ADMIS News
SUGAR
The UNICA Brazil sugar production report for the first half of May is scheduled to be released today, and it could be the key driving force for the market. The 2024/25 marketing year officially began on April 1, and so far, Brazil Center South production has gotten off to a strong start. As of May 1, cumulative production was 66% ahead of last year. Second-half April production was 84% higher. A pre-report survey of analysts conducted by S&P Global called for a more modest 6.3% gain for the first half of May. A low number could inspire short covering after the recent decline in July sugar to its lowest level in 14 months, while another high number could spark a resumption of the downtrend. Dry weather earlier this season is expected to pull yields down, eventually. Monsoon rains hit the coast of India’s state of Karala on Thursday, two days earlier than expected. Monsoon rainfall is expected to be 106% of the long-term average this year, which should support cane yields next fall. Ukraine said it will ban sugar exports to the EU for the remainder of the year because their quota has been met.
COFFEE
July NY coffee extended this week’s rally overnight to trade to its highest level since April 19, but it is slightly lower this morning. London July coffee is also lower after trading to a new contract high overnight. A USDA attached report yesterday projected Vietnam’s robusta crop at 27.85 million bags for the 2024/25 marketing year, down from 28.00 million in 2023/24 but up from 27.30 million in 2022/23. Indonesia exported 3,946.1 tonnes of robusta beans from the island of Sumatra in April, down 46.4% from the same month last year, according to the trade office in Lampung province. January-April exports are down 69% from last year. Brazil’s major Arabica growing regions have mostly dry weather in the forecast through the end of next week.
COCOA
With global risk sentiment taking a negative shift, July cocoa may be vulnerable to end of month profit-taking today, but downside may be limited ahead of the ICCO quarterly update, which is due out any day. The market closed above the 50-day moving average for a second day in a row yesterday but settled back on that line overnight. The Ivory Coast Coffee and Cocoa Board has told exporters that the usual 10-cent per kilo discount for the mid-crop will not be offered for deferred contracts. The discount is designed to compensate for tougher grading during the mid-crop season when beans are smaller and more acidic.
COTTON
In the past four sessions, July cotton has given up more than half of its gains from earlier this month when it bounced off 18-month lows. The prompt arrival of the Indian monsoon points to better crops this year, and although it is still early in season, US crop conditions are strong. The US drought monitor indicated that only 5% of US cotton production was in an area experiencing drought as of May 28, down from 6% the previous week, 28% a year ago, and 51% two years ago. The May lows could hold until the US crop gets further along. The USDA Acreage report on June 30 could be a major decision point.
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