Cooling Coffee Prices Hit a 3½-Year Low

Arabica coffee prices settled at a 3½-year low on expectations of an onslaught of beans from top grower Brazil. Coffee for July delivery on the ICE Futures U.S. exchange fell 2.8 cents, or 2.2%, to $1.2725 a pound on Friday, the lowest settlement for the most actively traded contract since Oct. 1, 2009.

While prices have been falling for much of the year as global supplies have exceeded demand, the latest leg of the drop comes as farmers in Brazil are harvesting new coffee beans even as they haven’t finished selling last season’s supplies.

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Disease Threatens Florida’s Citrus Industry

Florida’s citrus industry is grappling with the most serious threat in its history: a bacterial disease with no cure that has infected all 32 of the state’s citrus-growing counties. Although the disease, citrus greening, was first spotted in Florida in 2005, this year’s losses from it are by far the most extensive.

While the bacteria, which causes fruit to turn bitter and drop from the trees when still unripe, affects all citrus fruits, it has been most devastating to oranges, the largest crop. So many have been affected that the United States Department of Agriculture has downgraded its crop estimates five months in a row, an extraordinary move, analysts said.

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Sugar: prices down, huge global surplus

Sugar futures are down 10.8% this year, ending Wednesday at their lowest level since July 2010. Sugar prices are tumbling as investors brace for a rush of supply from Brazil this year.

Even as prices plumb nearly three-year lows, investors are betting that they will drop even more. Positions that profit when sugar prices fall hit an all-time high of 212,419 contracts—worth about $4.5 billion—on April 9.

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Corn posts biggest-ever two-day decline on big supply

Chicago corn prices experienced their biggest two-day drop on record, tumbling 12.6 percent, or 93 cents, as larger-than-expected U.S. stockpiles weighed on the market, causing hedge funds to sell heavily.

Pressured by corn, Chicago wheat fell to its lowest nearby price in nine months, and soybeans hit a nearly three-month low.

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How climate change impacts commodity prices

I came across this interesting discussion of the Great Climate Disconnect courtesy of General Electric.

GE has asked the members of its Citizenship Advisory Panel to reflect on trends and key challenges for sustainable development in 2013. This first post by Nick Robins tackles the gap between climate change risk and ambition.

The year ahead will be dominated by growing tension between ever-stronger evidence of climate change and the inadequacy of the global policy response. Drought in the USA in 2012 highlighted the vulnerability of commodity prices to intensified weather risk, and 2013 is set to be another year of above-average global temperatures. But global greenhouse gas emissions are continuing to rise, putting the world on track for overshooting the 2ºC “safe” target and ending up in a 4ºC world.

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Brazil orange harvest down 15%

The Brazilian orange harvest will be completed soon. Started last July, it should finish at the end of January, with a declining production. A Jan. 8 report from the Center for Advanced Studies on Applied Economics (CEPEA) in Sao Paulo, which monitors Brazilian agriculture, put the 2012-13 orange crop at 364 million boxes, a 15 percent decline from the previous season. Despite the smaller crop, Brazilian farm prices fell.

The 2012-2013 marketing year, which ends on June 30, was marked by storage issues. Due to a great harvest in 2011-2012 and decreased demand on the international markets, storage spaces have not been released. Last year, the United States had blocked imports of oranges from Brazil, after finding traces of fungicide.

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Weekly Orange Juice: Watch For A Price Bump

I expect to see orange juice prices pick up as we may be under way with futures appreciating 7% this week. As one can see, prices are bouncing off oversold levels and while past performance is not indicative of future results, let’s look at orange juice during the last four years.

Now in 2012 prices are starting from a depressed price and I think it is feasible into early 2013 to see orange juice prices gain 20% plus putting futures near $1.40; identified by the blue line and the 200-day MA.

Orange Juice Futures

via Weekly OJ: Watch For A Price Bump | Forexpros.

Soy, Wheat Fall as U.S. Forecasts Ease Supply Concerns

Soybeans tumbled to a four-month low and wheat fell the most in a month after the U.S. raised its estimates for crop inventory including corn, easing concern over tight supplies following the worst drought since 1956.

Soybean futures for January delivery fell 3 percent to close at $14.5125 a bushel at 2 p.m. on the Chicago Board of Trade. Earlier, the oilseed touched $14.49, the lowest for a most-active contract since July 3. On Sept. 4, the price rose to a record $17.89.

Wheat futures for December delivery dropped 1.7 percent to $8.865 a bushel, the biggest decline since Oct. 12. The price has surged 36 percent this year. On July 23, the grain reached $9.4725, the highest since August 2008.

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Longest Sugar Glut in Decade Extends on Indian Crop

Sugar will expand global supply already forecast by the International Sugar Organization to reach a record this season. Producers from Russia to Thailand raised output after prices averaged the most in three decades in 2011.

Futures fell 28 percent since March on prospects for a third straight annual surplus, helping to contain the surge in global food costs caused by droughts in the U.S., Europe and Australia.

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USDA releases new Crop Production report

USDA released today its October Crop Production report which shows corn production down slightly from September forecast, soybean production up 9% and cotton production up 1%.

Corn production is forecast at 10.7 billion bushels, down slightly from the September forecast and down 13 percent from 2011. This represents the lowest production in the United States since 2006. Based on conditions as of October 1, yields are expected to average 122.0 bushels per acre, down 0.8 bushel from the September forecast and 25.2 bushels below the 2011 average. If realized, this will be the lowest average yield since 1995. Area harvested for grain is forecast at 87.7 million acres, up less than 1 percent from the September forecast and up 4 percent from 2011. Acreage updates were made in several States based on administrative data.

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