ADMIS News
COFFEE
December Coffee turned lower early Tuesday after running up against resistance at the 21-day moving average at 297.90. The market has found support from tight near term supply and stubbornly low exchange stocks, but the weakness in the Brazilian currency encourages Brazilian producers, roasters, and exporters to sell or price their product. The Brazilian real has been drifting lower for the past several sessions. It is still well off the spike low from last Monday, but it is moving in that direction. Vietnam exported roughly 1.9 million bags of coffee in October, +60% from the same period last year. Cumulative exports for the calendar year have reached 26.15 million bags , up 18.8% from last year. ICE certified arabica stocks fell 4,151 bags on Monday to 220,917, their lowest levels since September 15 (the 26-year low). Southern Indonesia coffee has seem some periodic showers and thunderstorms recently, which is expected to continue through this week. Much of the rain will be light, but it will still provide some relief their drought.
COCOA
December Cocoa was lower early Tuesday but in a narrow range. The dry season is approaching in West Africa which may provide some support to the market on concerns that El Nino will make this year’s season worse. World Weather Inc. says late-season erratic showers and thunderstorms will continue to impact west-central Africa through the coming week to ten days. Most of the precipitation will be light, but a few pockets of moderate rain may evolve as well. Ivory Coast production areas are among the driest. Ivory Coast port arrivals have reached 209,500 tons since the marketing year began, down from 304,000 at this point last year and despite this year’s official starting one month early in September. This is the lowest for this point in the season in at least six years. The five-year average is 327,400. ICE cocoa stocks increased by 7,970 bags on Monday to 3.702 million, reaching their highest level since May 23, 2024.
SUGAR
March Sugar sold off sharply early Tuesday to its lowest level since September 28. Reports of a surge in output in India, coupled with a weak Brazilian real and burdensome net long position held by the funds likely fueled the selloff. There may have also been some residual selling in the wake for Monday’s sharply lower crude oil prices, but oil prices take taken back some of those losses by early Tuesday. India’s National Federation of Cooperative Sugar Factories said the nation’s sugar production totaled 845,000 metric tons in October, up from 100,000 for the same period last year. Maharashtra, the leading sugar-producing state, produced 720,000 tons versus none for the same period last year. Maharashtra started their harvest early this year in order to ease tight supplies ahead of festival season, but there have been concerns that this will lead to lower production overall if it means they are harvesting before the cane too early. More El Nino-linked rains are forecast for Brazil this week, which could keep increasing the chances of an early end to the harvest.
COTTON
December Cotton fell below the October 2 low early Tuesday to its lowest level since early July. The weekly Crop Progress report released late Monday verified the harvest pressure the market has exhibited recently, 63% of the US crop having been harvested as of November 1, up from 52% the previous week and ahead of the four-year average for this date at 54%. Texas was 61% harvested versus a five-year average is 46%. Georgia, Arkansas, Misssissippi, and Missouri are all ahead of the average pace. However, the lower than normal conditions prior to harvest does raise concerns that production could be lower than current forecasts. The dollar was slightly higher overnight after falling to its lowest level since October 22 on Monday. A weaker dollar is viewed as beneficial for US export competitiveness. Oil prices were higher early Tuesday and had taken back roughly half of Monday’s losses on reports of US attacks on an Iranian island near the Strait of Hormuz. Higher oil prices are viewed as supportive because they make man-made fibers more expensive to produce.
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