ADMIS News
COTTON
December Cotton is higher this morning in a mild reversal after yesterday’s decline to its lowest level since September 18. The Chinese central bank has finally come up with more detail on its plan to inject money into their capital markets, and this has supported Chinese equity markets overnight and may have offered some positive demand news for the cotton market for a change. The sharp rally in the dollar over the past month has damaged US export prospects. NOAA said yesterday that a developing La Niña is expected to bring warmer and drier-than-normal weather to the central and southern US Plains this winter, which could expand dry conditions in Texas as well. This La Niña event looks mild, which adds uncertainty to the forecast.
COFFEE
December coffee was slightly weaker overnight. The market may be seeing some pressure from the London robusta market, which was down sharply yesterday, with some traders citing arbitrage business with the NY contract after the spread had gotten unusually narrow. The western half of Minas Gerais, Brazil saw light rain of (1-5 mm) over the past 18 hours, with a portion receiving 5-15 mm. World Weather Service says precipitation through the weekend will be sufficient to support flowering, pollination and cherry setting and that showers during the balance of next week will be lighter and more variable but that the environment will still be very good for ongoing crop development. Nestle cut its full year sales outlook following weaker than expected nine month underlying sales growth as consumers react to prices its packaged products, including coffee and cocoa. The has apparently led dealers to becoming concerned about demand growth for coffee.
SUGAR
March Sugar was higher overnight, possibly supported by the latest China stimulus news, but also from ongoing concern with the crop outlook in Brazil. Center-south Brazil saw some light rain over the past 18 hours, with the key producing state of Sao Paolo getting anywhere from 0 to 5 mm, with northern parts of the region seeing the most. Recent rains in center-south have been beneficial, but the damage from excessive heat, dryness, and wildfires this year have been extensive.
COCOA
December Cocoa is trading inside yesterday’s range this morning. Yesterday’s European third quarter cocoa grind was below year ago levels, but increases in Asia and North America more the made up the difference. Late yesterday, the North American third-quarter grind came in at 109,264 metric tons, up 11.6% from 104,871 for the same period last year. Ivory Coast and Ghana have continued to seen rain over the past 24 hours, with widespread coverage of moderate to light amount across both nations. Frequent showers and thunderstorms are expected through next week but with decreasing frequency and intensity. Dry weather is needed to stem concerns about disease.
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