Commodities Market Impact Weather: Stressful Dryness in Brazil

  OMAHA  -  Dry-weather stress in Brazil soybean areas and beneficial snow cover for the Southern

Plains wheat areas are the primary weather items for the commodity trade's attention Tuesday.

COLD AND SNOW IN MIDWEST

  The DTN ag weather forecast calls for more below-normal temperatures during the next week in the

Midwest. Damage to soft red winter wheat, however, appears to be limited due to additional snowfall

in the region. Areas that receive ice rather than snow may have some potential damage.

SNOW COVER FOR SOUTHERN PLAINS

  Southern Plains wheat areas will have well-below-normal temperatures during this week, with lows

dropping significantly below zero Fahrenheit in north and central growing areas. However, snow will

precede the lowest of the temperatures, which should protect the crop from harm. Feedlots in

southwest Kansas will see episodes of snow and cold weather during the week, which increases stress

to livestock.

HEAT STRESSES BRAZIL SOYBEANS

  In Brazil soybean areas, a hot and dry pattern continues during the next seven days at least. This

will deplete soil moisture and increase crop stress. This situation bears watching. Drier weather in

the northernmost corn and soybean areas will mostly favor early harvesting while soil moisture

supports late-filling crops. An exception to this is in the Sao Paulo area where dryness may affect

filling crops.

CONTINUED HOT AND DRY IN BRAZIL COFFEE AREAS

  Brazil coffee and sugarcane areas will see temperatures average above normal and rainfall below

normal during the next seven days. This likely will increase stress to coffee trees and developing

sugarcane during this period.

VARIABLE RAIN FOR CENTRAL ARGENTINA

  In central Argentina, episodes of scattered showers and thunderstorms during the next seven days

and no severe heat will favor pollinating corn and developing soybeans. However, the heavy nature of

these storms may mean local flooding. Sunflower areas of La Pampa and southwest Buenos Aires look

drier during this period.

STEADY WARMING TREND FOR UKRAINE

  The cold high pressure system that brought subzero F readings to many wheat areas last week

appears to be weakening. It is still cold but not as cold as it was late last week. Temperatures

gradually moderate during the week.

ADDITIONAL RAINFALL IN SOUTH AFRICA

  Moderate to locally heavy showers and thunderstorms continued during the weekend in South Africa.

This should maintain adequate to surplus soil moisture for maize and improve conditions for

sugarcane after earlier dryness. Local flooding may occur with the storms in the maize growing

areas.

