ADMIS News
COTTON
May Cotton is backing off from a five-week high on Wednesday off a rally that was built on short covering and perhaps on the idea that pushing the market to new contract lows at the beginning of the planting season was a bit risky. Thursday’s export sales report showing net sales of 282,885 bales was disappointing compared to the previous week’s 499,391, but it was still respectable, and it market the seventh straight week they were above 200,000. Overall sales this year are low, but at least we’ve seen some improvement recently. Planting conditions are less than ideal at the start of the marketing year. World Weather Inc. says South Texas and northeastern Mexico need rain to support planting in early March and that a dry bias will prevail for at least another ten days. West Texas also needs rain, and not much will fall for a while.
COCOA
May Cocoa was lower early Friday and had already taken out Tuesday’s contract low. Reports that Ivory Coast plans to lower its fixed mid-crop price to better reflect current market conditions may finally allow the harvested cocoa to be sold. The nations plans to bring forward the start of mid-crop season, which would allow the nation’s regulator, the CCC, lower the price sooner; what would normally be considered “main-crop” will be magically transformed to “mid-crop” and be subject to the lower price. The trade is not convinced that this will turn the market around, but it will at least allow the cocoa to get sold.
SUGAR
May Sugar was lower early Friday, following a disappointing close on Thursday that saw the market back off a three-week high. The large global surplus for 2025/26 has been the dominant force for the market since last summer after a strong monsoon helped support good crops in Thailand and especially India. However, India’s crop estimates have been revised lower after some untimely rains reportedly lowered cane yield. This week the Indian Sugar & Bio-Energy Manufacturers Association lowered its production forecast to 29.3 million metric tons from an earlier estimate of 30.95 million. This followed unofficial reports last week pointing to similar declines. This and forecasts for a smaller surplus in 2026/27 helped the market establish a low earlier this month. It remains to be seen whether the market can hold the low. Low prices are expected to cut production and encourage crushes to favor more ethanol favoring ethanol over sugar, but there are limits. Early forecasts call for Brazil’s output to drop slightly because of this. Brazil is also using more corn in its ethanol mix.
COFFEE
May Coffee was lower early Friday and was back in the vicinity of Monday’s six-month low. Ever since the market broke below the August-January consolidation range, the market has been under pressure, but it has found temporary support at a minor consolidation from last July. Brazil is on track for a strong arabica crop this year, with this being the “on-year” in their biennial production cycle and the region experiencing ample rains. The crop will not be harvested for a couple more months, but as we have moved through season, traders have become more confident that it will be strong. World Weather Inc. said expects rains over Brazilian coffee areas diminish over the next few days after ample amounts earlier this week.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
