ADMIS News
COFFEE
March coffee was slightly lower overnight, but it stayed inside Monday’s wide range. A report from Brazilian coffee exporter Comexim was a mixed bag, as it raised the estimate of 2023/24 Brazilian production but lowered the forecast for 2024/25. Total coffee production was projected at 67.15 million bags, which was down from the previous forecast of 68-69 million. The reduction was attributed to less-than-ideal rain and extreme heat during the flowering period late last year. 2024/25 Arabica production was forecast at 45.15 million bags, which would be 3.7% higher than 2023/24. Vietnamese coffee prices were slightly higher this week, as trade remained sluggish ahead of the Lunar New Year holiday that begins next Thursday. The stock market sold off yesterday in the wake of Fed Chair Powell’s post-FOMC comments that dashed hopes for a rate cut in March, and this undermined support for commodities.
COCOA
March cocoa traded to another new contract (and 47-year) high overnight, as the market started another new leg higher in its extended rally. The nearby contract finished January with its largest monthly gain in 47 years as well. Production issues in West Africa have continued to underpin prices. Farmgate prices in Cameroon have reached record levels. The weather in West Africa has taken a bullish turn this week, with the Harmattan winds increasing and daily highs forecast at 100 degrees Fahrenheit or higher in several areas through late next week. This is raising concerns about mid-crop production, which begins in April. Mondelez reported a year-over-year increase in quarterly sales revenue, but they noted that high prices reduced sales volume.
COTTON
March cotton was lower overnight, possibly in a delayed response to the selloff in the stock market yesterday afternoon, which came in the wake of Fed Chair Powell’s comments, which dashed expectations of a rate cut in March. The cotton market finished January with its best performance since May. Traders are hoping to see an improvement in this morning’s export sales report. Last week’s report showed US cotton sales for the week ending January 18 at 207,044 bales, down from 438,647 the previous week. Sales to China have been strong ahead of the Lunar New Year holidays, which are expected to begin late next week, and traders are wary of a possible slowdown. The dollar was higher overnight in the wake of Powell’s comments, which could undermine US export prospects. If the stock market recovers today, it could allow cotton traders to look beyond export sales.
SUGAR
The sugar market received a couple of bullish news items yesterday, with further verification that India’s 2023/24 production is down from the previous year. India’s National Federation of Cooperative Sugar Factories said their nation’s sugar production totaled 18.7 million tonnes during for the first four months of the 2023/24 season (October- January), down from 19.3 million for the same period in 2022/23. Their domestic consumption is expected to total 28.5 million tonnes, which would allow carryover stocks to increase to 8.45 million tonnes from 5.6 million in 2022/23. Traders are starting to lower their forecasts for Brazil’s 2024/25 can crop due to the drier than normal conditions over the past couple of months.
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