Brazil coffee fears 'for real' - and a threat to 2015 too

So how much of the 18% jump in coffee prices in a week is down to justifiable production concerns, and how much to hype? The worries about the damage to Brazil's coffee crop from dry and hot weather are "for real", expert Carlos Brando says. Sure, the co-operatives which have been sounding the alarm over poor production prospects may always "have an interest in making the crop look smaller", to promote prices. "But the worries are for real. Their concerns are genuine," said Mr Brando, director at Brazil-based P&A International Marketing, and a consultant on the bean for the likes of the International Coffee Organization and the World Bank. The fears are being supported by P&A's network of agents, who sell coffee machinery, "throughout production areas. There is the same story from everyone", Mr Brando tells Agrimoney.com. Driest since 1943 The first problem is the lack of rainfall, highlighted by Sao Paulo city receiving its driest January since 1943, but with the main coffee-producing state of Minas Gerais next door receiving only a fraction of normal precipitation too. "In areas that would typically receive 100-200mm of rain, most municipalities have received 60mm or less." Data from consultancy Somar show southern Minas Gerais receiving 40-50% of average rains over December and January, although the north of the state has fared better. 'Hottest summer' Meanwhile, temperatures have been unusually warm too, a reflection of the lack of cloud evident in the dry spell. "It has been the hottest summer in Brazil in my life," said Mr Brando, speaking from the border of Sao Paulo state and Minas Gerais, "We are still getting 35-37 degrees Celsius, temperatures you get on the beach but not up here," at about 1000m. "Normally it would get to 30, 31, 32 degrees, and then you would get clouds and rain which would cool everything down." Cherries vs beans The impact on coffee has been to retard the growth of seeds within cherries. "Two months later, the conditions would have had a much smaller effect. But this has happened at seed formation time." This means that when cherries are hulled, a higher rate contain small beans, or prove hollow. "Usually from 100 kilogrammes of cherries, you will get about 55 kilos of seed," Mr Brando says. "Now you might find you are looking at 50 kilos, 45 kilos or lower. You might be looking at the same yield of cherries, but that the seeds are not fully formed." There is an impact on quality too, with a greater proportion of smaller beans meaning, for example that a "smaller percentage" of the crop is deemed suitable for making expresso coffee where customers are shown the beans before grinding. Next year too? As for the impact on the headline crop volume, while Mr Brando does not produce harvest forecasts, Minas Gerais might lost the equivalent of about 2.5m bags. "If you were expecting 52m bags before," from the Brazilian harvest, the world's biggest, "you might be coming down to 49.5m-50m bags," he said. However, whatever the impact on this year's production, it is important to remember that next season's crop is threatened too, with the dryness stunting growth of the branches which will carry the flowers, and cherries, for the 2015 harvest. "Next year is as much as an issue as this year," Mr Brando said. "The branches are not growing, and the leaves are not growing on the branches. "This is what I think people in the market are beginning to appreciate."

Brazil Coffee Weather - Feb 4

SAO PAULO AND MINAS GERAIS

SUMMARY- Mostly dry or a few light showers during the past 24 hours.

Temperatures 84-92F (29-33C).

FORECAST-

TODAY...Mostly dry or a few light showers. Temperatures 83-92F (28-33C).

TONIGHT...Mostly dry conditions or a few light showers. Temperatures 60-69F

(16-21C).

TOMORROW...Mostly dry or a few light showers. Temperatures 83-92F (28-33C).

OUTLOOK...Mostly dry or a few light showers Thursday through Saturday.

Temperatures near to above normal.

BRAZIL COFFEE PROSPECTS...

Mostly above normal temperatures and limited rainfall during the next 5 days

will deplete soil moisture and increase stress.

Southeast Asia Coffee Weather - Feb 4

INDONESIA

SUMMARY- Periods of rain, showers and thundershowers yesterday, 0.10-1.50+

inches (3-38+ mm), heaviest in southern and eastern areas. Temperatures 76 to

95F (24 to 35C).

FORECAST-

TODAY...Tropical rain, showers and thundershowers. Rainfall amounts

0.10-1.50+ inches (3-38+ mm). Temperatures 75 to 95F (24 to 35C).

TONIGHT...Showers diminish overnight.

TOMORROW...Episodes of showers and thundershowers, with some locally heavy

activity in the south, 0.10-1.50+ inches (3-38+ mm). Temperatures 75 to 96F (24

to 36C).

OUTLOOK...Daily showers and passing t-showers Thursday through Saturday.

Temperatures variable.

VIETNAM

SUMMARY- Mostly dry yesterday. Temperatures 75 to 88F (24 to 31C).

FORECAST-

TODAY...Generally dry conditions expected. Temperatures 74 to 89F (23 to

32C).

TONIGHT...Dry overnight.

TOMORROW...Continuing mostly dry. Temperatures 73 to 89F (23 to 32C).

OUTLOOK...Remaining dry Thursday through Saturday. Temperatures trend warmer.

THAILAND

SUMMARY- Dry in the region yesterday. Temperatures 84 to 97F (29 to 36C).

FORECAST-

TODAY...Generally dry. Temperatures 84 to 96F (29 to 36C).

TONIGHT...Mostly dry overnight.

TOMORROW...Mainly dry weather continuing. Temperatures 85 to 96F (29 to 36C).

OUTLOOK...The dry pattern persists Thursday through Saturday. Temperatures

mostly above normal.

