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ABN AMRO BANK N.V AGRICOMMODITIES MONTHLY

The ABN AMRO Bank N.V Agricommodities Monthly is produced by VM Group for ABN AMRO Bank N.V. As well as incisive commentaries, interviews and analyses of key global events in the soft commodity and agricultural markets, it also features a page of comprehensive news, analyses and data for each of the following: cocoa, coffee, sugar, edible oils, cotton, grains and frozen orange juice.

The report will be available on a complimentary basis, from the middle of each month, or email us to be added to our direct mailing list.

On a rolling quarterly basis the report will consider the cocoa, coffee and sugar markets in more detail. The report will be available on a complimentary basis from towards the start of each month.

2011

ABN AMRO/VM Group Agricommodity Monthly - September 2011 | Press release

VM Group in partnership with ABN AMRO today publishes the September 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities.

The September issue is a Sugar Quarterly. Our previous estimate, from our last Sugar Quarterly (published in June 2011) was that the period between Q4 2010, up to and including Q3 2011, would see a global deficit of 1.45 million MTRV. We have raised our global supply estimate from the June report to 174.01 million MTRV, while our consumption estimate is now 167.61 million MTRV, giving an overall surplus by the end of Q3 2012 of 6.4 million MTRV.

We envisage significant choke points emerging in Q2-Q3 2012, with deficits of 7.6 million MTRV and 5.24 million MTRV respectively. International sugar prices therefore ought to ease in the six months between the last quarter of this year and the end of the first quarter of next calendar year, although much depends on weather factors and the propensity of major potential importers – notably China – to buy, if prices prove sufficiently tempting.

For back issues and background information on the report, click here.

ABN AMRO/VM Group Agricommodity Monthly - August 2011 | Press release

VM Group in partnership with ABN AMRO today publishes the August 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities.

The August issue is a Coffee Quarterly. For the time being, we see no reason to alter our estimate for the global balance for the 2010-2011 season now in its closing months, and retain our estimate of a projected arabica surplus of 5.64m 60-kg bags, and a global robusta surplus of 4.89m bags. Our estimate for total arabica production is held at 85.14m bags, with consumption at 79.50m bags; total robusta output we estimate will be 55.71m bags and consumption 50.82m bags. For the approaching 2011-2012 season we still see output from South America improving with a global arabica surplus for the October-September season (which we also apply to Brazil) of 0.69m bags based on a production estimate of 80.97m bags and demand of 80.28m bags. The robusta surplus is still forecast to drop from 2010-2011 levels to 4.07m bags with production of 55.39m bags and demand of 51.32m bags. The end of the most recent La Niña weather event will see the return to more normal output levels of both arabica and robusta.

In addition, the report each month carries a commodity-related feature. In this issue we look at Ethanol in the US. The rise and fall of ethanol in the US public imagination has been nothing short of spectacular. Heralded as a saviour against foreign oil interests barely five years ago, the US Senate recently voted to pull the financial rug from under the ethanol industry. So, where did it all go wrong?

ABN AMRO/VM Group Agricommodity Monthly - July 2011 | Press release

VM Group in partnership with ABN AMRO today publishes the July 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities.

The July issue is a Cocoa Quarterly. The 2010-2011 season has been extremely good as far as West African production is concerned, although it has been disappointing for Indonesia. We have therefore revised higher our estimated global surplus for this season, to 227,000 tonnes from a previous 156,000 tonnes. Overall, we expect net global output during the 2010-2011 season to total 3.922 Mt. With global grindings almost flat year-on-year, estimated by us to be 3.695 Mt in 2010-2011, due to sluggish global economic growth, this substantial surplus has eased worries about a structural deficit – but perhaps only temporarily. Had Indonesia not experienced such heavy and consistent rainfall for many months, the surplus would have been even larger. What is remarkable is that the growing evidence of a global surplus as the current season has progressed has not resulted in a significant decline in international cocoa prices.

