World Farming Agriculture Commodity news - Weekly Updated -  Exclusive and just that one step ahead.

The S&P GSCI Agriculture Index declined 1.1% WOW as a weakening US dollar (-0.9% WOW) and weather-related wheat production concerns in Europe only partially offset losses accrued across most other ags. Cocoa futures recorded large losses week-on-week, with little fundamental rational other than better weather. Non-Commercials shrunk their net short position in G&Os for the fifth consecutive week in a row by buying 225,600 net lots.

- CBOT Wheat futures rose an impressive 7% WOW to finish at USc 687/bushel (levels not seen since last August). Meanwhile, MATIF increased 5.3% WOW to finish around EUR 255.5/metric ton. Concerns regarding Russian production prospects continue to fuel bullish market sentiment.

- The soy complex buckled last week beneath burdensome stockpiles, falling about 2% amid an increasingly clear backdrop of bullish grains and bearish oilseeds. USDA’s new crop WASDE last Friday was only bearish on soybeans; acreage and yield-boosted US 2024/25 production are seen overwhelming higher crush and exports to produce a 445mbu ending stockpile.

- ICE Arabica futures have remained relative stable this week after the enormous volatility seen in the preceding month. Certified stocks of arabica maintain an upward trajectory. Inventories grew from 701,400 to 735,700 bags (+34,300 bags), marking a 16th consecutive weekly increase in stocks.

Wheat – mildly bullish– global stocks seen falling to 9-year low, with Russian output down.

• US 2024/25 wheat production (1858m bu, +46m bu YOY) and ending stocks (766mbu, +78m bu YOY) both rose by slightly less than analyst expectations.

• Internationally, major cuts in cheap Black Sea wheat suppliers like Russia (-3.5mmt) and Ukraine (-2mmt) are partially offset by increases in Australia (+3mmt), Canada (+2mmt), and US (+1.3mmt). Ending stockpiles are seen falling 4.2m tons YOY to 253.6mmt, a 9-year low.

Soybeans – slightly bearish –US and global stockpiles seen rising 31% and 15%, respectively.

• US 2024/25 ending stocks seen at 445m bu, on record 52 bpa yields, despite higher crush and exports.

• Brazil’s 23/24 soy production was cut 1mmt, while its 24/25 production is expected to jump 15m tons. China’s import demand is seen at a record 109mmt (+4m tons), with 3m tons going to pad record stockpiles. Global ending stockpiles are seen rising about 17m tons YOY.

Corn – neutral –US 24/25 ending stockpiles rise by less than expected thanks to strong demand.

• USDA’s increase in US 23/24 corn exports cut ending stockpiles to 2bn bu, and that strength into 2024/25 is expected to limit stockpile growth to 2.1bn bu, lower than expected.

• Global 2023/24 corn stockpiles were cut 6m mt amid losses in South America, and 2024/25 corn ending stockpiles are seen falling about 1m mt. Brazil’s 2024/25 corn production is expected to remain 10m tons below a record, with Ukraine supplies seen falling 4m tons YOY. Still, global stockpiles are stable and about 12% higher than two years ago.

 Brazilian exports remain excellent, despite the ongoing logistical challenges noted in the latest Cecafé report. In April, 4.2m bags (60 kg) were exported, representing a 53% YOY increase. Brazil has shipped a total of 16.2m bags in 2024, a 46% YOY rise.

- Conilon/robusta coffee exports remain strong, with 677,000 bags shipped in April. The total for 2024 stands at 2.6m bags, a remarkable 548% increase compared to 2023. Arabica coffee is also performing well, with 12.5m bags exported in the first four months of 2024, a growth of 31% YOY.

- If the logistical situation does not worsen, export volumes should remain strong due to the good 2023 harvest and the upcoming 2024 harvest gaining traction in the coming weeks.

- Despite a slight decline in the barter ratio in recent weeks (9% MOM), the overall situation remains favorable. Currently, approximately two coffee bags are needed to purchase one metric ton of fertilizer (blend 20-05-20), which is 12% cheaper year-on-year. While coffee prices have decreased recently, impacting the barter ratio, fertilizer prices remain stable.

- In April, Brazilian coffee prices experienced significant appreciation. The average price for arabica coffee reached BRL 1,214/bag (60 kg), a 17% MOM increase. Meanwhile, conilon coffee reached record levels above BRL 1,000/bag, showing a 23% MOM increase and a remarkable 65% YOY surge. Uncertainties surrounding robusta coffee supply, mainly due to dry weather in Vietnam (the world’s largest robusta producer), attracted non-commercial funds to the coffee market, driving up international prices. As rains began and optimistic weather forecasts emerged for Vietnam, the coffee market calmed down in May. During May, Brazilian coffee prices depreciated by an average of 8% and 13% for arabica and conilon, respectively. In the short term, all these factors should contribute to price volatility. However, the start of the Brazilian harvest may limit prices.

- All arabica coffee regions received below-average rainfall in April, though that should not affect yields. It’s worth noting that the harvest is slightly earlier. In the arabica region, harvest is more advanced in Zona da Mata Mineira than in other areas, and the overall harvest is expected to gain traction in the coming weeks. In the conilon region, the harvest is in full swing. Preliminary reports indicate a drop in yields, but this is normal for the first coffee samples. The drier weather should favor harvest progress and coffee quality in the coming months.

World Farming Agriculture and Commodity news - Short update - Third Week May 2024

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