SOUTHEAST ASIA COFFEE

CROP IMPACT- Rain and showers in portions of the coffee areas of Indonesia,

although somewhat lighter the past several days. The rainfall is mostly

beneficial. No major concerns at this time.

Colombia/Ecuador Coffee Weather - Feb 4

COLOMBIA AND ECUADOR

SUMMARY- Partly cloudy with widely scattered showers and a few thundershowers

during the past 24 hours. Temperatures 75-97F (24-36C).

FORECAST-

TODAY...Partly cloudy with scattered to widely scattered afternoon and

evening showers and thundershowers. Temperatures 76-97F (24-36C).

TONIGHT...Mostly dry or a few light showers. Temperatures 66-76F (19-24C).

TOMORROW...Partly cloudy with scattered to widely scattered afternoon and

evening showers and thundershowers. Temperatures 76-96F (24-36C).

OUTLOOK...Partly cloudy with scattered to widely scattered afternoon showers

and thundershowers Thursday through Saturday. Temperatures near to a little

above normal.

COLOMBIA COFFEE PROSPECTS...

The main crop harvest is winding down. The mid crop is developing.

Mexico/Central America Coffee Weather - Feb 4

MEXICO AND CENTRAL AMERICA

SUMMARY- Mostly dry conditions except for a few light showers across eastern

to southeast Mexico and Central America during the past 24 hours. Temperatures

61-90F (16-32C).

FORECAST-

TODAY...Mostly dry except for a few light showers through northeastern Mexico

and Central America. Temperatures 62-89F (17-31C).

TONIGHT...Mostly dry. Temperatures 30-74F (-1 to 23C).

TOMORROW...Mostly dry except for a few light showers through eastern Mexico

and Central America. Temperatures 62-89F (17-31C).

OUTLOOK...Mostly dry weather Thursday through Saturday but a few light

showers or some light rain across eastern Mexico Thursday into Friday.

Temperatures near to above normal except below normal across far northern and

northeastern Mexico.

MEXICO COFFEE PROSPECTS...

Mostly favorable conditions for the ongoing harvest.

West Africa Coffee Weather - Feb 4

WEST AFRICA

SUMMARY- Generally dry yesterday, save for a few spotty showers/t-showers in

the far southeast. Temperatures 83 to 99F (28 to 37C).

FORECAST-

TODAY...Mostly dry, except for a few pop-up showers/t-showers possible across

portions of the far southeast. Temperatures 84 to 100F (29 to 38C).

TONIGHT...Mostly dry overnight.

TOMORROW...Most areas are expected to be dry. Temperatures 85 to 101F (29 to

38C).

OUTLOOK...Generally dry in the region Thursday through Saturday, save for a

few isolated showers in eastern and central areas. Temperatures near to above

normal.

WEST AFRICA COFFEE

CROP IMPACT- Spotty showers and brief thundershowers recently. However, more

significant rainfall would be beneficial for trees in the coffee regions of

west Africa. Yet, it is normally dry at this time of year, with no serious

concerns at this time.

East Africa Coffee Weather - Feb 4

EAST AFRICA

SUMMARY- Patchy showers/t-showers in southwest areas yesterday, 0.10-0.60+

inch (3-15+ mm). Mostly dry elsewhere. Temperatures 73 to 101F (23 to 38C).

FORECAST-

TODAY...Passing showers and a few t-showers in Tanzania and Uganda, 0.10-0.60

inch (3-15 mm). Mostly dry elsewhere. Temperatures 73 to 100F (23 to 38C).

TONIGHT...Becoming dry overnight and any showers end.

TOMORROW...Periodic showers and t-showers mainly in southwest locales,

0.10-0.50+ inch (3-13+ mm). Generally dry elsewhere. Temperatures 74 to 101F

(23 to 38C).

OUTLOOK...Periodic showers/t-showers in southwest and west-central areas

Thursday through Saturday, generally dry elsewhere. Temperatures near to a bit

above normal this period.

