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SocGen cuts grain price hopes, but warms to coffee
Societe Generale recommended agricultural commodity bulls focus their attentions on arabica coffee as it slashed its forecast for grain and soybean prices, and rated new crop corn a sell.
The bank said that the fall in arabica coffee prices to amongst their lowest levels in three years represented a "buying opportunity" for New York's December contract, given the threat to production in Central America from an outbreak of roya fungus.
SocGen arabica coffee price forecasts and (change on last)
Q1 2013: 146 cents a pound, (-2 cents)
Q2 2013: 150 cents a pound, (-5 cents)
Q3 2013: 155 cents a pound, (-2 cents)
Q4 2013: 160 cents a pound, (+1 cent))
Prices for quarter average, front New York contract
"Conditions in Central America have continued to decline and worries about the next crop year are now evident," the bank said, in a report issued narrowly before Rabobank also backed a rise in arabica prices ahead.
"Meanwhile, the latest production numbers from Colombia, through February, continue to show that the expected recovery this year is likely too optimistic."
"The global coffee surplus may turn out smaller than currently expected, resulting in a rebound in prices," SocGen said, forecasting prices averaging 160 cents a pound in the last three months of the year, above the 143.40 cents a pound at which the December contract was trading on Thursday.
SocGen cuts grain price hopes, but warms to coffee
Societe Generale recommended agricultural commodity bulls focus their attentions on arabica coffee as it slashed its forecast for grain and soybean prices, and rated new crop corn a sell.
The bank said that the fall in arabica coffee prices to amongst their lowest levels in three years represented a "buying opportunity" for New York's December contract, given the threat to production in Central America from an outbreak of roya fungus.
SocGen arabica coffee price forecasts and (change on last)
Q1 2013: 146 cents a pound, (-2 cents)
Q2 2013: 150 cents a pound, (-5 cents)
Q3 2013: 155 cents a pound, (-2 cents)
Q4 2013: 160 cents a pound, (+1 cent))
Prices for quarter average, front New York contract
"Conditions in Central America have continued to decline and worries about the next crop year are now evident," the bank said, in a report issued narrowly before Rabobank also backed a rise in arabica prices ahead.
"Meanwhile, the latest production numbers from Colombia, through February, continue to show that the expected recovery this year is likely too optimistic."
"The global coffee surplus may turn out smaller than currently expected, resulting in a rebound in prices," SocGen said, forecasting prices averaging 160 cents a pound in the last three months of the year, above the 143.40 cents a pound at which the December contract was trading on Thursday.
