ADMIS News
SUGAR
May Sugar was lower early Monday, as the market continued to respect last Monday’s highs. Stronger energy prices support sugar on ideas that it will spark cane crushers to focus more of their activity on ethanol production than sugar. Brazil’s state oil company Petrobras has yet to increase local gasoline prices. It did raise diesel prices for distributors on Friday, but that should not affect ethanol demand. The All India Sugar Trade Association (AISTA) on Monday that Indian sugar mills exported 315,577 tons of sugar between October and February, mainly to the United Arab Emirates, Afghanistan, Djibouti, Tanzania and Sri Lanka. The government has allowed the export of 2 million tons of sugar in the current marketing year. World Weather Inc. says forecasts made by both NOAA and the Australian Bureau of Meteorology suggesting a strong El Nino will evolve this year may be too aggressive . World Weather did say confidence is high that an El Nino event will evolve later this year. This will change weather in Southeast Asia late in the second quarter or early in the third quarter toward drier than usual conditions. They added that India’s monsoon may start off favorably but could end up in a drier mode as well. The same is probable for central Africa and Central America, northern parts of South America and possibly southern Mexico later in the year.
COTTON
May Cotton was sharply higher early Monday, reaching its highest level since November 4. The market broke above the neckline of a head and shoulders bottom formation, which may have sparked heavy short covering. The fund position has been near a record level for some time, leaving the market vulnerable to such action. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 6,182 contracts of cotton futures for the week ending March 10, reducing their net short to 66,754, but that is still historically large. A dry trend in Texas is also supportive as production areas in that state need rain ahead the growing season. Reports of sharply higher fertilizer prices in the US due to restricted movement of exports out of the Persian Gulf is also supportive. Reuters reports that prices have spiked more than a third since the war in Iran began.
COFFEE
May Coffee fell to its lowest level since March 3 early Monday but did manage to recover to higher on the day as the session progressed. The market has been under pressure since failing to take out the February 13 high last Monday. Forecasts for Brazilian 2026 production remain strong due to ample rains for the most part since the start of the year. World Weather Inc. expects frequent and significant rains from northeastern Sao Paulo through Sul de Minas Brazil to southeastern Bahia over the next ten days, which sounds beneficial for the upcoming crop. Coffee traders and roasters told Reuters last week on the sidelines of the National Coffee Association annual conference in Tampa that farmers who are well capitalized after two or three years of high prices are reluctant to accept smaller values for their beans. The Brazilian real reaching its highest level in 3 ½ last week also makes farmers reluctant to sell.
COCOA
May Cocoa was lower early Monday on what appeared to be follow through selling from Wednesday’s high. The market found support a couple of weeks ago after Ivory Coast and Ghana appeared to find a solution to the backup of supply when they chose to lower farmgate prices, but there is still the issue of strong production this year that is expect to expand the global surplus, as well the reduction in demand from the record high prices in 2024 and 2025. Confectioners have lowered the amount of chocolate in their products and it may take time and an extended period of low prices for them to switch back. Demand uncertainty driven by the Iran war does not help.
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