Headlines:
World coffee stocks to rise for first time in four years – but remain, relatively, squeezed
World coffee inventories will rise in 2018-19 for the first time in four years, boosted by record production – but will remain tight by historical standards, notably those in Colombia. The US Department of Agriculture, in its first forecasts for world coffee supply and demand in 2018-19, pegged stocks at the end of the season at 32.81m bags – a rise of 3.41m bags year on year. The increase, the first since 2014-15, will raise the level of inventories compared with consumption – to form the stocks-to-use ratio much used as a gauge of supply tightness and pricing potential – to 20.1%, up 1.6 points year on year. However, that still represents a weak reading by historical perspective, with the ratio showing a 10-year average of more than 26%. The forecasts reflected an expectation that while world coffee production will jump by 11.40m bags to a record 171.17m bags, consumption growth will accelerate too, gaining 4.56m bags to a record 163.22m bags. And “exports are expected up in response to strong demand”, the USDA said, forecasting shipments up 5.35m bags at an all-time high of 136.17m bags. Brazil’s exports were seen showing a particularly strong recovery, up 5.31m bags year on year at a four-year high of 35.53m bags, with small declines expected in volumes from the likes of India and Honduras.
USDA’s Crop Ratings Move Ahead for Corn, Drop for Soybeans
The U.S. soybean crop condition rating is downgraded over last week, while corn edges higher. In its Weekly Crop Progress Report Monday, the USDA rated corn crop as nearly full emerged, while 10% of the soybeans are still underground. The ratings came in within trade expectations. The U.S. corn crop is rated 78% good/excellent, slightly ahead of last week’s rating of 77% but way ahead of last year’s rating of 67%. In its report, USDA pegged the U.S. soybean crop condition for soybeans at 73% good/excellent, one point below a week ago but well over the 67% from a year ago. USDA reported that 78% of the U.S. spring wheat is rated as good/excellent, vs. a 70% week ago.
Summary:
Corn prices stumbled given hot weather that was peppered with beneficial rain across much of the US Midwest this weekend. Crop conditions are expected to come in at 76% Good/Excellent which would be down 1% from last week. During July 18 through May 19 prices dipped down to new contract lows on the heels of fund selling. Weekly export inspections coming in at 1.7 million metric tons (mmt) were at the high end of the trade estimates that ranged from 1.1-1.7 mmt. Beneficial growing weather and lack of fresh supportive news on the trade tariff front sent Soybean prices spiraling. Crop conditions are expected to come in unchanged at 74% Good/Excellent. Soybean plantings are estimated at 97% complete. Weekly export inspections came in at 818k mt which was above trade estimates that ranged from 350k-650k mt. Wheat prices fell as the Winter Wheat harvest expands across the Southern Plains. Yield talk remains similar to that of last week with reports of some areas seeing better than expected results. Spring Wheat crop conditions are expected to come in unchanged at 70% Great/Excellent. Winter Wheat harvest is estimated at 26% complete versus 14% last week. Weekly export inspections came in at 373k mt versus trade estimates that ranged from 300k to 500k mt.
