ADMIS News
COTTON
December cotton closed moderately higher yesterday but the market fell to the lowest level since August 10th overnight. US cotton export sales for the week ending September 8 came in at 100,261 bales for the 2022/23 (current) marketing year and 25,539 for 2023/24 for a total of 125,800. This was the first time the USDA was able to put out an export sales report since the August 11 update, so it has been four weeks since we have had new data. The total for the last four weeks was 808,564, which was short of the 1 million that some had anticipated. Sales have reached 65% of the USDA’s forecast for the marketing year versus a five-year average of 53%.
COCOA
Even if global risk sentiment remains subdued, cocoa has received fresh bullish supply news that may help the market maintain a consolidation pattern. Ivory Coast’s government said that all of their cocoa will be traceable to an individual farm by the 2023/24 season, and that news provided the market with significant strength. While they have been working on removing cocoa trees from protected forest areas for several years, recent estimates still had 20% to 30% of Ivory Coast’s cocoa production grown illegally. It is highly unlikely that illegal output will be fully replaced by legal output, so this implies that Ivory Coast’s 2022/23 and 2023/24 cocoa production will come in well below this season and far below the record high total in 2020/21.
COFFEE
Coffee looks to be heading for a third negative weekly result in a row, but the market appears to have found its footing after falling more than 28 cents in value (down 11.6%) from its late August high. The Brazilian analytics firm Safras and Mercado lowered their forecast for Brazil 2022/23 Arabica production forecast by 3.6 million bags down to 35.2 million, which provided the coffee market with significant support. The current La Nina weather event is widely expected to last until early 2023, and that could extend the drier than normal conditions that Brazil’s Arabica-growing regions have seen since mid-2020. As a result, this should offset the pressure on coffee prices coming from a wet forecast over those same areas through early October.
SUGAR
Sugar prices have been unable to shake off a coiling pattern for nearly a month now, and are facing carryover pressures from key outside markets coming into today’s action. Unless the market can receive fresh bullish supply news, sugar could finish the week on the defensive. News that a US rail strike was averted fueled a huge selloff in crude oil and gasoline prices which became a major source of pressure on the sugar market. While Brazilian ethanol demand is on the mend and India’s mills are ramping up their ethanol production operations, Brazil’s Center-South mills have incrementally raised sugar’s share of crushing over the past few months. There are mostly dry conditions in the forecast for Center-South cane-growing regions through early next week, which pressured the sugar market as that should increase the pace of harvesting and crushing.
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