ADMIS News
COCOA
December Cocoa broke above a major resistance line yesterday that was drawn off the contract high from April, and that line could be a key bull/bear line in the coming sessions. Unofficial crop reports from Ivory Coast have indicated good growing conditions over this summer, but there was a bit of concern expressed regarding a cooler trend last week that could lower yield expectations, if it persists. News that the Ghana cocoa regulator Cocobod had lowered its target quantity for purchases this year to 650,000 metric tons from an earlier prediction of 810,000 was viewed as bullish yesterday. There are also concerns that they could struggle to raise enough money to purchase the next crop in the wake of their announcement that they would not take out a loan for purchases for the first time in more than three decades. Cocobod also announced yesterday that it would open its 2024/25 season on September 1, which is earlier than usual.
COFFEE
December NY coffee was slightly lower overnight but was still inside Tuesday’s breakout range. The London robusta contract was approaching its all-time high from that day. Robusta is leading the coffee market higher, as traders are once again focused on Vietnamese production. Cash traders there pointed out that trading activity in Vietnam was still subdued last week due to very low supply and that only 100,000 metric tons of beans remained before the new crop starts in October. World Weather Service has been reporting decent rainfall in Vietnam recently, and as of late yesterday, they were expecting daily rounds of showers and thunderstorms in the coffee areas through the next week which they said should support most crop needs. Dry conditions persist in Brazil, which is favorable to harvest but could hurt 2024/25 production. There was no rain overnight in coffee growing areas. Warm temperatures and limited rainfall are expected to prevail through Friday. ICE arabica stocks fell 660 bags yesterday to 841,570. This is down 843,110 from Monday.
COTTON
Will Exports Improve with Lower Dollar?
December Cotton has found support this week from a decline in US crop conditions and a weaker dollar that helps make US exports more competitive on the world market. The nearby Dollar Index fell to its lowest level since last December yesterday, and it has been on the decline since late June. A strong export sales report this morning could help extend this week’s rally. Last week’s report showed net sales of 110,946 bales of cotton for the week ending August 8, which was an improvement over the net cancellations of 949,623 the previous week. However, cumulative sales for 2024/25 had reached 30% of the USDA forecast for the 2024/25 marketing year versus a five-year average of 49% for this point in the season, and if things don’t improve, the USDA may be inclined to revised its forecast lower. No rain in Texas or Brazil overnight, and the hot and dry weather could lower crop conditions again in Monday’s update.
SUGAR
October Sugar was higher overnight, extending yesterday’ mild recovery from Tuesday’s 16-month low. The market has been pressure recently by an improved outlook for production in Thailand and India, and it has also seen strong output from Brazil. However, Brazilian production is expected to decline as the season progresses due to the dry conditions the region has experienced this year. As of July 31, cumulative 2024/25 Center South production was running 8.0% ahead of a year ago, but second-half July production was down 2.2% from the same period last year. Traders may be anticipating a sharper decline for the first half of August. No rain was reported in Brazil overnight, except for the far south, in southern Rio Grande do Sul. World Weather Service said that warm, dry conditions in southeastern Europe and southwest Russia are expected for at least another week, which could hurt sugar beet yields.
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