Coffee Moving Higher, Bullish Tone Persists

More jobs than expected were created in June in the US, a sign that keeps the investors waiting for the Fed tapering. In Europe, the ECB president declared that interest rates will remain low for a lot of time, no different than what was expected. The main global stock exchanges began the second half of the year slightly higher, with the exception of Germany, Hong Kong and Brazil. With commodities, the highlight was the oil upwards move, reflecting the nervousness over the crisis in Egypt and eventual effects in the Middle East.

The week in general was quiet, with coffee closing higher US$ 1.26 per bag in NY and US$ 3.00 in London.

The C had a timid attempt to go up, apparently due to the news of colder nights and trucks stoppages in Brazil. The Robusta reacted to purchases before the Ramadan, resistance to sell coming from producers and an earthquake in Sumatra that should delay shipments.

Mainly, it was said in this current week that there should be an announcement of a program of coffee acquisition – but the market did not pay a lot of attention to it since this has been talked about already for a while.

They are considering warehousing between 3 to 5 million bags in Vietnam in the crop year 2013/14, giving a sense, or confirming, the size of that country’s inventory.

To sum up, there is nothing new in the market, not even the price interval which I continue to bet will be between US$ 110 and US$ 130 cents for the next few months.

For a more bullish tone, it is worth mentioning that the US Dept of Commerce divulged that their net coffee imports (imports less exports) reached a new record in the last 12 months to May/13, totaling 23.59 million bags, 5.2 % more than the same period a year ago.

The global demand, after several tests with high prices and recessions, will certainly not diminish. Therefore, one has to be patient so that the inventories and surpluses dry up, although the inventories are not sufficient should sudden losses occur due to weather factors.