

Trade coffee and other commodities on STOCK.com with all training given to clients.

Commodities Block Actions

Trading Platforms

MetaTrader

Through a simple native App download, be ready to log on to the powerful, intuitive MT4 platform and trade multiple assets on your desktop or through mobile

More on MetaTrader

WebTrader

Online access - anytime, anywhere - to your secure STOCK.com account, through desktop, tablet and mobile interfaces with no download necessary

More on WebTrader

Trading in CFDs involves significant risk to your invested capital