ADMIS News
COTTON
May Cotton was lower early Tuesday following a modest rally off contract lows last week. Short covering and an extremely oversold technical condition may have supported last week’s rally. There also may be a reluctance to push the market too much lower ahead of the growing season ahead of us. The USDA Outlook Forum this Thursday and Friday will offer some initial ideas on plantings this summer. On the other hand, a sluggish stock market keeps cotton demand expectations subdued, and the slow export sales pace does not offer much support.
SUGAR
May Sugar gapped higher overnight following a move to new contract lows on Wednesday. There were some comments last week that India’s crop may not be as large as had been previously expected, but we’re not sure where this is coming from. On Friday, India allowed the export of an additional 500,000 metric tons of sugar for the 2025/26 season, raising the total allocation to 2.0 million, which may have initially been viewed as verification that their crop was even larger than previously estimated. However, this move may have had less to do with the state of the crop and more to do with an attempt by the government to appease growers unhappy about the new US-India trade framework. So far this season, India’s sugar exports have not been very impressive. The government reported that around 197,000 tons had been shipped of January 31 and that an additional 272,000 have been contracted. Mills are struggling to ship their already allocated export quotas due to weak global prices, according to the director general of the Indian Sugar & Bio-Energy Manufacturers Association (ISMA). UNICA will release its update on Brazil Center-South sugar production for the second half of January on Wednesday.
COFFEE
After a modest rally last week, May Coffee gapped lower early Tuesday and fell to its lowest level since August 11. The market has moved back into month-long consolidation from last July, which it hesitated to penetrate last week. Like cocoa and coffee appears to be under liquidation pressure as supply pressures build following an unprecedented bull market the previous two years. Good weather in Brazil points to a strong crop this year, though there is some disagreement on how strong. More coffee appears to be heading to exchange warehouse stocks.
COCOA
May Cocoa extended its losses early Tuesday to a new contract lows The nearby contract fell to its lowest level since early October, 2023. The selloff continues as buyers are reluctant to pay official prices for beans in Ivory Coast and Ghana. Ghana cuts its farmgate price for cocoa by a third last week; it had been nearly $5,300 per metric ton, and the new price will be around $3,580. Reports out of Ghana last week said there was about 50,000 metric tons of unsold cocoa sitting at its ports. The drop in the Ghana price is expected to put pressure on Ivory Coast to lower its farmgate price as well.
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