For the 2011-2012 season we estimate total global net production at 3.736 Mt and global grindings at 3.829 Mt, resulting in a deficit of 93,000 tonnes. Our view is largely posited on the unlikelihood of two successive such excellent seasons in West Africa. A recovery in Indonesian output is likely, but such are the extent of disease related problems there, that this cannot be relied on to be substantial enough to prevent yet another season of overall deficit.

In addition, the report each month carries a feature. In the July issue we explain what underlies the remarkable rise in international milk prices. As usual the report also carries analysis of other main agricommodities.

ABN AMRO/VM Group Agricommodity Monthly - June 2011 | Press release

VM Group in partnership with ABN AMRO today publishes the June 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities. The June issue is a Sugar Quarterly. This report gives our first estimate for the 2011-2012 season. Our global supply estimate is for 169.30 million MTRV (metric tonnes, raw value), while consumption we estimate will be 161.47 million MTRV, giving an overall surplus between Q4 2011-Q3 2012 of 7.83 million MTRV. Within that however, the fairly ample surplus envisaged for Q4 2011, of 12.91 million MTRV, narrows sharply in the first quarter of next year, and slips into deficit in Q2 2012, where it remains, albeit narrowing, in Q3 2012.

The period of deficits is gradually morphing into one of surpluses – but, as has been seen from the recent recovery in international prices, the market may still have a few twitches in the tail before this bull-run can be said to be well and truly over.

In addition, the report each month carries an informative commodity-related feature. This month we look at recent scientific evidence pointing towards declining solar activity. Are we headed for a new Little Ice Age? Probably not – but who can be sure?

May: Coffee Outlook | Press release

VM Group in partnership with ABN AMRO today publishes the May 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities. The May issue is a Coffee Quarterly.

The 2010-2011 season has been characterised by a degree of physical tightness, inevitably accompanied by heightened speculative investment, record prices, and extreme price volatility. Currently it’s difficult to avoid the conclusion that next season – 2011-2012 – will see more of the same, as in our view the supply-demand balance will tighten even further in both arabica and robusta markets. For the 2010-2011 season we have slightly lowered our estimate for the global surplus, for both arabica and robusta, from our last Coffee Quarterly (in February 2011). We estimate the arabica surplus will be 5.64m 60-kg bags (900,000 bags lower) while that of robusta will be 4.89 bags (290,000 bags lower). Total arabica production we see as being 85.14m bags, with consumption at 79.50m bags; total robusta output we estimate will be 55.71m bags and consumption at 50.82m bags. We also give our first tentative estimate for the 2011-2012 season.

In addition, the report each month carries a commodity-related feature. In this issue we look at the current drought conditions in western Europe and conclude that comparisons with the drought of 1976 are premature.

April: Cocoa Outlook | Press release

VM Group in partnership with ABN AMRO today publishes the April 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities. The April issue is a Cocoa Quarterly. Our estimate for the 2010-2011 global supply-demand outlook is a surplus of 156,000 tonnes, an increase of 113,000 tonnes from our previous Cocoa Quarterly, published in January 2010. This is entirely due to a much improved, year-on-year, main crop in Brazil, and ideal weather conditions for both main and mid crops in West Africa. Our estimate, extremely tentative at this stage, for the 2011-2012 season is, however, for a return to a global deficit, of 94,000 tonnes, based on the unlikelihood of two successive seasons of ideal crop developmental conditions in West Africa, and therefore the probability that Ivory Coast will revert to recent trend. The current season, 2010-2011, has - ironically, given the political turmoil in Ivory Coast - seen an unusual combination of very good weather matched by prices that have at some points been their highest for more than three decades. In addition, the report each month carries an informative commodity-related feature. In the April issue we take a sceptical look at efforts to tighten commodity regulation in the EU and US markets.

