Softs –
Brazil’s Conab issued their first official projection for 2017 coffee production yesterday. Conab is projecting coffee output in a range of 43.7-47.5 million bags, which would be down fairly significantly from 51.4 million in 2016. The smaller crop doesn’t exactly come as a surprise considering the biennial nature of Brazilian production. As the chart from Conab’s report shows, we are in the “down” year of Brazil’s coffee production cycle. Still, ICE certified stocks of coffee are at their lowest level since 2011 so the coffee market will be very sensitive to production losses below Conab’s range.
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