Brokers have turned less positive on prospects for ag prices, despite the rally in commodities as a whole, but foresee gains ahead nonetheless for some contracts, including coffee, corn and sugar.
Brokers have over the past month cut price forecasts for a range of agricultural commodities, signally in cocoa, in which they downgrade by $57 a tonne to $2,054 a tonne their expectation for average prices in the last three months of 2018, FocusEconomics analysis shows.
The cocoa downgrade took the forecast below the futures curve, with New York's December contract trading on Tuesday at $2,111 a tonne.
The weaker price expectation came "despite" a move by Cote d'Ivoire, the leading cocoa-producing country, "to lower the prices it pays to farmers for the 2017-18 crop season compared to the current season, which could calm the oversupplied cocoa market", FocusEconomics said.
The analysis group trimmed by 1.0% its forecast for ag prices in the last here months of 2017, limiting to 4.6% expected growth in values year on year.
By contrast, expectations for precious metals, base metals and energy contracts, flagging that non-ag commodities were maintaining a "strong" recovery "following the 2015-16 price collapse".
However, in other soft commodities, analysts remained more sanguine than investors, although in cotton a forecast for New York prices averaging 69.9 cents a pound in the last three months of next, shaved by 0.7 cents a pound, is not far above the price level that markets are factoring in.
The December 2018 contract stood at 68.13 cents a pound on Tuesday.
FocusEconomics, whose data is taken from commentators such as Commerzbank, Euromonitor and Itau BBA flagged expectations of price support for cotton, in the short-term at least, from "an anticipated rise in global cotton consumption".
And in coffee, a forecast for New York arabica prices averaging 151 cents a pound late next year was comfortably above the 138.55 cents a pound at which December 2018 were trading.
FocusEconomics noted expectations of support from a firmer Brazilian real, which raises the value in dollar terms of assets in which the South American country is a major influence.
Earlier in 2018, "prices are seen climbing… as global supply is exhausted ahead of next year's harvest".
Brokers were also notably upbeat on prospects for sugar futures, even after cutting the consensus price forecast for the New York raw sugar contract by 0.3 cents a pound to 15.8 cents a pound.
"Despite higher European Union production, [sugar] prices should drift up slightly going forward, as previous low prices encourage some producers to divert sugar cane to ethanol production," the analysis group said.
October 2018 futures were on Tuesday trading at 14.84 cents a pound.
And among Chicago grains, corn was a top bullish bet, with commentators sticking with a late-2018 price forecast of $4.25 a bushel, ahead of the $3.94 ½ a bushel being priced in by traders, and which did not look like offering sufficient incentive to producers.
"Corn prices should rise from their current low level, as a poor outlook for profits should encourage some producers to switch to more profitable crops, dampening global supply," FocusEconomics, whose analysis was based on broker forecasts ahead of last week's US Department of Agriculture Wasde report.
"Output is set to fall in major producers such as Argentina, Brazil and the EU, which should lend support to prices."
However, on soybeans investors held a somewhat neutral rating, seeing futures average $10.02 a bushel at the tail end of 2018, in line with the futures curve.
On Chicago wheat, the forecast for late-2018 prices was trimmed by $0.06 to $4.80 a bushel, taking it further below the $5.15 priced in by December 2018 futures.
FocusEconomics flagged that wheat "output forecasts for 2017-18 have been revised upwards in some countries", although "global wheat production is still set to be lower than in 2016-17, mainly as a result of a smaller planted area in the US and a drop in Australian wheat production".