Commodity snapshot

The S&P GSCI Agriculture Index increased by 3% in the last fortnight. G&O prices have remained largely range-bound since the US election amid a stronger dollar and despite uncertainty around future Trump administration policy. Cocoa and coffee prices were heavily supported as the EU Deforestation Regulation (EUDR) postponement is yet to be finalized, threatening enforcement at the end of this year. Arabica prices saw further gains as forecasts for Brazil’s next crop have been lowered. Cocoa prices also swelled on reports of moldy beans, despite high arrivals.

In the last fortnight, ICE Arabica futures surged an astronomical 17.8% to USc 291.9/lb. In addition to weather concerns, worries about the EUDR are still front of mind. Despite the addition of (minor) amendments to the delay proposal in the EU parliament, negotiations between the council, parliament, and EU commission are still required.

ICE #11 Sugar prices moved down by 3% over the last fortnight, assisted by 2.3% drop in the Brazilian real. It is as if volatility evaporated in November. Certainly, fires don’t take place in the rainy season. Sugar mills in Brazil are starting to close (something not widely reported in the media). According to Nasdaq/Barchart, the number of mills closed is sitting at 38 as of November 18. This number will grow fast.