Fear over supply drives cocoa and coffee prices on the New York Stock Exchange | Quotes

Cocoa was once again the most valued agricultural commodity on American stock exchanges in April, with prices further strengthened by restricted supply and persistent demand. Coffee futures contracts also rose significantly on the New York Stock Exchange last month, following the appreciation of Robusta coffee traded on the London Stock Exchange.

For another month, cocoa futures reached levels never before seen on the exchange. The price of the second-place contract reached the mark of US$11,878 per ton on April 19, driven by processing data in Europe considered robust even amid record prices. At the end of April, the second-place contract rose 34.35%, to US$ 10,039 per ton, on average, according to the Value Date.

In Europe, the main market for beans, cocoa grinding fell 2.2% in the first quarter compared to the same period in 2023, with 367 thousand tons processed. The number exceeded analysts’ estimates, which expected a decline of between 3% and 6%.

For Rafael Borges, market intelligence analyst at StoneX, as there is a lag between the price negotiated on the stock exchange and that paid by industries, demand can still benefit from this scenario. However, he adds, the record price will still impact crushing data for the remainder of the year.

“Tight supply issues persist, and this is not expected to change drastically until the start of the next harvest [2024/25] in October”, assesses Borges.

He projects a scenario considered “normal” for cocoa prices on the stock exchange, and predicts a price between US$6 thousand and US$7 thousand per ton in contracts expiring in September.

Arabica coffee also rose, mostly influenced by the price of Robusta. The price in New York increased 18.13%, trading at US$ 2.1863 per pound, on average, according to Valor Data. Concerns about the supply of Robusta coffee in Vietnam, the world’s largest producer, led the price to a record high on the London Stock Exchange on April 25, at US$4,304 per ton.

The lack of rain and high temperatures in the Asian country have fueled expectations of a failure in the 2024/25 harvest, which will be harvested from November onwards. Attacks by Yemen’s Houthi rebels in the Red Sea have also contributed to the rise in Robusta, as they harm the product’s transport routes leaving Asia.

Still on the New York Stock Exchange, contracts for concentrated and frozen orange juice (FCOJ) also appreciated. The second-ranked paper rose 1.41%, to US$3.6519 per pound, on average.

On the side of the falls on the New York Stock Exchange, cotton fell 9.67% in April, to an average of 84.68 cents per pound. The market still feels the effects of the adverse macroeconomic scenario, assesses Eduardo Santiago, independent consultant on the cotton market.

“The increase in consumption [de algodão] in retail it depends a lot on the macro scenario, which is very uncertain at the moment in Brazil and also abroad. The explosion of the dollar is a reflection of this. In the medium term, there is no encouraging news in the macro scenario that would lead us to believe in an increase in demand”, highlights.

Second position sugar contracts fell 5.08%, with an average price of 20.37 cents per pound. In addition to an improvement in the productivity of sugarcane fields in India and Thailand in the 2023/24 harvest, initial forecasts are favorable for Brazilian sugar production in 2024/25.

On the Chicago Stock Exchange, the “climate market” in the United States showed up for the first time in the 2024/25 harvest, driving an increase in wheat future prices. The cereal closed April up 4.99%, to an average of US$5.8114 a bushel.

Drier than normal weather in wheat-producing areas in the US has raised doubts about the potential of the winter crop that will be harvested from July onwards.

In the opinion of Luiz Pacheco, analyst at T&F Consultoria Agroeconomia, the appreciation of wheat caused by climate issues was exaggerated.

“The performance of investment funds on the stock market has a very strong emotional component. The weather in some areas of the US has worsened, it is true, but it is much better compared to last year. Therefore, we may see an accommodation in prices soon”projects the analyst.

Also last month, attacks on Ukrainian ports by Russia raised fears of an interruption in the supply of cereal produced in both countries and which is transported through the Black Sea.

In the opposite direction to wheat, soybeans depreciated 1.05%, to US$ 11.7926 a bushel in Chicago. April marked the beginning of the sowing of grain from the 2024/25 cycle in American territory. As so far there have been no problems with the weather in the country’s soybean regions, the expectation of robust production remains. This feeling is reinforced by the harvest in South America, especially with the prospect of a recovery in the harvest in Argentina.

Still in Chicago, corn futures ended April with an increase of 0.83% and an average price of US$4.4589 per bushel.