US Coffee C Futures - Jul 24 (KCN4)

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Costa Rica came out being projected for 24/25 1.185mb (POST) vs 1.144mb USDA for 23/24, reduction 255mb, executive summary not optimistic :), rising consumption. (Production in 22/23 was roughly 1.4mb). Guatemala, El Salvador and Costa Rica combined reduction roughly 550mb, rounding a bit to bigger side :). In percentage reduction about 17%. Intact with El Salvador :).

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Viriato Magalhaes 10 hours ago

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*** Sorry, vs 1.44mb USDA for 23/24 :).

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Viriato Magalhaes 10 hours ago

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*** 255kb :) :) :)

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ShortDude 40 minutes ago

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Meanwhile, in Brazil, a stable 30C and zero rain, even in the forecasts. I know it's the dry season, but still, it should rain a little. According to NOAA, April was already drier and hotter than the multi-year averages.

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Viriato Magalhaes 13 hours ago

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Well, here comes Costa Rica: FAS/San José projects marketing year 2024/25 coffee production to remain near record low levels, as exchange rate challenges, persistent labor shortages, and above average precipitation forecasts prevent the sector from rebounding. Sluggish export sales in 2024 are exacerbating already challenging financial and agronomic conditions for Costa Rica’s nearly 27,000 coffee growers, who are likely to delay or reduce investments in rust resistant varieties, fertilizer applications, and other cultural practices 22/23 - roughly 1.4mb; 23/24 - decreased from 1.44mb to 1.181mb (POST), -18% revision :), 24/25 projection (POST) - 1.185mb, increase of ...4kb :) :) :). Consumption rising from 385kb 22/23 to 415kb 23/24 to (projected) 420kb 24/25 (POST). 1.44 - 1.181 = 259kb to subtract from global balance. Follows Guatemala and El Salvador.

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Viriato Magalhaes 13 hours ago

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Almost unchanged means from previously revised for -259kb number :). Summary doesn't sound optimistic. Up to now, El Salvador, Guatemala and Costa Rica combined subtracted from global balance about 550kb :) or 10% from may be would be 5mb :). Nobody knows, but I would risk to say that summary for CR doesn't point to any increase in production (4kb :)) in 24/25. If we would keep USDA number for 23/24 as one and only valid (not POST), then we would call it just :) projected decrease in production for 18% from 23/24 to 24/25 :). Nicaragua and Honduras are next :).

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Viriato Magalhaes 13 hours ago

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For fun: funds are getting/reading same reports and see same figures/comments as all of us here :).

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Viriato Magalhaes May 15, 2024 9:44PM ET

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As harvest has started, Noticias agricolas, 15/05/24: (In practically all locations, producers have reported low yields at this early stage of the harvest, with lower quality for the youngest coffees, which are green and small, with little sieve 17 above, as explained by Cepea researchers. For Robusta, the harvest in Rondônia and Espírito Santo is ahead of Arabica, as usual, but the low quality scenario for these first batches is also verified. According to data analyzed by Cepea, in Rondônia, around 30% of the coffee has already been harvested; and, in Espírito Santo, between 10% and 20%. ) This just first impression for sure as the harvest just started. Though 30% for RO and roughly 15% for ES would be :) more indicative than 5-10% for Arabica.

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Viriato Magalhaes 16 hours ago

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Municipalities covered by the study (9 not 10:)): Boa Esperanca, Colatina, Jaguare, Linhares, Nova Venecia, Pinheiros, Rio Bananal, Sao Mateus, Vila Valerio. Alisson (agronomist) from procafe previously mentioned several times that current season reminds him a lot 15/16. Thus, Icaper comments may not get realized :) (there is always some magic in the brazilian air) but they have the ground :).

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Viriato Magalhaes 15 hours ago

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From meteorological standpoint, drought has specific definition. When drought, solar radiation and high temperature present all at once (to a high degree) - it's a double trouble :) ! Or, in scientific language - multidimensional stress ! (DaMatta, 2003) DaMatta is my favorite guy ! I'm not sure he has time to drink coffee as he researches coffee all of his time :) :) :) ! Another good thing to know: there were successful cultivars created to resist the drought but not high temps :).