March: Sugar Outlook | Press release

VM Group in partnership with ABN AMRO today publishes the March 2011 edition of The Agricommodities Monthly. The March issue is a Sugar Quarterly. This report revises our previous estimates (published in our last Sugar Quarterly, in December 2010) for the period between Q4 2010, up to and including Q3 2011. In our last Sugar Quarterly we estimated that, over this period, the world market would be in deficit by 2.99 MTRV.i We have slightly reduced that to an estimated deficit of 1.45 million MTRV in this report. Clearly a degree of demand rationing has happened while supplies have been tight and international prices relatively high, although declining in recent weeks. We have raised our global supply estimate from the December report by 1.539 million MTRV, to 163.81 million MTRV, while the consumption estimate has not changed, at 165.26 million MTRV. Within this period, we expect the first nine months of 2011 to show a statistical supplydemand deficit, peaking during Q2 2011, with a deficit during that quarter of 8.16 million MTRV – our December report put the deficit during that quarter at 8.51 million MTRV. The deficit extends into Q3 2011, although at 2.67 million MTRV it is 724,000 tonnes lower than we forecast last December. While the deficit is not yet behind us, there may be light at the end of the tunnel – and international prices have arguably begun to reflect that growing awareness. In addition, the report each month carries an informative commodity-related feature. In March we look at the forthcoming USDA planting intentions’ survey for the US for this year. Corn and cotton are expected to be the big gainers of acreage – but there are many hurdles ahead, not least being uncertain weather conditions.

February: Coffee Outlook | Press release

VM Group in partnership with ABN AMRO today publishes the February 2010 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities. The February issue is a Coffee Quarterly. The global coffee supply-demand balance will remain relatively tight during the 2010-2011 season, leaving fairly low stocks of arabica as we go into the 2011-2012 season, which will see a lower arabica production out of Brazil. We see a surplus of 6.54m 60-kg bags for arabica in 2010-2011, and a surplus of 5.18m bags of robusta. Global coffee demand growth remains subdued in our view, at around 1%/year. Arabica coffee futures reached the highest in 14 years in February and robusta futures have risen to their highest in more than two years. We see scope for futures’ prices remaining high in both. In addition, the report each month carries a commodity-related feature. In February we look at Malaysia’s ambitions to raise its crude palm oil production.

January: Cocoa Outlook | Press release

VM Group in partnership with ABN AMRO today publishes the January 2011 edition of The Agricommodities Monthly, which reports on and analyses key developments in the global markets for agricommodities. The January issue is a Cocoa Quarterly. Our estimate for the 2010-2011 global supply-demand outlook is a surplus of 43,000 tonnes, an increase of 15,000 tonnes from out previous Cocoa Quarterly, published in October 2010. This is entirely due to a much improved, year-on-year, main crop in Brazil, which is running at around twice the level of the previous season. The cocoa market currently is focused on what might happen in Ivory Coast, the world’s biggest cocoa producer. On this matter we do not hope for either an easy or swift conclusion to what is a very difficult problem. In the report we say: “But in spite of all the ongoing political upheaval in this nation, Ivory Coast-produced cocoa is still getting to market – it is simply exiting via Ghana…. [Alassane] Ouattara hopes, with the support of int ernational entities, to starve Gbagbo’s supporters of cash – but a hungry cornered person is more dangerous. Moreover, let’s not forget that Gbagbo got a large chunk of the votes last November. This is a divided country and a military ‘solution’ imposed from outside the country will solve little – the lessons from Aghanistan are that the ‘peacemaker’ can rapidly come to be regarded as the enemy. To some extent, no doubt, Gbagbo, a Sorbonne-educated former history professor, has this at the back of his mind.”

