ADMIS News
COTTON
December Cotton was higher early Wednesday as the market continued to consolidate around last week’s contract highs. The weather forecast does shows little if any relief from the dry conditions in Texas or parts of the Delta. The forecast does show chances of rain and thunderstorms across much of the south on Thursday and Friday, with heavy rains and possible flooding in the southern half of Mississippi, all of Alabama and in northern Georgia.
COFFEE
December Coffee reached its highest level since last November on Tuesday but closed lower on the day and was near Tuesday’s low early Wednesday. Tight old crop supplies and uncertainty over the current crop in Brazil have supported the recent move, which is approaching contract highs. In early June Brazil seemed to be on its way to a bumper crop, but heavy rains in June and July interrupted harvest and drying and likely caused quality issues.
COCOA
December Cocoa was higher early Wednesday but inside Tuesday’s arrange, and the market is continuing to consolidate inside an ever-narrowing triangle pattern as is waits for seasonal rainfall to return in the next couple of weeks. The US CPC recently gave a 90% chance of a very strong El Nino during the September-November though the November-January periods. The previous El Nino event was accompanied by extreme heat and drought during the winter months, the heart of the West Africa dry season. Closer-in, there is a seasonal tendency for rains to retreat to the north in late summer, and this year has been no different. The rains would typically return in late August or September, and there is some concern that they will be interrupted or delayed by El Nino.
SUGAR
December Sugar was higher overnight, as it appears to be consolidating in the 17.00-18.26 area. French sugar maker Tereos said on Wednesday that it expects this summer’s extreme heat and drought to reduce its growers’ sugar beet yields by more than 20% from last year. Tereos said beet yields for its French growers were also expected to be about 15% below the average of the past five seasons. Domestic ex-mill prices in India have fallen nearly 20% from last week’s record high. Indian sugar industry official told Reuters yesterday that mills and refiners are likely to import only about 500,000 metric tons of raw sugar out of the 1 million tons the government has allowed duty-free, saying falling domestic prices have eroded the profitability of imports. It was India’s announcement that it would allow the import of 1 million tons that sparked the most recent leg of rally.
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