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Viriato Magalhaes 15 hours ago

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Even moderately high temperatures may affect crop productivity, by changing the balance between respiration and photosynthesis, the latter being increased to a greater extent, and to inadequate storage capacity. Economic production often depends on the development of organs like leaves and fruits, which under excessive high temperatures can grow too fast in relation to the available photosynthetic resources, resulting, e.g., in small leaves and shrunken fruits.

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Viriato Magalhaes 15 hours ago

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Final: Therefore, in our opinion, the coffee plant possesses a higher tolerance to elevated temperatures than most classical work seems to indicate. Otherwise, coffee productivity would be quite low in tropical environments, where leaf temperature easily reaches values above 30ºC during a great part of the day, especially in the outer leaves of the canopy, as already noted by DaMatta (2004a). Furthermore, rates of both photosynthesis and vegetative growth of the coffee tree are maximal throughout the warm season, as occurs in the main Brazilian producing areas (Silva et al., 2004). Therefore, in our opinion, the coffee plant possesses a higher tolerance to elevated temperatures than most classical work seems to indicate. Otherwise, coffee productivity would be quite low in tropical environments, where leaf temperature easily reaches values above 30ºC during a great part of the day, especially in the outer leaves of the canopy, as already noted by DaMatta (2004a). Furthermore, rates of both photosynthesis and vegetative growth of the coffee tree are maximal throughout the warm season, as occurs in the main Brazilian producing areas (Silva et al., 2004).

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Viriato Magalhaes 15 hours ago

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Coffee cultivation in the open is the usual practice in many parts of the world, and this provokes leaf exposure to high irradiance and the absorption of much more energy than that usable by photosynthesis. Such conditions may cause an energy overcharge and to an overheating of leaves that, in extreme cases, can reach temperatures of 40ºC or even above (Maestri et al., 2001), especially if stomata are closed, as occurs on sunny days in unshaded plantations . Only under these extreme conditions of high irradiance would the negative effects of high temperatures in fact promote leaf chlorosis and burning. To make a long story short :), it makes no sense to expect of devastation but without any doubts, high temps alone affect the vegetative function and the yield. And this is where the game of numbers starts: if, as example, only 10% of farms were affected to a dangerous extent or 50% ? In a case for ES 14/15, 15/16 as specific study has shown, coverage was serious.

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Alpha Centauri May 15, 2024 10:57AM ET

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OJ at fresh ATH :)

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Fudbal Fudbalko May 15, 2024 10:57AM ET

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It has everything to do with the price, and it has nothing to do with the price

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Viriato Magalhaes May 15, 2024 9:16AM ET

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Incaper: conilon cultivars for ES, yielding between 50 and 60b/ha (within first 4 years, non-irrigated) are known since 1993, most productive (at the time !) was launched in 2004 and yielded on average 70b/ha in first 8 non-irrigated crops, while improved clone reached about 120b/ha :). But for desired yield, tech recommendations and specific practices had to be followed. Thus, CONAB's yields of 54b/ha for RO and BA are nothing strange, assuming now is 2024 :), but ES yield of 42b/ha should have some meaning :) :) :).

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Viriato Magalhaes May 15, 2024 9:16AM ET

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In normal conditions, the temp of the leaf usually would be lower or within roughly +/-2C of the air temp. But when conditions are not that good, for instance, the soil is dry, no sign of wind :), etc - leaf temp may get over air temp for about 5-6C. As the result, less flowers and fruits can be produced by the tree, etc. This or that way valid for practically all plants. Conservatively, optimal range for arabica was considered as 18 - 23C, then it became roughly 14 - 28C, for R it was initially about 20 - 26C and then 20 - 30C, optimal means yield :). But as many studies show, tolerance should not be mixed up with optimal conditions. The ability to tolerate some temps does not always :) provide optimal yield. It depends on many other factors as well, but dry spells and high temps (high temps/humidity) by science :) do not support great yield.

