ADMIS News
SUGAR
Dry weather in Thailand and Brazil remain a concerns for the upcoming cane crops. Southern Brazil may be getting rain, but most of the Center South region remains dry. This helped the harvest get off to an early start, but growers fear it may peak early. World Weather Service reports interior southern Thailand remains dry biased and needs significant rain. India’s monsoon is expected to bring rains to many areas over the next couple of weeks, which could boost this year’s crop. This raises expectations that the government my eventually allow a resumption of exports, but they also want to support their ethanol production, pulls cane away from sugar production. The Brazilian real bounced on Wednesday after falling to its lowest level in 15 months. The weak real encourages exporters to sell.
COCOA
September Cocoa is near unchanged this morning. The market brought above a six-session trading range on Wednesday but close near unchanged, so it will have to prove that the breakout was “real.” Forecasts call for wet weather across southern West Africa during the 10-day outlook, which could favor cocoa development. The outlook has improved for the 2024/25 main crop as seasonal rainfall has come to the region. The market is also awaiting second-quarter grind data later this month to see what effect high prices have had on demand. European data is due on July 11 and North America and Asia on July 18.
COFFEE
September Coffee was higher overnight and traded to its highest level since June 26. The Brazilian real reversed higher on Wednesday after trading to its lowest level since March 2023 on Tuesday, and this could ease pressure on Brazilian exporters to price their product. The market remains inside its six-week range, finding support from tight Vietnamese supply but limited by the advancing harvest in Brazil. There is still little rain in the forecast for Minas Gerais, which allows the harvest to proceed, and the latest 15-day forecast shows no threat of frost for the region. ICE arabica stocks fell by 3,097 bags on Wednesday to 820,629.
COTTON
December cotton saw some deterioration in conditions last week, but ample rains this week in the southeastern states could reverse that. The weekly US Drought Monitor showed areas of moderate to severe drought increasing to 53% of the southeastern US as of July last week from 38% the previous week. The “South,” which includes the Delta and Texas increased from 16% to 20%. The 1-5 day forecast calls for rain across the cotton belt, with heavy amounts expected in the Carolinas and Georgia, where it is most needed. Hurricane Beryl is expected to bring heavy rains to southern Texas. The 6-10-day has below normal temperatures in Texas and the northern Delta and above normal in the southeast but above normal chances of rain. The dollar sold off on Wednesday to its lowest level since June 13 and it extended those losses overnight, which makes US cotton more competitive on the global market. Export sales will be released this morning. Last week’s report showed combined new and old crop sales at 158,190 bales for the week ending June 20, which was the lowest since April 25. Cumulative sales for the 2023/24 marketing year had reached 12.823 million bales, which was the lowest for this point in the season since 2015/16.
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