ADMIS News
COTTON
December Cotton rallied on Friday on a break in the dollar that came in the wake of Fed Chair Powell’s speech, which opened the door for a rate cut at the September meeting. The market has been trading sideways since it put in a low following the announcement of the draconian tariffs in late April. It got a shot in the arm earlier this month when the USDA lowered its planted acreage estimate for the US crop this summer, but the crop appears to be performing well, with weekly crop conditions reports running much above average. The US export pace is the slowest in 10 years. World Weather Service does say dryland cotton in southwestern parts of West Texas needs significant rain. Some showers are possible late this week into the weekend, but no general soaking rain is predicted. Other areas in West Texas will get rain with some significant amounts in the north. Dry conditions in the Delta us resulting in some crop stress. Rain is possible later this week and into the weekend that could offer at some relief.
COCOA
December Cocoa is lower this morning but inside Friday’s range. The market extended its recent selloff on Friday and traded to its lowest level since August 5, but it bounced and closed higher on the day. London markets are closed today for the Summer Bank Holiday in UK. World Weather Service reports that rain continued mostly to the north of the key production areas in Ivory Coast and Ghana over the weekend, with more significant rain falling in eastern Nigeria and northwestern Cameroon. Very little change is expected over the next week to 10 days. This is a typical pattern for this time of year; rain usually resume in late August/early September. WWS has hinted that the return or rains could be a little late this year. The market is awaiting arrival of the main crop, which officially begins October 1. Poor demand is still on traders’ minds after the poor 2nd quarter grind totals.
SUGAR
A Reuters poll of 10 analysts has sugar prices climbing from current levels as they view the shift from a modest global deficit 3 million metric tons in 2024/25 to a modest surplus of 3 million in 2025/26 as being priced into the market. The poll has expectations for Brazilian Center-South production around 39.7 million tons, down from a forecast of 41.6 million in February and below the last year’s 40.2 million. The UNICA reports have supported this trend, with the latest report showing cumulative production as of August 1 was running 7.8% below a year ago. The next report, which will cover the first half of August, should be out late this week. The poll also has India’s 2025/26 crop, which begins in October, is expected to come around 32.00 million tons, up from 26.22 million in 2024/25. 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
December Coffee was sharply higher on Friday and traded to its highest level April 30. The Cecafe president told Reuters on Friday that the recent rally in global coffee prices was due to the 50% tariffs the US has levied on Brazilian imports, as it has made exports to the US unviable and disrupted the markets. He said that importers are turning to other origins like Central America and Colombia but are facing higher premiums relative to the futures and that Brazilian coffee is currently seeing a substantial increase in demand in Europe and Asia. However, countries like Germany are re-exporting processed coffee to the United States. ICE certified stocks fell 223 bags on Friday to 729,606. This is after they fell to their lowest level since May 2024 on August 15. Brazilian coffee currently makes up about 18% of the total versus 49% a year ago. This is clearly disrupting the market, but is it tightening supply? World Weather Service says Typhoon Kajiki moved into the northern part of Vietnam overnight, producing heavy wind, rain and flooding in some production areas. These conditions will are expected to continue through the day and possibly result some damage to property and crops. Brazilian coffee areas will not be vulnerable to any crop threatening cold weather in the next two weeks, but rainfall will be limited and temperatures could rise above normal next week, which may result in some tress stress. The cold snap earlier this month is likely to reduce next year’s output. Safras & Mercado said on Friday that Brazil’s 2025/26 coffee harvest was 99% complete versus 98% at this point last year. Bloomberg reports that Starbucks is cutting back production at its five US roasting plants by two days starting in January as the chain undergoes an overhaul under its new CEO.
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