ADMIS News
COTTON
The industry trade group Cotton Australia raised its estimate for Australian production to at least 4.5 million bales, up from previous expectations of below 4 million. This comes after plentiful rains fell in the eastern and southern parts of the nation following a long dry period last year, and it could put a negative spin on the market today. May cotton is still consolidating after its move to contract highs late last month. The USDA supply/demand report last week showed the US cotton supply getting even tighter, but global supplies were still ample.
COFFEE
The coffee market has had trouble sustaining upside momentum since the start of the year. Each of its three recovery moves has posted a higher high, but the market is defined by its December high and its January low. The CPI report yesterday showed that consumer inflation has remained subdued, which could help support the out-of-home demand outlook for coffee. Above-normal rainfall over Brazil’s major Arabica growing region last week is viewed as beneficial to their upcoming crop, and this may have kept further gains in check.
COCOA
There will be a point where high prices will stifle demand, but cocoa still appears to be below that level. Low expectations for the West African mid-crop have reportedly left commercial buyers scrambling. May cocoa broke above $7000 yesterday and extended those gains overnight. Ivory Coast’s market regulator warned exporters against paying above the mandated price for beans delivered to facilities at the country’s ports, threatening offenders with fines and the loss of their licenses.
SUGAR
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) is forecasting India’s 2023/24 sugar production at 34 million tonnes, which is up from a previous forecast of 33.05 million. However, this is likely not enough to turn India into an exporter this year. We suspect the market is more focused on the prospects for the upcoming Brazilian cane crop after the dry conditions of the past several months. Recent rainfall has offered some chance of improvement. The Unica supply report yesterday had little impact on the market, as it showed crushing operations in Brazil’s center-south region all but ended for the season, with only 16,000 tonnes of sugar produced in the second half of February.
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