EAST AFRICA COFFEE

CROP IMPACT- Recent tropical activity producing locally heavy rain/showers and

some flooding in portions of the Madagascar coffee regions. Elsewhere,

scattered showers mainly in the southern coffee areas of east Africa at this

time. The north region is increasing need of rainfall.

Brazil dryness spurs 7% jump in coffee prices

Coffee prices soared 7%, on track for their best performance in five years, on concerns over dry weather in central Brazil which is provoking concerns over this year's sugar cane harvest too.

Arabica coffee for March stood 7.0% higher at 133.90 cents a pound in late deals in New York, after earlier hitting an eight-month high for a spot contract of 135.25 cents a pound.

The jump was fuelled by forecasts for further dry weather in major coffee-producing areas of Brazil, the top arabica producing and exporting country, on top of a January which according to weather service MDA was the driest in some regions in at least 15 years.

'No sign of rain'

"North eastern Brazil did see some rainfall earlier in the season," which will have supported soil moisture reserves, MDA meteorologist Kyle Tapley told Agrimoney.com.

"But further south, through Sao Paulo [state] and southern Minas Gerais did not see rainfall. These areas are probably the greatest concern."

And there was little chance of rainfall beyond light showers.

"It looks like it is going to be staying dry in coffee areas for at least 10 days, and there is no sign of rain immediately beyond that."

However, he added that the greater concern appeared to be for sugar cane, for which Sao Paulo is the core producing state, given that it has borne the brunt of dryness, rather than coffee, with at least some parts of Minas Gerais receiving rains in recent months.

According to Brazilian consultancy Somar, the Cerrado of Minas Gerais received 88% of average rains over the past two months, compared with 40-50% in the south of the state.

'May be premature'

Separately, Societe Generale analyst Christopher Narayanan also urged caution over the fundamental rationale behind Monday's rally, which adds to gains late last week too - and means that arabica coffee futures have soared some 18% in a week.

"It may be all a bit premature," Mr Narayanan told Agrimoney.com.

"There is still time for the crop to recover. It may be a bit overdone at this point."

The extent of Monday's rally reflected technical strength, with futures – after more than a year - escaping a chart downtrend, which took prices to 101.95 cents a pound in November.

"Coffee has broken out of its downtrend and has found a bit of technical buying, and probably come across some buy stops."

'Remains to be seen'

Commerzbank too flagged the potential for Brazil's coffee harvest, which begins in earnest in June, to escape severe hard,

"The dry weather is giving rise to doubts about the extremely optimistic predictions for the next crop, though it remains to be seen whether irrevocable damage will be caused or whether damage will be averted by later rainfall," the bank said.

REGIÃO SUDESTE

04/02/2014: Na faixa leste de SP e sudeste de MG: possibilidade de pancadas de chuva a partir da tarde. No nordeste de MG: variação de nuvens com pancadas de chuva. No leste de MG: possibilidade de pancadas de chuva. No leste do ES: sol entre nebulosidade variável. Nas demais áreas da região: predomínio de sol. Temperatura estável. Temperatura máxima: 34ºC no sul de SP. Temperatura mínima: 16ºC na Serra da Mantiqueira.

05/02/2014: No litoral de SP e do RJ: predomínio de sol. Na faixa nordeste de SP, leste e noroeste de MG e oeste do ES: possibilidade de pancadas de chuva a partir da tarde. No sul de SP: variação de nuvens com pancadas de chuva pela tarde. No litoral norte do ES: possibilidade de chuva. Nas demais áreas da região: predomínio de sol. Temperatura estável.

Tendência: No nordeste de MG: variação de nuvens com pancadas de chuva. No litoral de SP e do RJ: predomínio de sol. Em SP, demais áreas do RJ e sudeste de MG: possibilidade de pancadas de chuva a partir da tarde. No nordeste de MG e centro do ES: sol entre nebulosidade variável. Nas demais áreas da região: sol e poucas nuvens. Temperatura estável.

