ADMIS News
COTTON
July Cotton was higher early Monday and was back approaching the contract high after a three-day selloff. US cotton areas are expected to see some rain this week but more is needed. Last week’s US Drought Monitor indicated that an area representing 98% of US cotton production was experiencing drought as of April 21, up from 97% the previous week and 21% a year ago. This is the highest percentage in drought at any time since January, 2000, which is as far back at the data indicates. World Weather Inc. said on Sunday that recent showers in south Texas and northeastern Mexico should help improve dryland crop development but much more rain is needed. West Texas will see some improving opportunity for rain later this week and into the weekend, and the Delta received some welcome rain over the weekend and more is expected over the coming week. The southeast will continue in drought, despite the development of some showers and thunderstorms that will offer temporary relief. Dollar weakness early Monday does at least make US cotton more competitive.
COFFEE
July Coffee closed lower on Friday after reaching its highest level in almost a month, and it was lower early Monday as well. The Brazilian arabica harvest is expected to begin next month, and it appears that price rallies are attracting sellers. The nearby June Brazilian Real took a tumble on Friday after reaching its highest level since February 2024. The strong real reduces the incentive for producers to sell for export, but harvest is harvest. A reversal lower in the real could change the psychology.
COCOA
July Cocoa was lower early Monday having backed off from Friday’s weekly high. A report from the Ivory Coast’s exporters’ association GEPEX on Thursday that the nation’s cocoa grind was up 1.4% from the previous year was a bit of an offset to the low first quarter grind data for Europe the previous week. Cumulative grind since the marketing year began in October has reached 334,711 tons, down 4.8% from the same period in 2024/25. This improvement in the GEPEX data and the better than expected Asian first quarter grind offers some hope that global demand may be stabilizing now that prices are down 75% from their peak in 2024. They just need to get Europe on board. The weather in west Africa has been generally supportive to the upcoming midcrop. World Weather Inc. said on Sunday that a routine occurrence of showers and thunderstorms will impact cocoa areas this week and that the moisture should maintain a favorable outlook for crop development.
SUGAR
July Sugar was higher early Monday, making five straight sessions of higher highs and higher lows. The lack of a breakthrough in US-Iran peace talks is supporting crude oil, which supports sugar on ideas it will boost cane crushing for ethanol at the expense of sugar. Gasoline futures reached a new contract high as well, which only adds to the incentive for ethanol. The Brazilian government is considering raising the ethanol blending in gasoline from 30% to 32%. Harvesting for the new Brazilian crop year is underway, and we expect an update from Unica later this month. Harvest usually peaks in July. The expected arrival of El Nino as early as June could reduce Asian cane crops this year. The India Meteorological Department is already expecting a below-normal monsoon
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