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Viriato Magalhaes May 15, 2024 9:16AM ET

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A bit new pest, published Jan 23, 2024, CampoVivo, spotted N do ES and SDB: New species of mealybug The morphology of the Pseudococusela Group is very different from the root/rosette mealybug. It has two filaments on its body and greater mobility, ovules intensely and potentially generates 200 new mealybugs every 15/20 days, which spread very quickly in the field. The form of reproduction combined with the favorable (hot) climate has made management difficult, as despite spraying reducing the pest population, many nymphs remain and new eggs hatch between 5 and 8 days, which makes it difficult to break the cycle, not to mention with the protection that it creates with this “ball of wool” that is formed by the plague.

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Viriato Magalhaes May 15, 2024 9:16AM ET

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So, higher infestation is in play: Since last year, a problem has been taking away the peace of many coffee growers: the difficulty in controlling the mealybug from the Pseudococcus group, a new species that has affected conilon coffee plantations in the North of Espírito Santo and the South of Bahia. The dry period and low humidity have been pointed out as the causes of this scenario in the coffee plantations. ... this new Pseudococcus Group does not settle in the roots, but attacks branches, leaves and fruits. The pest has been causing damage since the middle of the second half of 2023, when heat and high temperatures intensified.

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Viriato Magalhaes May 15, 2024 9:16AM ET

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For fun: Young mealy bugs can be spread over long distances by wind. Adults can be carried by ants that travel from affected to unaffected plants. Ants also protect the mealy bugs from predatory insects. Therefore, controlling ants will allow predators to feed and reduce mealy bugs.

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Viriato Magalhaes May 15, 2024 9:16AM ET

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It was pointed out several times already :), but many :) :) :) other origins are not that advanced as Brazil is. What doesn't mean that the pest, etc should devastate every farm :), but most likely means that yield loss would be a bit bigger than in Brazil, if the pest is present and all the factors being equal. I would also risk to say the same about fungus. Besides, some studies confirm that high temperatures (longer periods) provoke mutations of fungus (different ones) and it starts often when temp crosses roughly 37C, etc. In some cases mutations increase can be 3-fold,4-fold,5-fold, etc... Not each new mutation would be more dangerous, but some usually are...

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Oscar Correa May 14, 2024 3:38PM ET

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Viriato the prices really are not as good as Mario would say. The exchange rate in the producing countries must be taken into account. In the case of Colombia, COP has appreciated a lot against the USD, so the internal price that producers receive is very low and more serious with discounts due to low quality.

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Rodrigo Faria May 14, 2024 3:33PM ET

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Agricultural News: "Logistics and climate crisis affecting all origins, Brazil expands coffee sales to producing countries Vietnam increased its purchases by more than 200%, while in Mexico the volume exceeded 800%"

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Viriato Magalhaes May 14, 2024 3:33PM ET

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Consumption growth in Mexico was about 5%, CAGR till 2027/28 was projected about 5.9%, consumption started slowly moving toward outdoor consumption but still main product is soluble. :)

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Viriato Magalhaes May 14, 2024 3:22PM ET

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El Salvador, USDA, May 14, 2024: 1) El Salvador's coffee production is expected to reach 555,000 sixty-kg-bags in marketing year (MY) 2023/24. The Salvadoran coffee sector continues to be affected by climate vulnerability and an absent long-term strategy. The MY2024/25 crop is forecast to reach 560,000 sixty-kg-bags. Lack of labor availability due to migration in rural areas is affecting farm activities such as pruning, tree renovations, and berry picking and processing. In addition, prices for inputs remain high, increasing production costs.

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Viriato Magalhaes May 14, 2024 3:22PM ET

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2) area - flat, trees - flat, production for 23/24, estimated by USDA was 670kb , POST revision - 555kb, revision of 115kb or 17% !!!; POST projection for 24/25 - 560kb :) :) :) (5kb or 0.9% - nonsense projection). Thus, from USDA 670kb for 23/24 to 555kb projected reduction is 115kb or 17%. (If to consider that 23/24 was 555kb, then last 2 seasons 22/23, 23/24 and projected 24/25 are flat :) ).

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Viriato Magalhaes May 14, 2024 3:22PM ET

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El Salvador does not play a major role, but percentage is what is important. Initial USDA projection went out to be revised for -17%.

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Nusret Cetinkaya May 14, 2024 12:24PM ET

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why rocket up now? This commodity surprises me with tht much daily votality

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ShortDude May 14, 2024 12:24PM ET

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3% daily is nothing special with coffee.

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