Elaborado pelo Técnico em Meteorologia Reginaldo Irineu - CPTEC

Atualizado 03/02/2014 - 17h02

Clima no Brasil garante alta de mais de mil pontos para café na ICE

Um dia de ganhos incisivos. Assim pode ser descrita esta segunda-feira na ICE Futures US, com os contratos negociados de café arábica. Desde a abertura, num nível próximo das máximas da semana passada, os preços se mostraram firmes e vários stops de compra foram identificados ao longo da sessão, permitindo que o março rompesse várias etapas e atingisse, ao longo da tarde, seu melhor nível desde16 de maio do ano passado. Compras de especuladores e fundos nortearam as ações na casa de comercialização norte-americana. Tais aquisições vieram na esteirado clima no Brasil. Esse fator, até há alguns dias, era uma boa especulação entre os players que, no entanto, já demonstram um temor efetivo de que o calor intenso e as chuvas irregulares poderão fazer com que a produção de 2014 do Brasil seja ainda mais comprometida. É interessante lembrar que o país já via a safra deste exercício como inferior a dos dois anos passados, por conta do estresse natural das plantas e também por causa dos investimentos menos efetivos nos tratos culturais. Agora, porém, já se especula que os prejuízos poderão ser efetivos. Regiões chaves para a produção cafeeira do Brasil, como o cerrado e o sul mineiro, a mogiana e a alta paulista e o norte do Paraná continuam a sofrer uma onda de calor radical. No Estado de São Paulo, o janeiro foi encerrado com as maiores médias de temperatura desde 1943. Além do calor gritante, essas zonas produtoras ainda sofrem com níveis de chuva muito baixos. Tradicionalmente, o janeiro e fevereiro se mostram muito chuvosos e esse volume hídrico se mostra ideal para que os grãos de café se "encham" e estejam, por volta de maio, com peso consistente para serem colhidos. Diante dessa escassez de água, a tendência é que os grãos se tornem menores e sofram também problemas relacionados à qualidade.

No encerramento do dia em Nova Iorque, a posição março teve ganho de 1.075 pontos, com 135,95 centavos de dólar por libra peso, com a máxima em 136,40 centavos ea mínima de 125,00 centavos, com o maio registrando avanço de 1.065 pontos, com137,85 centavos por libra, com a máxima em 138,30 centavos e a mínima em 126,95 centavos. Na Euronext/Liffe, o março teve alta de 56 dólares, com 1.867 dólares por tonelada, com o maio tendo valorização de 60 dólares, para o nível de 1.839 dólares por tonelada.

De acordo com analistas internacionais, o dia foi marcado pelas especulações entre os players sobre o clima no Brasil. Vários relatos de empresas especializada sem meteorologia correram de mão em mão. Os dados que apontam que o cenário atual poderá continuar a ser verificado por um período ainda considerável deixaram muitos dos participantes em alerta e isso imediatamente se refletiu nos terminais. Rapidamente, níveis como de 128,00, 130,00 e até mesmo 135,00 centavos foram rompidos, permitindo um fechamento bastante sólido para o café.

"Tivemos uma sessão em que os compradores predominaram e os ganhos foram maiores que até mesmo aqueles esperados por operadores mais otimistas. A força compradora se mostrou intensa, principalmente na segunda metade do dia. Alguns players já falam em prejuízos concretos para a safra brasileira, o que teria motivado essa corrida compradora. Parece ser cedo para se falar em quebra ou em percentuais, afinal, nem sequer as chuvas foram retomadas no cinturão cafeeiro brasileiro. As altas talvez tenham sido proeminentes demais, o que pode demandar uma correção natural, mas é possível que o mercado passa a atuar em patamares mais altos, diante de uma realidade brasileira bem diferente daquela esperada ao final do ano passado, por exemplo", disse um trader.

