REPORTS

Reuters - A new polar air mass is set to move over Brazil's agricultural areas this week, threatening further damage to coffee and sugar cane crops already hurt by strong frosts last week. This would be the third cold wave to bring freezing conditions to Brazil's Southeast farm belt this winter, something not seen in decades. Brazil has already been suffering through one of its worst droughts in 90 years, and dealing with transportation logistics delaying exports of key crops like coffee to various destinations. July 20's frosts were the strongest since 1994 and have already damaged up to 200,000 hectares (495,000 acres) of coffee fields. Arabica coffee futures rose nearly 10% on Monday after gaining almost 20% last week. The air mass will reach southern Brazil by Wednesday, according to forecasters, then move to key planting areas in Sao Paulo and Minas Gerais states on Thursday and Friday. Commodities broker Marex Spectrum said on Monday some sugar cane farms in Brazil had up to 35% of the fields damaged by frosts, though the general impact was smaller. Estimates for Brazil's sugar production will likely come down, it added.

Bloomberg - Brazil’s sugar-cane crop prospects are looking even worse than previously thought as unprecedented dryness hurts yields in the top producer, according to trading giant Wilmar International. Drought means cane output in the nation’s key Center South region will probably fall almost 100 million tons from a year earlier to 510 million tons in the 2021-22 season, Singapore-based Wilmar estimates. That’s down from 530 million tons forecast in April and would be the lowest in a decade, and there’s a chance production could end up even lower. “We have never seen such crop conditions, with a record deficit rainfall month after month,” Karim Salamon, head of sugar market analysis at Wilmar, said by email. “There is no reference of such a drought in Center-South Brazil during such a long period. It never happened.”

Platts - Brazil exported 1.49 million mt of sugar as of July 18 with a daily loading rate of 124,000mt, down 13% on year, according to Safras Agencia. Traders are postponing shipments due to high freight costs, with the freight from Brazil to China reaching an 11-year high of USD 64.50/mt, according to S&P Global Platts. As a result, sugar storage at ports is nearing full capacity, which is keeping Brazilian raw sugar for August loading at a 39point discount to the October contract, Platts said, compared to a 4point premium for October loading.

Agrar Heute - The Pfeifer & Langen sugar plant in Euskirchen, North Rhine-Westphalia, was hit by floods which also affected two sugar silos, according to the local farmers’ union RLV. The plant hopes to be able to fix the damage in time for the October harvest. Otherwise, some beet plantations were completely flooded although the association noted that the crop can survive a few days submerged in water. The water will have to recede for the damage to be clearer, it added. In Bavaria, the BBV union said grain crops would actually benefit from the rain as the weather previously was too dry. The group also said it was too early to assess the damage to the beet crop, although it added that warm and dry weather would help with crop development going forward.

 

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