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Bi-Weekly Coffee Report

By: CommodityNetwork Team - USA, CommodityNetwork USA

CoffeeNetwork Bi Weekly Coffee Report 

August 1-15 

image-20200803134820-1 CoffeeNetwork Highlights​​​​​​:

  • Financial Results:

    • Starbucks reported that global comparable store sales declined 40%, driven by a 51% decrease in comparable transactions, partially offset by a 23% increase in average ticket. The increase in the average ticket could very well be related to international lockdowns. Theories like one person per family going out to Starbucks to buy multiple beverages for other family members all working from home; individuals going out to Starbucks and buying multiple beverages to consume throughout the day; or an individual buying food products to avoid having to go into multiple stores. Consolidated net revenues of $4.2 billion declined 38% from the prior year primarily due to lost sales related to the COVID-19 outbreak.
    • Dunkin Brands U.S. comparable store sales declined 18.7% in the second quarter as a decline in traffic driven by the COVID-19 pandemic was partially offset by an increase in average ticket. The increase in average ticket was driven by favorable mix shift to family-size bulk orders and snacking attachment, as well as premium priced cold beverages, espresso, and other specialty beverages, and partially offset by increased discounting driven by both national and local value platforms. Comparable store sales improved sequentially in each month of the second quarter. Comparable store sales would have been approximately 480 basis points lower if temporarily closed restaurants were included.
    • Nestle SA reported that after a stronger-than-expected start to the year, organic growth moderated in the second quarter to 1.3%, reflecting the severe impact of movement restrictions on out-of-home businesses and some consumer destocking. Coffee remained resilient, with low single-digit growth, as a double-digit sales increase for coffee at home outweighed a sharp decline in the out-of-home channel. Starbucks products continued to grow at a double-digit rate, driven by further global expansion and the launch of new offerings.
    • Keurig Green Mountain saw net sales in the second quarter of 2020 increase 1.8% and diluted earnings per share totaled $0.21, compared to $0.22 in the year-ago period. COVID-19 had a significant impact on the beverage industry during the quarter, requiring KDP to navigate the challenging environment to deliver balanced growth in the quarter.
  • ICO: World coffee exports amounted to 10.57 million bags in June 2020, down 5.2% compared with 11.15 million in June 2019.
  • Fitch Solutions: Forecasts Arabica futures should average $110/lb for 2020, $105/lb for 2021 and 2022, and then fall to $100/lb for 2023 and 2024. The firm expects the global market will turn from a 6 million bag surplus in 2019-2020 to a larger surplus of 12 million bags in 2020-2021, with the market registering moderate surpluses thereafter.
  • Colombia: Colombia has simplified the process to export coffee after several documents that required cumbersome steps are now being obtained online. This initiative goes hand in hand with the strategy of the national government and the current customs statute to facilitate international trade through the use of computer systems to optimize processes, reducing times and costs in exports.
  • Costa Rica: Coffee exports in July totaled 139,022 60-kg bags, up 13.1% from the 122,882 bags exported in the same month last year. This brought cumulative exports for the first 10 months of the current October 2019 to September 2020 coffee year to 980,731 bags, down 0.1% from the 981,950 bags exported in the same period of the previous coffee year.
  • Vietnam: Vietnam’s General Statistics Office have estimated that coffee exports for the month of July should reach 2 million bags. This would bring cumulative exports for the first seven months of the 2020 calendar year to 17.67 million bags, 1.4% lower than the first seven months in 2019.
  • Uganda: Uganda exported 420,373 60- bags of coffee in June, up 23.17% from the same month last year. This included 344,438 bags of Robusta and 75,935 bags of Arabica.
  • ICE Certified Stocks: Arabica stocks were reported at 1.59 million bags as of August 3rd, down 32.6% from the same time last year. Robusta stocks were down 23.9% year on year at 1.85 million bags.

