Large pre-holiday U.S. coffee stocks raise bearish eyebrows
By Luc Cohen and Marcy Nicholson
NEW YORK Dec 16 (Reuters) - U.S. coffee warehouse stocks were at their highest levels for a November for at least the last 13 years, according to the most recently released data, as Brazil aggressively shipped coffee amid a tumbling local currency and traders question the strength of demand in the United States.
Overall inventories still fell in November, as is typical ahead of the peak consumption period in the U.S. winter. But the drawdown was much smaller than average, which traders said was a bearish sign for a market that has seen prices tumble 30 percent this year, as the rise of more efficient single-serve coffee has dented demand.
"I certainly wouldn't be ringing any bells or saying any bullish cheers over this data," said Judith Ganes-Chase, president of J. Ganes Consulting. "Stocks are not falling as fast as they normally would be during the seasonal downswing."
U.S. stocks fell by 156,232 60-kg bags between October and November, according to Green Coffee Association (GCA) data released on Tuesday, substantially less than the 307,289-bag drop last year and below the average drop of 194,966 bags for the month over the past 14 years.
Total September-November inventory drawdowns were 15 percent below the 14-year average.
That brought total stocks to 5,791,966 bags, the highest level for a November month on records dating back to 2002. That was just off 12-year highs hit in August.
Stocks typically decline during the fall and winter months and build during the spring and summer. Traders said the small drawdown could delay any rebound from current price levels just above nearly two-year lows.
"Everyone's been waiting to see certified stocks falling, Brazil exports slow, and consuming country stocks decrease," one U.S. trader said of the main indications that a hike in futures prices is looming. Continuación...