ADMIS News
COCOA
More concerns about west African supply sent nearby cocoa above the $4000 level for the first time since 1978 on Friday, and the market followed with further gains overnight. A delay financing for Ghana’s cocoa board (COCOBOD), which is the official buyer of that nation’s crop, is disrupting the flow of exports for the world’s second largest cocoa producing nation. This encourages farmers to smuggle their crops to neighboring countries to get their product sold, especially if they are desperate for funds. Overnight COCOBOD stated that it had taken concrete steps to secure enough funds to finance its annual cocoa purchases for the 2023/24 season. There were also reports that a group of Cameroon co-ops sold their cocoa at a record high farmgate price.
COFFEE
March coffee gapped lower overnight on follow through selling from Fridays’ weak action. The market may also have been pressured by the report that ICE exchange coffee stocks were unchanged on Friday, which was the first time the did not go down in several sessions. Stocks are still at their lowest level since April 1999. A report last week that showed Colombia’s October coffee production was up sharply from year ago levels also helped pressure the market going into the weekend. This report indicates their output is recovering from the 2021-23 La Nina weather event. Decent weather in Brazil over the past several weeks has improved the outlook for their 2024/25 crop. Shipping delays out of Brazil and tight near-term stocks provide underlying support.
COTTON
With the USDA supply demand report behind them, cotton traders may have taken some interest in the recent spike in US export sales, particularly from China. Last week’s export sales report showed cotton sales for the week ending November 2 at 439,698 bales. This was down from 544,953 the previous week but it was the second highest since June 1. The USDA report last week was negative, but the market put in a low the day before the report was released. The report showed an increase in US 2023/24 ending stocks, but it was from an extremely tight level. World ending stocks increased by 1.6 million bales, and consumption was lowered by 500,000. Last week’s Crop Progress report showed 57% of the US crop had been harvested as of November 15.
SUGAR
March sugar finished last week with a loss of 0.48 cent, which broke a two-week winning streak and marked a reversal from last Tuesday’s 12-year high. There are significant production issues in India and Thailand, but the market got a reminder last week of the strong Brazilian production that is expected make up for a good portion of the lower output elsewhere. The Brazilian trade group Unica released their latest supply report on Friday, and it showed Brazil’s Center-South sugar production during the second half of October at 2.35 million tonnes, which was 9.4% higher than the same period last year and above trade expectations. Domestic ethanol sales during October were 17.7% above last year. This was the third month in a row they were above 2022 levels. Reports of shipping delays at Brazilian ports have supported the market recently, and it awaits the latest news of progress on that front.
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