It is hard to get much information about the cocoa crop in West Africa - supposedly the mid-crop was in good shape, but now some say the cocoa beans may be small? The strong uptrend in July cocoa peaked on March 14th and then fell sharply, to almost the 6-month moving average. Since then, prices rebounded and are chopping higher (updated 5-9).

Fundamental Stats -

On March 4, 2007, the Ivory Coast government and rebel forces agreed to form a new government and, on April 14, 2008, they said that they will hold national elections on November 30th. The country has been divided since 2002 and it has been hard to reconcile the two sides since then. The other threat to the world's cocoa crop comes from dry weather conditions and the swollen shoot virus. According to a BBC News report on October 13, 2006, the virus is not being contained and some cocoa plantations are being abandoned. Low prices have made it hard for producers to keep up with applying the sprays and fertilizers that might have helped. The Ivory Coast and Ghana account for over one-half of the world's cocoa production.

Obtaining recent data on world cocoa statistics is difficult. On February 29, 2008, the International Cocoa Organization (ICCO) predicted that world production of cocoa will fall short of consumption by 51,000 tons in 2007-2008. They also expect 2007-2008 ending stocks of 1.54 million tons or 41% of annual use, the lowest in five years. The ICCO estimated the 2006-2007 world production deficit at 299,000 tons. Europe's cocoa grind totalled 354,571 tons in the first quarter of 2008, up 5% from a year ago. In the U.S., the cocoa grind totaled 91,876 tons in the first quarter, down 5.6% from a year ago.

July coffee went straight up in the month of February, but down even farther in March - not a good sign. However, prices have held firm at $1.30 and on May 9th prices closed above the downtrend of the past two weeks - a possible sign of strength. Brazil's next coffee harvest is near, but so is winter and concerns about possible bouts of freezing temperatures. Most expect both Brazil and Vietnam to have larger crops this year (updated 5-9).

Fundamental Stats -

On December 7, 2007, the USDA estimated 2007-2008 world coffee production at 122.9 million (60 kg) bags with implied use of 126.9 million bags. That puts 2007-2008 ending coffee stocks at 18.3 million bags, or 14% of annual use, the lowest ending stocks since 1961. Brazil's crop was pegged at 37.6 million bags.

Of course, now the market is focused on the next world crop. On May 8, 2008, the government of Brazil predicted their next coffee crop would total 45.5 million (60 kg) bags... less than most analysts believe. On November 8, 2007, Louis Dreyfus Commodities predicted that Brazil will grow a 50 million-bags of coffee in 2008-2009. A dry fall affected Brazil's flowering stage and added uncertainty to the upcoming numbers.

In its March report, the International Coffee Organization (ICO) estimated 2008-2009 world coffee production at 126 million bags in 2008-2009, up from 117 million bags in 2007-2008. However, the ICO's world estimate is based on Brazil's official production estimate of 44.2 million bags which most agree is too low. World consumption was estimated at 125 million bags for 2008, up from 123 million bags in 2007.

July sugar's uptrend peaked near 15 cents on March 3rd. Since then, prices sold off, slipped below the 6-month moving average and may have found support at 11 cents. World production of sugar is expected to increase this year, but high energy prices are also keeping the demand for ethanol high (updated 5-9).

Fundamental Stats -

In spite of growing ethanol demand, there is plenty of sugar in the world. On November 20, 2007, the USDA said that 2007-2008 world sugar production will total 167.1 million tons, up from 164.1 million tons the previous year. World ending stocks are expected to increase 5.1 million tons to 46.6 million tons, or 28% of annual use. They also expect Brazil to produce 32.1 million tons of sugar in 2007-2008, up 2% from the previous year. Beware: the USDA commonly revises its world sugar data as far back as four years or more.

On February 26, 2008, the International Sugar Organization said that the world produced a 9.3 million ton surplus in 2007-2008, down from its earlier estimate of a 11.1 million ton surplus. Sugar is a commodity that is grown on every continent, but Antarctica, and producers are responding aggressively with more production. On April 29, 2008, Brazil pegged its first estimate of the nation's 2008-2009 sugar production at 34.5 million tons, up from 31.3 million tons the previous year.

July orange juice was trending lower until April 29th when it closed above the 50-day moving average and at its highest level in six weeks. Since then prices have chopped sideways and a close below $1.19 would look weak (updated 5-9).

Fundamental Stats -

It is getting harder to grow oranges in Florida. On May 9, 2008, the USDA kept its estimate of the 2007-2008 Florida orange crop from at 169 million boxes, up from 129 million boxes the previous year. The projected juice yield was increased from 1.63 to 1.65 gallons per box at 42.0 degrees Brix, down from last year's record high 1.65 gallons per box. On February 7, 2007, the USDA's Florida Field Office said that Florida had 70.85 million orange trees (on 529,241 acres), down 14% from two years earlier. As of March 31, 2008, there were 1.05 billion pounds of frozen orange juice in U.S. cold storage, up 28% from a year ago.

In 2007, Brazil's government expects the country to produce 17.9 million tons of oranges, down from 18.1 million tons in 2006. There are potential problems on the horizon. Brazil has lost over two million trees to sudden citrus disease and now orange farmers are concerned about an outbreak of citrus greening disease. There is no cure to this disease, it is fatal to the trees, and it may have already spread throughout Brazil. In addition to threats from nature, on January 9, 2006, the U.S. began charging Brazilian exporters a 15% tariff (or more, depending on the exporter's cooperation) for "dumping" orange juice in the U.S. The tariff originally began in August of 2005 and was as high as 31%. In all of 2007, Brazil's exports were up 7%. In the first two months 2008, Brazil's exports were up 2% from the previous year.