"Só notícias baixistas já estavam precificadas, e que surpresas deveriam ser positivas para as cotações – no caso agora climáticas e de revisões de safras menores, não apenas para Brasil mas para a América Central. O tempo seco no principal país produtor gera opiniões para todos os gostos, desde as céticas que não crêem em perdas – e que alguns lembram as observações de Décio Ribeiro, que falava que café vem da África, e portanto uma planta extremamente resistente à seca – até as mais alarmantes que já quantificam perdas de mais de 5 milhões. O mais razoável, creio, é imaginarmos que a produtividade deve sim ser afetada, mas para dizer o quanto há que se esperar um pouco mais", indicou Rodrigo Corrêa da Costa, da Archer Consulting.

Modelos meteorológicos de médio prazo mostram que não estão previstas chuvas sobre as regiões produtoras de café do Brasil, pelo menos até 20 de fevereiro. Com isso, a expectativa é de uma reversão do atual quadro de baixa disponibilidade hídrica. Segundo especialistas, é provável que os cafezais entrem em estresse hídrico ao longo desse período, prejudicando o enchimento dos grãos, que deverão ficar mais leves e de menor tamanho na safra. Segundo a empresa Somar, até o dia 20 de fevereiro, deverão ocorrer chuvas apenas na forma de pancadas e, sobretudo, isoladas. Assim, alguns cafezais não serão prejudicados por esse quadro de calor e pouca água. Já a empresa Climatempo ressalta que não há previsão de chuva significativa nas áreas produtoras de café pelo menos até a segunda semana de fevereiro e que uma grande massa de ar quente e seco predomina sobre o Estado de Minas Gerais nos próximos dias.

Tecnicamente, o março na ICE Futures US tem resistência 136,40-136,50, 137,00, 137,50, 138,00,138,35, 138,50, 139,00, 139,50, 139,90-140,00, 140,50, 141,00, 141,50, 142,00,142,50 e 143,00 centavos de dólar, com o suporte 125,00, 124,50, 124,00,123,50, 123,00, 122,50, 122,00, 121,50, 121,00, 120,50, 120,10-120,00, 119,50,119,00, 118,50, 118,00, 117,50, 117,15 e 117,00 centavos.

Londres segue Nova Iorque e tem dia de fortes ganhos para café

Os contratos futuros de café robusta negociados na Euronext/Liffe tiveram uma segunda-feira de fortes ganhos, em uma sessão bastante movimentada, com um volume cerca de três vezes superior à média recente da bolsa britânica. O dia se caracterizou por compras especulativas e de fundos, sendo que os ganhos também foram sustentados pela oferta limitada de origens, dado que os asiáticos, principalmente o Vietnã, continuam de lado por conta das comemorações do ano novo lunar.

De acordo com analistas internacionais, o março atingiu nesta segunda-feira seu melhor patamar de preços desde 16 de agosto do ano passado. Os ganhos vieram na esteira de aquisições especulativas, mas também por conta de compras mais efetivas seguindo o bom comportamento de Nova Iorque, onde os arábicas subiram de forma intensa, refletindo a preocupação dos players com a possibilidade de as temperaturas altas e as chuvas irregulares comprometerem a safra brasileira de café.

"Muitos players que atuam nas arbitragens não pensaram duas vezes em adquirir mais efetivamente, seguindo as altas pronunciadas de Nova Iorque. O clima vinha sendo uma especulação junto a muitos operadores, mas, diante de vários levantamentos de empresas de meteorologia, que indicam que o cenário não deverá ter mudanças no curtíssimo prazo, a preocupação com prejuízos concretos cresceu e se reflete nas bolsas", disse um trader.

O março teve uma movimentação ao longo do dia de 15,8 mil contratos, contra 17,0 mil do maio. O spread entre as posições março e maio ficou em 28 dólares.

No encerramento do dia, o março teve alta de 56 dólares, com 1.867 dólares por tonelada, com o maio tendo valorização de 60 dólares, para o nível de 1.839 dólares por tonelada.