ICE Certified Arabica Stocks

image-20210302131600-1
ICE Certified Robusta Stocks

 

image-20210302131615-2

Brazil:

  • CONAB: Brazil has a total of 13.1 million bags that belong to the private sector, kept in several warehouses in the country. This amount is 1.5% higher than that recorded in the survey at the end of the 2017/2018 harvest, whose reported stock was 12.9 million bags. Arabica coffee corresponds to 87% of the total stored, reaching 11.4 million bags. The remaining 13% of the stocks are conilon, which represents something around 1.7 million bags.

image-20210216142239-7 Weather Update:

image-20200803135302-7

ENSO

BOM: The Bureau's ENSO Outlook remains at La Niña WATCH, indicating the chance of La Niña forming in 2020 is around 50%— twice the average likelihood. 

NOAA:  ENSO-neutral is favored to continue through the summer, with a 50-55% chance of La Niña during Northern Hemisphere fall 2020 and continuing through winter 2020-21 (50% chance).

image-20200803135302-8

BRAZIL

Dryness covering the southern areas will assist in harvesting efforts this week. Precipitation towards the northeastern areas should cause only minor delays however. Temps should remain above freezing.

 

Looking Ahead:

 

image-20210302131739-3 Date

image-20210302131739-4 ICE

image-20210302131739-5Macro

image-20210302131739-6 Fundamental

Tuesday, August 4

 

EU PPI

Brazil Industrial production

China Caixin services / composite PMI

BOM ENSO update

 

Central America export data (+/- 2 days)

 

Wednesday, August 5

 

EU Markit services / composite PMI    

      Retail sales

UK Markit services / composite PMI

US ADP employment

      Balance of trade

      Markit services / composite PMI

      ISM non manufacturing

Brazil Markit services / composite PMI

            Interest rate decision        

CEPEA weekly coffee report

 

Colombia export data (+/- 2 days)

 

Thursday, August 6

 

UK BoE interest rate decision

       Quantatative easing

US Challnger job cuts

      Jobless claims

Brazil Unemployment rate

China Balance of trade

CN Special Report: La Nina Part 2 (Vietnam & Indonesia)

Friday, August 7

 

Colombia closed for holiday

Brazil Inflation rate

US Non farm payrolls

      Unemployment rate

CN basis report

Monday, August 10

 

Brazil BCB Focus market readout

US JOLTS job openings

       Consumer inflation expectations

CeCafe Brazil export data (+/- 2 days)

 

Tuesday, August 11

 

UK Unemployment rate

EU ZEW economic sentiment index

US PPI / Core PPI

IBGE coffee crop forecast

Wednesday, August 12

 

UK GDP

      Balance of trade

      Industrial production

      Manufacturing production

EU Industrial production

      Manufacturing production

Brazil Retail sales

US Inflation rate

Sucden Financial coffee market outlook

 

CEPEA weekly coffee report

 

Thursday, August 13

 

US Jobless claims

China Industrial production

            Retail sales

            Unemployment rate

NOAA ENSO update

 

CN Special Report: La Nina Part 3 (Brazil)

Friday, August 14

ICE September Arabica options expiry

EU GDP

      Employemnt change

Brazil IBC-BR economic activity

US Retail sales

      Industrial production

     Manufacturing production

     Michigan consumer sentiment

CN basis report

Monday, August 17

 

Colombia closed for holiday

EU Construction output

Brazil BCB focus market readout

US NY empire state manufacturing index

GCA stocks

 

Planning Ahead in August:

SUNDAY

MONDAY

TUESDAY

WEDNESDAY

THURSDAY

FRIDAY

SATURDAY

 

 

 

 

18

19

ICE Europe Sept Robusta options expiry

20

CN Special Report: La Nina Part 4 (Africa)

21

ICE Sept Arabica futures first notice day

22

 

23

24

25

ICE Europe Sept Robusta futures first notice day

26

27

28

29

30

 

31

Robusta market closed for holiday

 

  • Coffee

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