ADMIS News
COFFEE
May Coffee broke below a two-month consolidation on Friday and extended those losses overnight, as the steep decline in the stock market and high US tariffs threaten to lower demand. The US is the world’s largest consumer of coffee, and domestic prices could see double digit increases with the imposition of the new tariffs. Vietnam is facing 46% tariffs, and they are the third largest supplier of coffee to the US. Vietnam exported 493,000 metric tons of coffee in during the January-March timeframe, down 15.8% from the same period last year, according to government data. March exports totaled 183,000 tons, down 2.7% from last year. The Brazilian real fell sharply on Friday to its lowest level since March 12. This is negative to coffee prices because the weaker currency allows Brazilian producers to sell at lower dollar values while still capturing better returns in the local currency. Brazil’s green coffee exports totaled 219,000 tons in March, up from 208,000 a year ago. World Weather Service said better rain coverage and intensity over the weekend in portions of Brazil has allowed a short term improvement in crop and soil conditions, but they believe this was only a temporary change, and they expect sporadic activity to return this week and last into next week. ICE certified stocks decreased 11,099 bags on Friday to 771,014. Stocks fell 562 bags last week.
COTTON
Cotton is higher this morning following a collapse on Friday to its lowest level in almost five years. The market sold off hard last week in the wake of the announcement of new US tariffs, including a 47% one against Vietnam, which has been the one of the biggest buyers of US cotton for the past couple of years. China announcing its own tariffs against US goods on Friday widened those concerns, but their purchases of US cotton have slowed considerably in recent years as they have switched to Brazilian cotton. The bounce overnight may have been the cotton market’s attempt to buy acres from corn, which has managed to hold its own against the tariff news. The USDA Foreign Agriculture Service said on Friday that it expects Brazil cotton to plant 2.13 million hectares in the coming year, up 32.9% from the current year. They put production 17.8 million bales, up from 17.2 million and exports at 13.9 million, up from 13.4 million in the current year. This is a slower growth pattern than last year.
COCOA
May Cocoa is slightly higher this morning after falling to its lowest level since April 1 overnight. The selloff in the stock market finally got to cocoa on Friday, but a low Ivory Coast arrivals number this morning reminded the market of the expected slowdown in production this season. Ivory Coast cocoa arrivals for the week ending April 6 were estimated at 1,500 metric tons, down from 7,000 the previous week and 3,000 for the same week a year ago. Cumulative arrivals for the 2024/25 marketing year have reached 1.442 million tons, still ahead of 1.304 million a year ago but behind the five year average of 1.642 million. The surplus relative to last year is narrowing, and the deficit to the five-year average is widening. Warmer than normal temperatures and an erratic rainfall pattern in West Africa are adding to concerns about Ivory Coast’s mid-crop. World Weather Service expects this pattern to continue for at least 10 days. Most areas will only get light rain. Southern Ivory Coast, southern Nigeria and western Cameroon will be the wettest. ICE certified stocks decreased on Friday by 13,633 bags to 1.850 million. Stocks increased 43,178 last week.
SUGAR
May Sugar fell to its lowest level since March 11 overnight as continued declines in equities and crude oil and fears of a global recession painted an uncertain demand outlook. Lower energy prices reduce the incentive for cane crushers to divert their production from sugar to ethanol production. The drop in the Brazilian real on Friday further increases the incentive to sell sugar, which is exported, versus ethanol, which is consumed domestically. Brazilian government data showed they exported 1.853 million tons of sugar in March, down from 2.676 million a year ago. Dry conditions in Brazil and recent mixed messages from India regarding the condition of their crop helped support rallies to the 20-cent level twice this year, but the market has backed off from that level both times.
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