ADMIS News
COCOA
December Cocoa was lower overnight as the market continued in the sideways pattern of the past month-and-a-half. Decent growing weather in west Africa this summer has improved the outlook for the upcoming main crop, but current supplies are tight after the poor crop last year. There have been some concerns that current hot, dry conditions in Ghana could limit the extent of any expected rebound in their production. One item being debated is how successful that nation has been at combating swollen shoot disease. There was one story recently that they have fallen behind, but a report yesterday pointed to their $65 million investment in stopping the disease. ING expressed optimism that their crop could be over 700,000 metric tons in 2024/25 versus a recent Reuters survey calling for 650,000. Ivory Coast’s harvest is expected to begin late next month.
COFFEE
December Coffee was near unchanged overnight, as the market continued to assess the current crop situation in Brazil. There was a sharp rally on Monday on worries about potential damage from a frost event Sunday night, but the market gave back those gains just as quickly when it was shown the frost posed little threat to the upcoming crop. On the other hand, the ongoing dry conditions in key growing areas is still an issue. Robusta prices in Vietnam were slightly lower this week amid sluggish trade at the end of their crop season. Their new crop season officially begins in October. Indonesian Sumatra beans were unchanged from last week. ICE arabica stocks increased by 3,137 bags yesterday to 825,633.
COTTON
The cotton market faces good crop expectations and uncertain demand. Last week’s export sales report showed net cancellations of 950,000 bales for the first week of the 2024/25 marketing year. Cumulative sales had reached 4.102 million bales, which were the lowest for this point in the season in eight years. This morning’s report may show some improvement if only because the US dollar has recently fallen to its lowest level since March, which improves the competitiveness of US exports. Chinese economic data was mixed today. Industrial output grew 5.1% year on year in July versus +5.3% in June and expectations for +5.2%. Retail sales were up 2.7% in July versus +2.0% in June and +2.6% expected. World Weather Service reports good growing conditions in most of the cotton areas around the world. India and Pakistan have improved after some concern from extreme heat earlier in the season. Xinjiang, China has had good conditions enough to support higher yields. Harvest conditions in southern US Texas have been good, but boll sizes in Arizona and California may be down because of this year’s excessive heat. Hurricane Debby caused problems in Florida and North Carolina but spared the Georgia and Alabama. Southern drylands in west Texas may also be in trouble, but Texas’ crop conditions overall are running well ahead of a year ago and slightly behind average.
SUGAR
The UNICA report this week showed a decline in Brazilian sugar output in the second half of July from last year’s levels, but that was expected and apparently not enough to raise concerns about global supply. Yields are expected to decline in the coming weeks, but the trade is also looking at the potential for stronger output from India and Thailand this year given their improved rain coverage. Ukrainian white beet sugar exports fell to 10,300 metric tons in July as they ran up against the quota. Their sugar beet harvest may fall to 10 metric tons this year from around 12 million in 2023, according to agriculture consultancy APK-Inform, as the abnormal heat they experienced in July is expected to lower yields. Lower crude oil prices this week have added to the negative psychology for sugar, but oil prices were modestly higher overnight.
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