ADMIS News
COCOA
The trade awaits the arrival of the West African main crop, which officially begins in October. The weather there has been dry over the past month, but that is not unusual for this time of year. Rains should resume in late August/early September, but they could be delayed. There were mixed reports from Ivory Coast growers this week, with some citing good pod growth and others complaining about cool conditions. This may not be an ideal setup for a strong crop, but we are also not hearing any consistent complaints either. World Weather Service expects rainfall to shift southward late this month and in early September. Until then, precipitation in key cocoa production areas will remain sporadic and often light. The greatest rain may be a little slow in returning this year and that may raise a little concern, but it should eventually arrive. Most of the precipitation expected during the next week will be light and sporadic leaving some production areas in an ongoing drying trend.
SUGAR
October Sugar is inside a trading range bound roughly 16 and 17 cents. Thailand and India are expected to see strong cane crops this year, but Brazil’s output is running about 7.8% lower than last year. On the other hand, Brazilian crushers continue favor sugar production over ethanol, with sugar’s share of production currently around 52% versus 49% a year ago. Ethanol producers in Brazil have expressed interest in corn as a feedstock as opposed to cane. Dealers interviewed by Reuters said supportive factors in the sugar market include the recent rise in refining margins and sentiment that strong imports into China in July are likely to continue for at least the next couple of months. World Weather says Brazilian sugarcane areas will NOT be vulnerable to any crop threatening cold weather in the next two weeks, but rainfall will be minimal.
COFFEE
A sharp rally in robusta beans, the possibly of frost damage in Brazil, and decline ICE exchange stock have supported an impressive rally in the coffee market this month. Earlier this week the Brazilian coffee cooperative Expocacer said that the cold snap earlier this month reduced the size of the 2026/27 coffee crop in Cerrado Mineiro by around 412,000 60-kg bags. This represents about 1% of Brazil’s total arabica production for 2025/26, currently estimated at around 40.9 million bags. ICE certified stocks fell 474 bags yesterday to 736,099. This followed three days of increases after they fell to their lowest level since May 2024 last Thursday. Reuters reports that coffee prices in Vietnam continued to inch up this week due to a scarcity of beans at the end of the harvest season. Current weather has been favorable, but heavy rainfall in Indonesia could have hurt the growth of coffee cherries. World Weather Service says is watching a tropical disturbance in the Pacific that is likely to become a cyclone when in reaches landfall in central or northern Vietnam early next week. Brazil could see additional warming this week, which along with the lack of moisture could contribute to tree stress, but this also reduces the threat of any more cold spells.
COTTON
December Cotton continued this week’s choppy, rangebound action overnight. The announcement this week that India was suspending its 11% import duty on cotton was welcomed by US cotton growers, as it opens the door for more desperately needed export business. This development was probably too late to show up in today’s export sales report, which will reflect business through last Thursday. Nonetheless, traders could be expecting a strong report this week as we move further into the 2025/26 marketing year. The US crop is in good shape, with crop conditions running above average in general and well above average in Texas. However, parts of West Texas are drying out, and southwest part of the region needs rain badly. The Delta needs rain as well. In Xinjiang, China, temperatures have been chilly recently and the area needs a warm-up to support crops more favorably. A gradual return of more normal weather is expected in this coming week. Up to this point conditions in that region have been quite favorable.
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