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Dailyfutures.comCocoa, Coffee, Sugar, and Orange juice Markets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Cocoa Chart Comment Cocoa trended higher for most of 2009, supported by a world production deficit. On January 29th, however, prices closed below the 100-day average - a bearish sign (updated 1-29).
Key Events - Cocoa 2010
2009
Fundamental Notes On March 4, 2007, the Ivory Coast government and rebel forces agreed to form a new government, but the national election keeps getting pushed back. The country has been divided since 2002 and it has been hard to reconcile the two sides since then. The other threats to the world's cocoa crop are primarily from weather - the swollen shoot virus and black pod disease. On May 1, 2009, Nestle announced that it will help farmers in West Africa plant one million new disease-resistant cocoa trees each year for the next ten years. 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 December 3, 2009, the International Cocoa Organization (ICCO) estimated that world cocoa production totaled 3.48 million tons in 2008-2009 and left 1.556 million tons of ending stocks, or 44% of annual use. On July 28, 2009, Barclays Capital predicted a world production deficit of 100,000 tons for 2009-2010 and on October 7th, Reuters news said that four other firms put out similar estimates.
Coffee Chart Comment Coffee prices have been choppy below $1.50 and on January 27th, prices fell below the 100-day average - a very bearish sign in spite of concerns that coffee supplies were tightening (updated 1-27).
Key Events - Coffee 2010
2009
Fundamental Notes On December 18, 2009, the USDA estimated 2009-2010 world coffee production at 125.2 million (60 kg) bags with implied use of 131.4 million bags. That puts 2009-2010 ending coffee stocks at 34.7 million bags, or 26% of annual use which is historically on the low end. They also estimate that Brazil harvested 43.5 million bags in 2009-2010, down from 51.5 million bags the previous year. On January 7, 2010, Brazil's government (Conab) said that they expect the coffee crop to increase to 47.3 million bags in 2010-2011. In its December report, the International Coffee Organization (ICO) said that 2009-2010 world coffee production totaled "around 123.7 million bags." With world consumption estimated at 132 million bags in 2009, they expect "that coffee supplies are likely to remain tight in 2010..."
Sugar Chart Comment The USDA tipped us off early when they predicted on May 2, 2009 that 2009-2010 would end with the lowest world stocks to use ratio in 16 years. The higher close on December 10th was also impressive and led to another nice rally. Prices are so high that I am content sit out (updated 1-22).
Key Events - Sugar 2010
2009
Fundamental Notes On November 19, 2009, the USDA said that 2009-2010 world sugar production will total 153.5 million tons up from 143.8 million tons the previous year. Sugar stocks at the end of 2009-2010 are expected to be down 1.6 million tons to 26.0 million tons, or 17% of annual use. If true, that will be the lowest stocks to use ratio since 1993-1994. The USDA expects the largest producer, Brazil, to produce 35.75 million tons in 2009-2010, up from 31.85 million tons the previous year. On December 16, 2009, Brazil estimated that they will produce 34.6 million tons of sugar and 25.8 billion liters of ethanol from 612 million tons of sugarcane in 2009-2010. Beware: the USDA commonly revises its world sugar data as far back as four years or more. On November 13, 2009, the International Sugar Organization (ISO) predicted that world production will fall short of consumption by 11.3 million tons in 2008-2009 and by 7.2 million tons in 2009-2010. On November 24, 2009, the ISO said that it expects world production to exceed consumption by .75 million tons in 2010-2011.
Orange juice Chart Comment On September 18th, the USDA said that Florida has the lowest commercial acreage of orange trees since 1986. On October 9th, the USDA estimated the upcoming Florida crop at 136 million boxes, less than expected. The extent of damage from January's cold spell is not known for sure yet. Currently, prices are trading between the 100-day average and $1.50 (updated 1-29).
Key Events - Orange Juice 2010
2009
Fundamental Notes On January 12, 2009, the USDA kept its estimate of the 2009-2010 Florida orange crop at 135 million boxes, down from 162 million boxes the previous year. The projected juice yield was reduced from 1.63 to 1.60 gallons per box at 42.0 degrees Brix, down from last year's 1.66 gallons per box. The report did not yet take into account any damage from weather since January 1st. On September 18, 2009, the USDA said that Florida had 492,529 acres of commercial orange groves, the lowest since 1986. On November 24, 2009, the USDA said that U.S. ending stocks of orange juice would fall from 681 to 445 million sse gallons, or 33% of annual use. As of December 31, 2009, there were 1.19 billion pounds of frozen orange juice in U.S. cold storage, up 9% from a year ago. Brazil, the world's largest producer of orange juice, has potential problems on the horizon. Brazil has lost over two million trees to sudden citrus disease and orange farmers are also 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 the country. In addition, 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. On November 24, 2009, the USDA said that it expects Brazil to produce 1.73 billion sse gallons of orange juice in 2009-2010, up slightly from the previous year. They also expect 1.699 billion sse gallons of exports in 2009, the lowest in eight years.
Kevin Bouffard, The Ledger.com. August 20, 2009.
Degrees Brix?Brix is a measurement of the juice's sugar content with a higher degree of Brix representing a higher sugar content. A common note on USDA reports says that one metric ton at 65 degrees Brix equals 344.8 gallons at 42 degrees Brix, or 1,405.88 gallons at single strength equivalent. Citrus GreeningCitrus greening is an incurable disease that hits orange, lemon, grapefruit and other citrus trees. It is spread by an aphid-like insect, the Asian citrus psyllid. It attacks the plant's vascular system and causes mottling on leaves and lopsided fruit that remains half-green. So far in the United States, it has shown up only in Florida, which provides 80% of the USA's orange juice, according to Florida Citrus Mutual, which represents 8,000 growers. Brazilian growers have been battling it for 10 years, says Michael Rogers, an entomologist at the University of Florida. Infection rates in Brazilian groves where the insects were not controlled rose to 40% from 2% in three years, he says. Oren Dorell, USA Today. October 2, 2007. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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