Agri price falls have gone far enough – except in cotton, says Rabobank
The drop in ag commodity prices – bar cotton – has gone far enough, Rabobank said, foreseeing “marginal support” for wheat futures, “bullish” prospects for cocoa and sugar, and scope for coffee price gains too
In another upbeat sign of demand, “there is news of factory expansion plans and companies considering new projects, which points to current capacity being near full usage.”
Bulls should be running for the hills
However, on cotton, the bank issued bearish comments, as it cut its price forecast for the last October-to-December quarter by US 3 cents to 65 cents a pound, behind the 68.74 cents a pound at which December futures were priced.
“Cotton bulls should be running for the hills,” Rabobank said, flagging forecasts that while world cotton stocks will remain stable in 2017-18, that disguises a shift in supplies from China to other countries, where inventories, in being available to the world market, are more price sensitive.
The shift of cotton “from China’s internal stockpile to global exporters drive an 8m-bale hike in available stocks, a factor which will continue to weigh on prices into 2018”.