ADMIS News
COTTON
May cotton closed sharply higher on Thursday, near the upper end of a 10-day range. Outside market influences were mixed. This was despite a slightly higher dollar. Crude oil was slightly higher, and the S&P 500 was slightly lower. Traders attributed the move to short covering ahead of the holiday weekend. US cotton export sales for the week ending March 30 came in at 160,457 bales for the 2022/23 (current) marketing year and 15,942 for 2023/24 for a total of 176,399. This was down from 293,601 the previous week and below the four-week average of 259,957. Sales have reached 103% of the USDA forecast for the marketing year versus a five-year average of 101%.
COCOA
With the market short-term overbought, cocoa is vulnerable to a near-term pullback. For the holiday-shortened week, May cocoa finished with a loss of 14 points (down 0.5%) which broke a 3-week winning streak. Tight near-term supplies in West Africa continue to underpin cocoa prices, but that may only last until the region’s mid-crop harvest reaches full speed. Although there have been early forecasts that Ivory Coast’s mid-crop may be 10% below last year’s output, the surge in near-term supply should help exporters who have had difficulty acquiring cocoa bean supplies. With a lack of adequate fertilizer and pesticide use in West Africa, Cocoa remains on-track for a global production deficit during the 2022/23 season.
COFFEE
Coffee prices have made a positive start to the second quarter as they have found some relief from near-term demand concerns. The upcoming Brazilian crop is showing signs of coming in higher than early forecasts, and that leaves coffee vulnerable to a near-term pullback. For the week, May coffee finished with a gain of 13.10 cents (up 7.7%) for a second positive weekly result over the past 3 weeks. A positive turnaround in global risk sentiment and the longer-term pullback in inflation provided coffee prices with support, as that should help to improve restaurant and retail shop coffee consumption.
SUGAR
Sugar prices have only had one negative daily result in the past nine sessions as they have gained 13.5% in value over that timeframe. With Brazil’s 2023/24 harvesting and crushing underway, sugar may have risen “too far, too fast” and could see a near-term pullback. The market reached its highest front-month price level since October 2016 by finishing Thursday’s trading session with a sizable gain. For the week, May sugar finished with a gain of 136 ticks (up 6.1%) which was a third positive weekly result in a row. India’s Food Secretary said that their nation may not allow further sugar exports this season, which provided underlying support to the market as that will keep 2 to 3 million tonnes from reaching the global export marketplace.
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