Headlines:
- COLOMBIA‘S COFFEE OUTPUT RESURGENCE HAS FURTHER TO RUN
The revival in Colombia’s coffee production, which has near-doubled in four years, is not over yet, an International Coffee Organization head said, foreseeing output could hit levels not seen in 25 years. Colombian coffee output stands to top 14m bags for only the fourth time on record in 2015-16, assuming production growth maintains for September, the last month of the marketing year, the pace of growth achieved for the rest of the season. “Production this year should be at the highest level in many years,” Marcela Uruena, the ICO’s head of operations, said, at the organization’s forum on coffee sector finance. Colombia, the world’s third-ranked coffee growing country, “has really recovered from the leaf rust crisis they had”.
Summary:
Beans were choppy in trading today. It moved higher at the open but the gains were short lived. Right after the open prices declined for about an hour. The rest of the day was up and down with it finishing the day down ½ cent. Corn and Wheat futures were weak for most of the day. The initial upside pop at the open was merely a head fake. The Corn was generally under pressure with worries over the weather settling down and the harvest improvements being reported.
The National Weather Service is forecasting drier weather in the Northwestern Midwest which would make for better conditions for both the Corn and Soybean harvest. December Corn gave up 3.75 cents today and Wheat was not far behind losing 3 cents of its own. Egypt made an about face on its zero-ergot tolerance policy yesterday coming in line with international tolerances at 5%. In doing so it was finally able to attract sellers in its Wheat tender today.
The CME Group is reducing margin rates on Corn and Soybeans futures effective after today’s close. Corn margins will be about $100 lower and Soybeans margin will be about $400 lower per contract. This move is consistent with our anticipation of the markets entering a lower volatility period. Reducing margins often attracts smaller speculators which helps to bolster volume.
Weekly Corn sales came in at the top end of trade expectations at 921.9 MT (about 200 MT more than last week). Beans sales were at the low end of trade expectations at 875.7 MT versus 1.012 MMT last week. Wheat sales were strong topping the high end of expectations by about 11 MT at 561 MT versus 392.5 MT last week.
