ADMIS News
SUGAR
May Sugar was lower early Wednesday, extending a selloff from the four week high on Monday. Soaring energy markets in the wake of the US attack on Iran inspired a rally in sugar off ideas that it would encourage cane growers to crush more for ethanol at the expense of sugar, but doubts have emerged whether the gasoline prices will stay high enough, long enough for this change to occur. We have already seen a dramatic decline in sugar’s share of the crush during the second half of the 2025/26 marketing year in Brazil, but this has not had a big effect on total sugar production this year. The new marketing year starts April 1. DATAGO is projecting global deficits of 800,000 metric tons for 2025/26 and 2.68 million for 2026/27, which contrasts with other forecasters who have been calling for net surpluses. DATAGRO is citing a preference at Brazilian plants to produce more ethanol. They also cut their forecast for Indian 2025/26 production to 30.03 million tons from 32.10 million previously, while raising their Thailand estimate to 10.58 million from 10.05 million.
COFFEE
May Coffee was higher early Wednesday but inside Tuesday’s range, which saw the market trade to its highest level since February 20. The market has been under pressure in recent weeks as good weather in Brazil seemed to confirm a strong crop this year. However, rainfall has diminished this week, and net drying conditions are impacting the majority of the production region, according to World Weather Inc. More of the same was expected through today as temperatures were to trend a little warmer. Some increase in rainfall is expected starting Friday and continuing into early next week, with more routine rainfall later in the week.
COCOA
May Cocoa was higher early Wednesday and had moved above the 9-day moving average for the first time since February 9. In addition to being technically oversold, the market got some reassurance yesterday that the Ivory Coast cocoa regulator, the CCC, will continue its program of buying 100,000 metric tons of cocoa at the guaranteed main crop price, which will help pull some of the harvested cocoa that has been having trouble getting sold off the market (for a while). Around 23,000 tons have been purchased since the start of the operation, according to data provided by the Agricultural Interprofessional Organization for Cocoa (and Reuters). In addition, the CCC’s plan to move up the start date of the mid-crop by a month (to March 1) should encourage sales, and this may help the market find at least a temporary low.
COTTON
May Cotton was higher early Wednesday but inside Tuesday’s range down. The dollar was a little lower this morning and equities were a bit higher, which eased concerns about US cotton export prospects as well as global demand. The market fell to contract lows in early February, but it may have been too much to keep pushing the market lower with a growing season ahead of us. The export sales reports from two weeks ago was the highest in more than two years at 499,391 bales. Last week’s report showed net sales of 282,885 bales for the week ending February 19 (old and new crop combined), which may have disappointed some. Sales had reached 78% of the USDA forecast versus a five-year average of 90% for this point in the marketing year. The trade will be looking for this week’s report on Thursday, but the report may take a back seat to the Mideast war and its effect on the dollar and the global economy.
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