JO may just pop 50-100%. My SGG already up 25%
El Nino, soft commodities going to rock in coming months.
Coffee Market Report
08 Oct 2015
The National Coffee Growers Federation of Colombia had reported a good October 2014 to September 2015 coffee year and with production for the period registered at 13,333,000 bags had initially indicated that these production levels are likely to be maintained, for this new October 2015 to September 2016 coffee year. However they have followed up with statement that the prevailing El Nino phenomenon might actually start to impact and that the longer term effects of the drier weather that comes with this phenomenon shall start to impact upon production during the coming year.
One cannot ignore the effects of the El Nino phenomenon and its impact upon longer term production in Central America, Colombia, Peru and Indonesia, but with the new crop for Central America already related to well-developed cherries, it is more what might happen in the coming year for Colombia, Peru and Indonesia that is a concern. Albeit the on the longer term and if the El Nino brings with it significantly drier weather for Central America, it may well impact upon the next October 2016 to March 2017 harvest for this region. Thus it is a factor that shall without doubt; continue to be highlighted within the coffee press for some months to come and if there is more obvious reality to the problem, it could be a factor to trigger the funds to start liquidating their short positions with the markets and to inspire a significant rally within the markets.
Aside from the El Nino story there remains little in the way of striking fundamental news coming to the coffee markets for the present, with the more prominent and volatile New York market rather being directed by the overall fund assessment of the commodity markets in general. There is however aside from the renewed fund interest in commodities some degree of support coming from the modest recovery of the Brazil Real relative to the U.S. dollar, which has seen the real that had fallen to over 4 to the dollar now trading at 3.88 to the dollar, which has an impact upon selling volumes from Brazil.
