Robusta coffee futures continue their trek ever higher, with no end in sight for the recent strength.
Markets were unfazed by the news that the State Statistical Department in Vietnam has forecast coffee for the month of October up 48% year on year, at 2.17m bags.
“This figure is well ahead of the earlier forecasts on the part of the country’s coffee trade and exporters, who had been forecasting exports at between 1.17m and 1.67m bags,” said coffee trading house I&M Smith.
But the trader noted that these exports “would have liquidated a good percentage of the carryover stocks from the previous crop”.
So Smith said that this could “dictate that there is good reason now for Vietnam to soon start to build up harvest volumes”.
Global robusta shortage
This comes at a time of very low global robusta production.
“While with no competition from Brazil following the country’s dismal new robusta harvest this year and limited competition from the relatively tight supply of robusta coffees from Indonesia and Uganda, it has left the consumer markets looking to Vietnam for steady short term robusta coffee supply,” Smith said.
January robusta coffee settled up 0.6%, at $2,187 a tonne, after reaching as high as $2,191, a two year high.
December arabica coffee settled up 0.4%, at 165.50 cents a pound, after reaching as high as $166.90 a tonne.
Sugar falls, cotton rises
Sugar fell sharply, under pressure from the weakening Brazilian real, and a lack of momentum after the previous day’s listless session.
“Lingering around recent lows is still not a good look,” note Tobin Gorey, at CBA.
March raw sugar settled down 1.9%, at 22.16 cents a pound, a one-month-low.
But cotton futures rose for the third straight session, helped by ideas of a smaller US crop.
December cotton futures settled up 1.5%, at 70.82 cents a pound.
Soybean rally stalls
Soybean futures fell back, profit taking at the end of strong week.
November soybean futures finished down 1.3%, at $10.01 ¼ a bushel.
And wheat prices fell back, as the reality of heavy world supplies reasserted itself.
Wheat was buoyed in the previous session by some stronger than expected US export sales numbers.
But Ami Heesch, at CHS hedging, noted that prospects could be limited as “the strong US dollar should keep the US fairly uncompetitive”.
“Global stocks remain plentiful,” Ms Heesch noted.
December Chicago wheat finished up 1.3%, at $4.08 ½ a bushel.
But there was more support in spring wheat. Prices for the highest-protein grade of traded wheat have been supported by global protein worries.
And now a soggy end to the Canadian spring wheat harvest is adding support.
“Canada wrestles with getting the last of the crop harvested,” noted Ms Heesch.
December spring wheat futures in Minneapolis finished up 0.2%, at $5.25 ¼ a bushel.
Heavy harvest pressure
Corn futures were also down, on spillover weakness from wheat and soybeans, as well as harvest pressure.
Tregg Cronin, at Halo Commodities, said there was likely to be a “decent sized weekend of corn harvest across the Midwest as producers make their final push.
This is only likely to worsen the shortage of storage, which is weighing on cash markets.
“Emergency storage is being utilized across the upper-Midwest, and is only likely to get worse with so much crop left to be combined,” Mr Cronin said. “Many elevators are cash only with little to no storage options available.”
“This harvest could have a long tail, and foreshadows the kinds of challenges farmers and elevators will have in moving this crop the next 6-8 months,” Mr Cronin said.
December corn futures finished down $3.55 a bushel.
(Source – http://www.agrimoney.com/marketreport/pm-markets-squeezed-robusta-market-treks-ever-higher–3826.html)