ADMIS News
Hurricane Milton is expected to make landfall near Tampa on Thursday as a very strong storm. It does not pose a threat to cotton areas, but it threatens citrus-growing areas.
COCOA
December Cocoa was near unchanged overnight as the market continued to consolidate near the bottom of a two-month range. Ivory Coast farmers interviewed by Reuters this week said that above average rainfall recorded in Ivory Coast’s main cocoa producing regions boosted hopes of higher output for the March-May (mid) crop. The main crop harvest is upon us, and farmers have said that they expect two strong crops per month from October through December. However, West Africa is expected to see continued periods of rain for the next 10 days, which could keep conditions wet and raise concerns about disease. Ivory Coast arrivals last week totaled 13,000 metric tons, down from 50,000 for the same period a year ago and counter to recent weeks above year-ago levels. Ivory Coast has reportedly seized 33 trucks carrying around 1,100 tons of smuggled cocoa beans across the border with Guinea. Last week the EU Commission proposed a 12-month delay to the implementation of the anti-deforestation rules that had threatened to cause interruptions of supply to Europe.
COFFEE
Rain is expected in all of Brazil’s major coffee growing areas this week, which could help flowering. However, a prolonged period of rain is needed restore soil moisture and help trees recover from the drought, and so far, this has been elusive. The rainy season typically begins around mid-September, but it has yet to emerge. World Weather Service expects some improvement this week and a gradual increase in soil moisture, with a more favorable distribution by the end of the month. Growers in Vietnam are starting to get concerned that a prolonged continuation of the rain could delay the start of the robusta harvest. Global exports of green coffee increased by 8.85 in August versus a year ago, increasing the total for the 2023/24 season by 10.5%.
COTTON
December Cotton was lower overnight despite another weekly decline in US crop conditions. Demand is still a concern, with dismal US exports this season. The weekly Crop Progress report released yesterday afternoon showed 29% of the US cotton crop was rated good/excellent as of October 6, down from 31% the previous week and 32% a year ago and this lowest it has been at this point in the season in at least six years. The five-year average for this date is 41%. Texas was 17% G/E, down from 20% last week and only slightly higher than 15% a year ago. The five-year average is 28%. Texas was 33% harvested versus 31% on average. Georgia is still suffering the effects of Hurricane Helene, which was 34% G/E, up slightly from 33% last week but down from 56% a year ago. US weekly export sales have reached 46% of the USDA forecast for the marketing year, which is the slowest pace in at least six years and compares to an average of 59% for this point in the season. This suggests USDA could lower its export forecast in the week’s WASDE report, which could offset any reduction in the production forecast.
SUGAR
March Sugar is slightly lower this morning and is close to taking out last week’s low. The market could be seeing pressure from the reversal lower in crude oil as well as the increase in rain in the forecast for Brazil this week. Seasonal rainfall is expected to gradually expand this week, but it looks like it will be too light to significantly bolster soil moisture in many areas. Follow up rain is expected next week. Germany’s sugar association WVZ raised its forecast for 2024/25 sugar production from beets to 4.95 million metric tons, up from an earlier forecast of 4.77 million and up from 4.22 million in 2023/24. German beet plantings were 5.7% higher than last year. A USDA attaché report lowered its forecast for Brazilian 2024/25 sugar production to 43 million metric tons from 44 million previously, due to worsening quality of the sugarcane. This would be down from 45.5 million in 2023/24. They also expect center-south crushing to end in mid-November at the latest this year, which would bring a longer than normal off-season of approximately five months.
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