Please find enclosed this week’s market report
This week the packers waited in anticipation for buyers to come in heavy, while buyers played the waiting game hopping for a drop in pricing. In the end there was slight bump in prices due to some activity. While it wasn’t as heavy as expected pricing did hold and in some cases strengthened. The late crop is the most important factor here when it comes to where the market will eventually go. When the market will be flush with product then we could see a decrease but that is still a way away. We strongly advise to book QTR needs.
Pieces as per all my previous reports is trading very high and since we still don’t know how much of the crop will end up in pieces, we don’t anticipate this going down. We are experiencing delays in shipments on these grades.
The subjective estimate was released today at 1.85 billion pounds, which was expected. Current demand seems to be just as strong and the May shipment report numbers should back that up. If the May shipment report is as high as April then price will strengthen in a big way, since the growers need a carryover till new crop, so they need a lull of shipment of 9%+ which is unlikely.
With the continued uncertainty of next year’s crop, growers will most likely look to sell their remaining supply of 2014 crop at these record prices or higher, however they will still be hesitant to sell any 2015 crop.
We continue to see reports regarding the drought and this is going to be the major factor in the future. If the weather remains dry and demand stays where it is now, we must expect prices to continue to move up. If we get some rain and global demand is sluggish at these record high prices (which I don’t see), we could see the price come down. This leaves buyers in a very risky situation as these scenarios will not fully play out at least until October just as first shipments of 2015 crop start arriving around the world.
The Cold Storage numbers are most telling with very little crop left over, so expect this commodity to just keep climbing in price.
There are very few offers coming out of Bolivia, still flooding in areas of the jungle, and due to this not a lot of seed coming out for the processors and most shippers have withdrawn offers, due to this we believe it would be prudent to book now while the price is here because we won’t know how much more inventory will eventually hit the market.