2010

December: Sugar Outlook | Press release

The December issue is a Sugar Quarterly. This report revises our previous estimates (published in our last Sugar Quarterly, in September 2010) for the period between Q4 2010, up to and including Q3 2011. In our last Sugar Quarterly we estimated that, over this period, the world market would be in surplus by 1.2 million MTRV.i However, due to adverse weather conditions in several producers, notably Brazil and India, we have revised that estimate and now believe that the global market will, by the end of this period, be in deficit by 2.99 million MTRV. The balance for Q4 2010 could be seen to represent the lull before the storm – during this quarter we estimate that the global market will be in surplus, by 9.79 million MTRV. But the deficit will begin to open up during Q1 2011, such that by Q2 2011 the deficit will be 8.51 million MTRV, and only easing somewhat during Q3 2011, when the statistical deficit will be 3.39 million MTRV.

November: Coffee Outlook | Press release

The November issue is a Coffee Quarterly. The global coffee supply-demand balance will remain relatively tight during the 2010-2011 season, leaving fairly low stocks of arabica as we go into the 2011-2012 season, which will see a lower arabica production out of Brazil as its arabica trees go into the ‘off’ period of their biannual cycle. We see a surplus of 5.32m 60-kg bags for arabica in 2010-2011, and a surplus of 4.6m bags of robusta. Global coffee demand growth remains subdued in our view, at around 1%/year. Arabica coffee futures reached the highest in more than 13 years in November and robusta futures have risen to their highest in more than two years, although both have slipped slightly by the close of the month. There is scope for futures’ prices remaining high in both arabica and robusta, given weather uncertainties and a weak US dollar environment.

October: Cocoa Outlook | Press release

The October issue is a Cocoa Quarterly. Our estimate for the 2010-2011 global supply-demand outlook is a surplus of 28,000t, a reduction of 19,000t from our estimate in September, when our estimate was for a surplus of 47,000t. Our cautiously reduced estimate is based on the threat posed by La Niña to output, primarily in Indonesia and Ecuador – in the coming months the risk is that we may have to revise still lower our estimated surplus, depending on how severe the La Niña event proves to be. We have adopted an equally cautious position with regard to grindings, which are likely to improve but only very slowly, from 3.625 Mt in the 2009-2010 season to 3.706 Mt in the 2010-2011 season. The background to the world’s cocoa sector thus remains insecure. The report highlights the fact that although cocoa prices have recently been relatively high, this has yet to evoke a substantial supply-side response. Current international cocoa prices have retreated to a level that threatens the necessary global expansion of the area used for cocoa production.

September: Sugar Outlook | Press release

The September issue is a Sugar Quarterly. This report revises our previous estimates (published in our last Sugar Quarterly, in June 2010) for the period between Q4 2010, up to and including Q3 2011. In June we estimated that during the period from Q4 2010 to Q3 2011 (the 2010-2011) season an overall world market surplus of 5.64m Mt would emerge, and we lowered that slightly, to 5.14m MTRV (metric tonnes raw value) in our July report. In this report we estimate that the eventual surplus, come the end of Q3 2011, will actually be much smaller, at just 1.2m MTRV.

August: Coffee Outlook | Press release

The August issue is a Coffee Quarterly. The global coffee supply-demand balance will remain relatively tight during the current 2009-2010 season and, on our current estimates, only easing slightly in 2010-2011. Thus as we go into the 2011-2012 season, which will see a lower arabica production out of Brazil as its arabica trees go into the ‘off’ period of their biannual cycle, the global arabica ‘buffer’ will remain relatively thin.

July: Cocoa Outlook | Press release

The July issue is a Cocoa Quarterly. Our estimate for the 2009-2010 global supply-demand outlook is a deficit of 88,000t (unchanged from our previous report in June). We have revised lower by 25,000t our estimate for the global position in 2010-2011, implying a statistical surplus of 47,000t (against an estimated 72,000t surplus in our June report). The reduction to our previous forecast is entirely attributable to the forthcoming Ivory Coast main crop and is related to current weather uncertainties there. In addition, the report each month carries an informative commodity-related feature. In July we turn the spotlight on the severe drought that is afflicting the Black Sea region.

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