ADMIS News
SUGAR
March sugar pressed slightly lower overnight but ended up back near unchanged, as the market was hesitant to push too far in either direction ahead of today’s UNICA report on Brazilian sugar production. The report is expected to show Center-South sugar production during the first half of November to be well above the same period last year. As of October 31, Center-South production was running 23.7% above year ago levels, and private surveys are calling for an even wider gap in today’s report. Port congestion has slowed the flow of exports out of Brazil’s ports, but that sugar should make it through eventually and help relieve tight global supplies.
COCOA
A weekly technical reversal in the cocoa market could become a concern for the bulls, but the market is still on track for its 12th positive month out of the past 13. West Africa’s main crop production continues to come up short. Ivory Coast cocoa arrivals totaled 64,000 tonnes for the week ending November 26, down from 123,000 for the same period last year. Total arrivals for the season, which began on October 1, have reached 481,000 tonnes, down 33% from the same period last year. The annual dry season is approaching, and El Nino could intensify those conditions through the first quarter of 2024. The demand outlook may receive a mild boost this week from early reviews of Black Friday online sales, which were stronger than expected. With cocoa prices reaching their highest levels since the late 1970s, traders are concerned that multinational firms may become more insistent on price breaks for their 2024/25 forward cocoa purchases.
COFFEE
March coffee was under mild pressure overnight but managed to hold above last week’s lows. IEC exchange stocks are 98,000 bags below where they were at the end of October and are on track for their tenth monthly decline in a row. This could put their stocks at the lowest since April 1999. Stocks were unchanged on Friday, but there are more than 22,000 bags pending review. Recent rainfall in Brazil’s main Arabica growing region has eased concerns about the upcoming 2024/25 crop, after a period of hot and dry weather. The USDA cut its forecast for 2023/24 Vietnamese production by a hefty 3.8 million bags to 27.5 million. This is expected to lower that nation’s 2023/24 exports by 2.5 million bags to 25.0 million.
COTTON
It is hard to build a bullish case for March cotton when Brazil stands ready to make up for the shortfall in US production this season. The market seemed to find support from a decent export sale report on Friday, but it failed to hold those gains and traded its lowest level in a week overnight. The export sales report showed US cotton sales for the week ending November 16 at 322,212 bales for the 2023/24 marketing year and 5,720 for 2024/25 for a total of 327,932. This was down from 358,735 the previous week and the lowest since October 19, but it was still the fourth highest weekly total since June. Cumulative sales for 2023/24 have reached 7.584 million bales, down from 8.685 million a year ago and the lowest for this point in the marketing year since 2016/17. Sales have reached 66% of the USDA forecast for the marketing year versus a five-year average of 68% for this point in the season. China has the most commitments for 2023/24 at 2.903 million bales, followed by Pakistan at 1.288 million. The fact that China remains an active buyer of US cotton may be viewed as supportive. Traders are still concerned that Brazil is becoming the key source of cotton for China this year and that China will lift its ban on Australian imports soon. Given Brazil’s strong crop and the relatively weak one in the US, it would not be surprising to see more business go to Brazil and Australia.
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