Mixed Views on Cocoa Crop

COCOA

December Cocoa was under pressure overnight, possibly on reports of better growing conditions in Ivory Coast. Ivory Coast farmers told Reuters that recent light rains may have helped the upcoming main crop despite persistently cold weather. Farmers reported satisfactory pod development, with plenty of large, near-ripe pods on trees, and say the next main crop is progressing well, aided by light rains and good soil moisture. Others said they need more persistent sunshine. Ivory Coast’s cocoa grind dropped 31.2% year-on-year in July to 39,301 metric tons, according to data from exporters’ association GEPEX on Monday, with grinders citing poor bean quality and low volumes of the mid-crop. The total grind from the start of the 2024/25 season in October until the end of July stood at 515,055 metric tons of beans, down 4% from the same period last season. Ghanaian cocoa farmers are upset with the official producer price for the upcoming season, and have threatened to bar officers of COCOBOD from their farms in protest. They say the current price could fuel illegal smuggling to Ivory Coast and Togo. World Weather Service expects West African rains to shift southward into the main cocoa growing region late this month or in early September but possibly later. Most of the precipitation expected over the next ten days will be light and sporadic leaving some production areas in an ongoing drying trend.

COTTON

December Cotton is higher this morning and is close to taking out yesterday’s highs. News that India has exempted import duties on cotton for August 19-September 30 perhaps opens the door for US exports, or at least for some other producer that would nonetheless lead to an increase global import demand. The suspension of the duty is expected to help India’s garment industry, which is facing at 50% tariff on shipments to the US. Yesterday’s Crop Progress report showed 55% of the US cotton crop was rated good/excellent as of August 17, up from 53% the previous week and above the five-year average for this date at 45%. Texas was 49% G/E, up from 44% last week and above the five-year average at 29%. Mississippi was 40% G/E, down from 45% last week and below the five-year average of 62%. The report also showed 73% of the crop was setting bolls, down from 83% a year ago and below the five-year average for this date at 80%. Texas is about a week behind the average. The southern part of West Texas needs rain, but so far that does not appear to have hurt crop conditions.

COFFEE

December Coffee gapped higher overnight and traded to its highest level since June 11. Traders have been watching the steady decline in ICE exchange stocks as a reflection of roasters trying to secure supplies now that a 50% tariff on Brazilian imports into the US has gone into effect. However, ICE certified stocks have increased for two sessions in a row, climbing 1,366 bags yesterday to 733,105. Prior to this they had fallen for 14 straight sessions and reached their lowest level since May 2024 last Thursday. Brazil will see dry and unusually warm conditions this week that could cause some tree stress.

SUGAR

October Sugar found mild support overnight after falling to its lowest level since August 8 yesterday and successfully closing a gap from that day. The sugarcane technology company CTC said yesterday that cane field productivity in center-south Brazil fell to 81.3 metric tons per hectare from 86.1 tons in July 2024, a 5.6% decline. Recoverable sugar declined 4.8% to 140 kilograms per ton. Similarly, the UNICA report on Friday had second half of July production falling to 0.8% below year ago levels after being 15% above during the first half. Production was higher in the second half of the month, but it normally peaks for the season during that period. This supports ideas that Brazil’s production could continue to lag year-ago.

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