ADMIS News
COCOA
July Cocoa was slightly lower overnight after a modest rally yesterday, as the market appears to be in consolidation mode as it awaits the outcome of the West African midcrop. Recent good weather – a mix of rain and sunshine – is good for production later this summer, but current supplies may still be limited by the drier than normal conditions earlier this year. Ivory Coast port arrivals have been lagging behind last year’s pace for the past four weeks. Last week, the ICCO revised down last year’s production but offered no update on this year. World Weather Service says West Africa will see periodic showers and thunderstorms through the next week.
SUGAR
July Sugar was back under pressure overnight and approaching the January low. This followed a brief short-covering rally yesterday off what appeared to be some exhaustion on the India monsoon early-arrival theme. Reports this week that the monsoon would see a temporary “pause” may have also helped support the market. The monsoon is expected to resume its advance next week. Thailand is also expected to benefit from ample monsoon rains this year. Brazil’s harvest got off to a slow start, thanks to some rains late April and early May, but recent drier conditions may have allowed production to catch up.
COFFEE
July NY Coffee was sharply higher overnight, which is not too shocking after the market had fallen 82.35 or 20% from the contract high in late April. The ICO reported yesterday that global exports of green coffee fell 6.8% in April from a year earlier to 10.2 million bags, their fourth monthly decline in the 2024/25 (October to September) coffee year. The agency said the decrease was mainly driven by top producer Brazil and that global year to date exports are now down 4.3% from last year. This was the first bullish news the market had received in a while, but it was backward-looking as well. London (robusta) prices were higher overnight, but the move was not as dramatic. The advancing robusta harvest has been pressuring both markets recently (especially robusta), with reports of weaker cash prices due to increasing supply of beans from Brazil and Indonesia.
COTTON
July Cotton is back near the low end of a two-week range as the market balances expectations of good rain in West Texas against overly wet soils in the Delta. Texas is by far the largest cotton producer in the US, especially when it sees ample rain. It has the largest planted area in the US, but much of it is unirrigated, and a dry growing season has a big effect on yield and abandonment. World Weather Service say shower and thunderstorm activity over the 7-10 days in West Texas will greatly improve crop and field conditions for planting and establishment. Field conditions in the Delta are too wet and more rain is expected in the north over the next ten days, which could keep planting behind schedule. The trade may not be expecting much from the export sales report, given the trend of the past several weeks
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