ADMIS News
SUGAR
After several days of consolidation, sugar prices have regained upside momentum and are within striking distance of a new 11-year high. While Brazil’s cane harvesting and crushing are underway, the sugar market continues to find support from Asian supply developments. Indications that India will not allow further sugar exports this season continues to provide support, as recent 2022/23 production are showing more than a 3 million tonne decline from last season. A moderate rebound in the Brazilian currency gave sugar prices further strength as that should ease pressure on Center-South mills to produce sugar for the global export marketplace.
COCOA
After a sluggish start to the month, cocoa prices have posted five positive daily results in a row. With support coming from both the supply and demand sides of the market, cocoa should be able to extend its May rally. July cocoa maintained upside momentum as it reached a new 7-year high yesterday. While the April US CPI and German CPI readings were in-line with trade forecasts, both year-over-year rates had downticks from March, and extended their long-term decline from multi-decade highs last year. This provided a boost to cocoa prices as lower inflation should lead to improved demand for discretionary items such as chocolate.
COFFEE
Coffee prices continue to see coiling action. The market has seen four sessions in a row with a “higher low”, and that may be setting the stage for an upside breakout. In-line CPI readings from the US and Germany showed more evidence of a longer-term decline in inflation, and that provided support to coffee prices as that should strength out-of-home consumption. Brazilian Arabica growing areas should see dry weather over the next week which will help to speed up their current harvest, which pressured coffee prices late yesterday.
COTTON
July cotton closed moderately lower yesterday after chopping around in the lower end of Tuesday’s big range down. Traders are gearing up for the weekly Export Sales report on today and the monthly USDA supply/demand (WASDE) report on Friday. Last week’s export sales reports showed US cotton sales for the week ending April 27 coming at 258,202 bales, which was the highest since March 23. Cumulative sales for 2022/23 had reached 107% of the USDA forecast for the marketing year versus a five-year average of 105% for this point in the season. Drought-stricken west Texas has seen a significant increase in rainfall this week. The 1-5 day forecast calls for rainfall of up to 5 inches, and the 6-10 and 8-14 day forecasts show above normal chances of rain. It will be interesting to see if the weekly US drought monitor, which is released on Thursday, shows any improvement.
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