A Little Something for the Coffee Bulls Out There

I am long JO, full disclosure, inside 12631.

Courtesy of “superocean9,” via agrimoney.com, here is an interesting piece on coffee–Consider it some due diligence.

Goldman lifts coffee price hopes, but wary on ags

Goldman Sachs raised its forecast for coffee prices, thanks to a Brazilian drought deemed by Cooxupe as turning beans into “bubble wrap”, but the bank remained downbeat on prospects for agricultural commodity prices.

Goldman Sachs raised by 10 cents a pound its forecast for New York coffee futures, citing the “hot and dry weather conditions” in major growing areas in Brazil, the top producer of the bean.

“These weather conditions are expected to impact the 2014 arabica coffee crop, which was up to now expected to be record large,” the bank said.

Indeed, the comments came amid continued reports from Brazil of crop losses, including in Espirito Santo, Brazil’s main area for growing robusta coffee beans, which was thought to be relatively resistant to dryness because of more widespread irrigation than other areas.

However, according to state research institute Incaper, producers are expecting losses of some 20% on a crop originally forecast at 12m-12.5m bags.

SOURCE