ADMIS News
COFFEE
December Coffee extended its selloff from last week’s contract highs overnight and fell to its lowest level since October 17. The bears may have been encouraged after Brazil’s President said he had a positive meeting with President Trump on Sunday (on the sidelines of the ASEAN conference in Malaysia) and that their respective teams will start “immediately” to discuss the 50% tariffs on Brazilian imports (including coffee) and other matters. Brazil’s Foreign Minister mentioned that they had requested that tariffs be suspended during the negotiation process, but there has been no indication that the United States has agreed to the request. Trump said today that coffee is among the products included in a new trade deal with Vietnam, which would exempt it from a 20% tariff. Vietnam is the largest producer of robusta coffee, which is used in the US primarily for instant coffee. The milder arabica coffee that favored for fresh brewed consumption, of which the US gets about one-third of its needs from Brazil and about one-fifth from Colombia. World Weather Inc says welcome rains should slowly move into coffee growing areas this weekend, with additional showers next week, but more will be needed. Coffee in Jamaica and eastern Cuba is expected to be damaged by Hurricane Melissa early this week. The tropical storm that hit Vietnam last week did not appear to do much damage to the robusta crops there.
COTTON
December Cotton gapped higher overnight in a sharp rally that took it to its highest level since October 6. The market was buoyed by optimism that trade deals with Vietnam and China would open the door for US cotton exports. The Trump Administration said yesterday that the US and Vietnam would finalize a trade agreement in the coming weeks that will maintain 20% tariffs on most Vietnamese goods but lift duties on certain products. The list of such products are to be decided at a later stage. Vietnam has been the largest buyer of US cotton in recent years, and they have started out relatively strong this year. The next largest buyer was Pakistan at 472,421. Traders may have also turned more optimistic about a potential agreement with China after reports that US and Chinese officials had sketched out a framework ahead of a planned meeting between President Trump and Chinese President Xi Jinping later this week. The possibility of a trade deal could also be viewed as economically beneficial for all, which could boost textile demand.
COCOA
December Cocoa gapped lower overnight and fell back to the 9-day moving average, giving up a good portion of its gains from last week. The market also fell to the 50% retracement of the rally off the October low. Ivory Coast port arrivals continue to lag behind last year and average levels, despite the good weather reported this year the increase in farmgate prices. An extended dry period during late summer in West Africa may have slowed pod development, but growers have expressed optimism about production since it started raining again in September, so perhaps the arrival pace will pick up in in the next few weeks. World Weather Inc. says seasonal rain continues to slowly retreat to the south, reducing rain in northern cocoa production areas. Rainfall will be mostly light to moderate with a slight chance for heavier rainfall periodically in southeastern Nigeria and Cameroon. Nothing being reported appears to be damaging to the crop.
SUGAR
March Sugar traded to new contract lows overnight, and the nearby contract fell below its four-year-plus low from June. The market continues to be dragged lower by strong production. Last week, Datagro forecast a global sugar surplus of 1.98 million tons for the 2025/26 marketing year (October/September) up from a deficit of 5 million in 2024/25. India and Thailand have experienced ample rains this year, and Brazil’s output improved as they moved through the season. Long-term demand expectations are weighed down by the success of new GLP-1 weight-loss drugs.
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