ADMIS News
COCOA
December cocoa broke out of its recent trading range overnight to trade to its highest level since September 25, as demand concerns took a back seat to expectations for tight supply for the upcoming season. There was a surge of Ivory Coast port arrivals during the first week of the marketing year as producers took advantage of higher minimum farmgate prices. In addition to being the world’s largest cocoa grower, Ivory Coast has become the world’s largest grinder, and that their strong performance is another sign of improving global demand.
COTTON
The US cotton crop is tightening, but global supply appears large enough to meet demand. In the USDA supply demand report last week, US cotton ending stocks were lowered to 2.8 million bales, down from 3.0 million in the September report. This is the lowest since 2016/17. The world numbers were revised down by some 10 million bales from the September estimates, but that was due to change in way the USDA accounts for the Brazilian crop, and it did not reflect any change to actual supply.
COFFEE
At last Tuesday’s low, December Coffee had declined 43.95 cents from its June 8 close. Since then, it has put together four positive daily results in a row and rallied 11.20 cents. The market broke out above its recent consolidation zone on Friday and finished the week with a gain of 8.85 cents. Low prices may have made Brazilian growers and their potential buyers reluctant to complete deals, and this could be the reason why Brazilian exports were surprisingly low in September. Brazil’s Arabica harvest is nearly finished, which will give the market a good idea of the potential size of Brazilian exports as their supply is drawn down over the next few months. Unlike Brazil, Colombia does not appear to have benefited much from the conclusion of La Nina earlier this year.
SUGAR
Sugar followed crude and gasoline higher on Friday, and any further gains in energy prices, along with supply concerns out of south Asia, could keep sugar well supported. Higher crude and gasoline prices provide incentive for mills in Brazil and India to shift more of their cane crushing from sugar over to ethanol production.
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