Headlines:
- Brazil robusta price tops R$500 a bag – amid fears for 2017 crop
Procafe unveiled a downbeat estimate for Brazilian coffee production next year, foreseeing drops in output of both Arabica beans and Robusta supplies – which topped R$500 a bag for the first time. The research group, in its first forecast for 2017 output by the world’s top coffee-producing nation, pegged it at 39m bags – a drop of some 20% from the near-49m bags achieved this year. Procafe has a reputation for conservative estimates – as do the government agency CONAB and the CNC producers’ group to which it is seen as being somewhat aligned. Indeed, its forecast for a 28m-32m bag Arabica crop next year is well below the 37m-38m bag estimate from Cooxupe, the producers’ co-operative giant. Procafe foresees Brazilian Robusta output in 2017 at 8m-9m bags, in line with the 8.35m bags harvested this year, on CONAB estimates, and well below the 11.2m bags harvested last year. However, concerns continue to surround Brazil’s drought-hit Robusta growing areas, Espirito Santo and Rondonia – worries which indeed fueled a rise in domestic prices above R$500 a bag for the first time, research institute Cepea said separately on Wednesday..
Summary:
Soybean futures extended gains after briefly pausing yesterday. It has posted positive gains in four of the last five trading days, pulling Corn prices higher with it. Since prices were at resistance it looked like the recent gains that started late last week may have been coming to a halt after yesterday’s down moves, but demand seems to be playing a role in potential price support.
End users are finally starting to bid for inventory at these low prices, but producers are not offering in mass just yet. The advent of recent demand has emboldened producers that have been holding out for higher prices. For the many who have suffered through a lot of pain for the prospect of higher prices, this is refreshing to them right now. An additional sale of 185k metric tons of Soybean for delivery to ‘Unknown Destination’ was reported to the USDA today for the 2016-2017 marking year.
We are basically at the harvest halfway mark and the yields are still primed for record numbers. Weather forecasts for the next 6-10 days are calling for continued warm and dry climate, a bonus for the harvest. Going out two weeks there is a chance of some rain but overall the forecasts are beneficial.
December and March Corn rose 4.25 cents each. November Beans was up 9.75 and Jan Beans was up 9.50. December Wheat was down initially but recovered well finishing 1 cent in the positive.
