ADMIS News
COCOA
December Cocoa is near unchanged this morning following yesterday‘s selloff to the lowest level in two weeks. Ivory Coast’s Coffee and Cocoa Council said they expect the main crop to increase by about 10% in 2024/25, but they are tentative about this because of heavy rains that have affected the development of flowers and small pods. Three quarters of the main producing regions have been hit by heavy downpours and flooding for the past three weeks. A 10% increase would put total production at 1.9 million metric tons. Exporters estimated the 2023/24 main crop at around 1.3 million metric tons versus an average of 1.7 million in recent years. An expert from the ICCO said Ivory Coast’s total production should reach 2 million tons in 2024/25, up from 1.74 million in 2023/24 but short of the 2.105-2.248 million over the previous five years. Commerzbank commented that demand had yet to react strongly to historically high prices, having decreased only 0.6% year on year in North America, Europa and Asia during 2023/24. The grind data from last week supports this.
COFFEE
December Coffee is slightly lower this morning and is close to taking out Monday’s low. The main issue for the market appears to be the arrival of much-needed rains to Brazil and the expectation that this trend will continue. The market also has been pressured by a selloff in robusta coffee this week, with prices falling to their lowest level since August 23. Dealers suggested demand for coffee from Vietnam may be slow to start the season because many buyers had already secured product from other origins on the idea that expectations that the EU’s deforestation regulation was to take effect at the end of the year had encouraged them to secure their needs early. Now that the deadline has been postponed, the urgency has lessened.
COTTON
December Cotton is lower this morning after trading to its highest level since October 10 overnight. The dollar extended its rally to reach its highest level since July 29, and this may be troubling to the market bulls as it makes US cotton less competitive on the global market. The dollar has seen a sharp turnaround since putting in a 9-month low last month. US export sales improved substantially last week, but the market likely needs that trend to continue in order move higher. This could put a lot of focus on tomorrow’s exports report. Cumulative sales for 2024/25 are the lowest for this point in the season in seven years. The Cotton Association of India expects the nation’s cotton production to fall 7.4% in 2024/25 due to lower planted area and recent rains that damaged the crop. The last USDA update projected a 7% decline.
SUGAR
March Sugar is slightly higher this morning, following a three day selloff. The new rainfall pattern for Brazil improves the outlook for next year’s crop, but it may be too late to improve the 2024/25 production. If anything, the arrival of the rains could slow the can harvest and sugar production in the short term. There are also concerns that the extreme heat and drought this year will bring an early end to the harvest in November and delay the start of the new harvest in 2025, which would normally begin in late March/early April. The brush fires last month damaged more to damage newly planted cane than hurt old crop production.
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