ADMIS News
SUGAR
October Sugar traded right up to the 50% retracement of the July 3-24 selloff overnight, and that level, 19.32, will be an important resistance area today. The market has seen a six-session rally in the wake of last week’s UNICA report that showed a sharp decline in Brazilian sugar production for the first half of July. Key growing areas of Brazil not likely to receive any significant rainfall over the next few days, which could keep their yields down. Yesterday the India Sugar Mills and Bio-energy Millers Association reported that despite the strong monsoon this year, India’s sugar production could fall 2% due to lower plantings this season. India received 9% more rainfall than average in July.
COCOA
December Cocoa was slightly lower overnight but stayed inside yesterday’s range. Cadbury parent Mondelez International missed expectations for second-quarter revenue, as budget-conscious consumers opted for cheaper, private label alternatives to name brands like Oreo and Chips Ahoy. Quarterly volumes fell 2.2 percentage points, while prices rose by 4.7 points. However, the higher prices helped the company surpass profit estimates. Growers in west Africa are optimistic about the main crop, which begins harvest in October. A mix of rain and sunshine is good for pod development and for avoiding disease. The market has been consolidating since putting in an all-time high in April.
COFFEE
September NY Coffee broke out of a three-session range overnight and traded to its highest level since last Thursday. London robusta coffee was also higher. Indonesia exported 7,252.1 metric tons of Sumatra robusta beans in June, which was down 52% from a year prior. The total for January through June has reached 27.0 tons, down from 70.6 for the same period in 2023, a 67% decline. On Monday it was reported that Vietnam exported 70,000 metric tons in July, down 35.7% from a year ago. Recent weakness in coffee prices has been attributed to the active harvest of robusta beans from Brazil, which has helped compensate for the tight supplies in Asia. Softs analyst Judith Ganes expects Brazilian exports to surpass 800,000 bags in July. The US-based Coffee Trading Academy reported this week that coffee the Brazilian coffee trees were normal or better than normal despite the low rainfall this season, but they also said robusta trees were the hardest hit. ICE arabica stocks increased by 6,452 bags yesterday to 821,108, which was the highest since July 2.
COTTON
December Cotton was lower overnight but was inside yesterday’s range. The weather forecast shows a potential for crop stress to develop in the Texas and possibly the Delta, which could help the market avoid a retest of last week’s lows, for the time being. World Weather Service says that the Delta could be dry and warm during the next ten days, while the southeastern states experience timely ran and more seasonable temperatures. They also said that most areas of the southern Plains will not see enough rain to counter evaporation. Temperatures are expected to be very warm to hot this week and possibly into next week, resulting in some crop stress. The NWS 6-10 day forecast has normal or much above normal temperatures across cotton growing areas, with normal or above normal chances of rain. The 8-14-day forecast has wetter and cooler conditions. None of this appears to present a big threat, but the decline in crop conditions last week may keep traders reluctant to push lower until the crop is further advanced. Cash market sources say cotton mill buying has moved up to 70 cents. India received 9% more rainfall than average in July, as the monsoon covered the entire nation ahead of schedule. This accelerated the planting of summer crops, including cotton. China will issue 200,000 tons in sliding-tariff cotton import quotas to non-state firms to meet the needs of their domestic textile industry, a government official stated. This is down from 750,000 tons in 2023. China has been largest importer of US cotton for the 2023/24 marketing year so far. Cotton may also find direction from the stock market, with the FOMC meeting results out later today.
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