Cotton Conditions Fall Back

COCOA

Ivory Coast farmers continue to sound optimistic about the upcoming main crop. Those interviewed by Reuters said sunny spells mixed with light rain last weekend were good for crop development. Abundant rains are typical this time of year, but they have been scarce in recent weeks. Last year, too much rain and not enough sun brought on black pod disease and swollen shoot disease. This year, farmers are saying they expected harvest volume to be abundant in September and to rise gradually from October to December. BMI analysts are less confident about 2024/25 production for Ivory Coast and Ghana, as they worry that recurrence of La Niña could bring too much rain. Ivory Coast port arrivals were estimated at 11,000 metric tons last week, up from 10,000 for the same period last year. Total arrivals since the marketing year began on October 1 have reached 1.655 million tons, down from 2.269 million a year ago (-27%). Managed money traders were net long 25,690 contracts of cocoa last week, which was relatively small compared to the peak of 79,541 from last September.

COFFEE

A survey of famers in Brazil by the US-based Coffee Trading Academy said the trees were normal or better than normal despite the low rainfall this season, which suggested that the 2025 coffee crop could be strong, provided the rains return. Farmers are looking at this year’s crop to be the same size as last year, which is not as good as the previous survey. As of late last week, the harvest was 81% complete,  7% ahead of a year ago. Robusta trees seem to have suffered the most from the hot and dry weather this year, and there are concerns about bean quality and size. Managed money traders were net long 58,660 contracts as of last Tuesday. This is relatively close to the all-time high of 71,811 from April, which means the market could have significant stop loss selling capacity. ICE arabica stocks totaled 814,656 bags yesterday, down 145 from Friday. There were 47,523 pending review, up 14,168 from Friday. Vietnam exported 70,000 metric tons in July, down 35.7% from a year ago.

COTTON

US cotton crop conditions fell back last week after their sharp increase the week before. The Crop Progress report released yesterday afternoon showed 49% of the crop in good/excellent condition as of Sunday, down from 53% the previous week but up from 45% the week before that and 41% a year ago. The five-year average is 48%. Texas was 40% G/E, down from 46% last week but up from 34% the week before that and 17% a year ago. The five-year average is 33%. Georgia was 63% G/E, up from 59% last week but down from 71% a year ago. Mississippi was 55% G/E, versus 50% last week and 67% a year ago. North Carolina was 64% G/E, up from 49% last week and up from 32% on July 2, its low point of the year. They have moved above year ago levels for the first time this year. The report also showed 87% of the US crop was squaring versus 84% a year ago and 84% on average, with 54% setting bolls versus 44% a year ago and 46% on average. Last week’s Drought Monitor showed approximately 10% of US cotton production was in an area experiencing drought versus 16% the previous week. The 1-5 day forecast shows generous rainfall in the southeast and light to no rain in the Delta and Texas. The 6-10- and 8-14-day forecasts have above normal temperatures across the cotton belt, with normal to above normal chances of rain, which sounds like good growing weather. The managed money net short as of last Tuesday was 44,583, which is close to the record 47,428 from August 2019. Crop conditions fell last week but were above average for this time of year, and heat mixed with rain could be good for crop development.

SUGAR

The sugar market received some additional bullish production news overnight with the Indian Sugar Mills and Bio-energy Manufacturers Association saying that their nation’s sugar output could fall 2% to 33.3 million metric tons in 2024/25 due to lower planted area in the wake of last year‘s drought. This is in contrast to recent trade expectations for better production because of the strong monsoon this summer. However, the group expects local consumption to total 29 million tons, which would allow the government to lift its cap on ethanol production and exports. This follows a report last week from UNICA that indicated Brazil’s sugar output has finally started to reflect the dry conditions this year. That report sparked a rally off last week’s 16-month low. The report showed Center-South production for the first half of July at 2.939 million tons, down from 3.255 million for the same period last year, for a decline of 9.7%. Overall production since the marketing year began in April is running 10.4% above a year ago. The sugar mix fell to 49.88% from 50.03% a year ago.

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