ADMIS News
COCOA
December Cocoa is higher this morning and is close to testing Friday’s 3 ½ week high. Ivory Coast arrivals continue at a strong pace, but there are nagging concerns that their production will drop off in December due to heavy rains. Arrivals are running about 65% higher than they were at this point last season. Last week, two sources inside Ivory Coast’s Coffee and Council said total arrivals were only expected to reach 1 million tons by the end of January, which would be similar to last year and down from an average of 1.326 million for that point in the season. Late on Friday, Ghana’s president announced the country had raised its fixed farmgate price for cocoa farmers for the second time this season to 49,600 Ghanian cedi ($3,062) from the 48,000 ($2,963) that had been announced in September. Ghanian farmers had reportedly been hoarding supplies in anticipation of the increase, so in theory this should start bringing in more cocoa. World Weather Service said showers and thunderstorms continued to impact cocoa areas from southern Ivory Coast to southern Nigeria and western and southern Cameroon Friday through Sunday. Most of the precipitation was light, but satellite imagery suggested a few moderate amounts may have occurred near the coast. Very little change is expected this week or early next week. The environment will be good for crop maturation and harvesting.
SUGAR
March Sugar broke below moving average support overnight to trade to its lowest level since September 19. World Weather Service says center south Brazil rainfall will be frequent and sufficient to maintain moisture abundance in most sugarcane production areas through the next ten days and probably two weeks. This will benefit 2025 production but slow harvest pace for 2024. The UNICA report on Brazil Center-South sugar production for the second half of September is due out this week. A survey by S&P Global put expectations at 1.69 million tons, which would be down 28.3% from the same period last year. This would bring the year-to-date total at 0.01% above last year. The Brazilian real’s lower trade on Friday could encourage producer selling, and the rally overnight in the dollar adds to that pressure.
COFFEE
March Coffee is higher this morning but inside the range of the previous two sessions. Traders are reportedly keeping an eye on Vietnam’s harvest, as Typhoon Yinxing, which hit northern Philippines over the weekend, approaches. However, World Weather Service expects the storm to dissipate before reaching southern Vietnam’s coast tonight. The remnants of the storm may bring enhanced rainfall to a part of the Central Highlands later this week. They also said Brazil and Indonesia production areas have been receiving frequent rain recently and that the trend will continue through the coming week to ten days. This should be bearish for the market, as Indonesia’s rainfall had been light and Brazil is still trying to recover from this year’s drought. ICE arabica certified stocks fell 3,785 bags last week to 852,268, but the amount pending certification increased by 21,485 bags to 117,767.
COTTON
December Cotton is lower this morning but inside Friday’s range. The market backed off from the 50-day moving average for the second time in six sessions on Friday, and that line, 71.36 could be a key resistance level this morning. The dollar extended Friday’s rally overnight and pushed through last Wednesday’s high to its highest level since July, which raises concerns about US export prospects. Friday’s USDA supply/demand report put US 2024/25 cotton production at 14.19 million bales, hardly changed from 14.20 million in the October report and above average expectations calling for 14.08 million. Exports were lowered to 11.30 million from 11.50 million in October and 11.46 million expected.
World Weather Service reports that recent rain in West Texas and the Blacklands raised concerns over fiber quality and induced some harvest delays. Drier weather is expected in both of these areas this week, which should improve fiber quality or at least end the declining conditions. Harvesting in the Delta is winding down, but it too may have been hindered by recent rain. In Australia, rainfall is expected to slowly increase in Queensland and New South Wales, eventually bringing much needed moisture to dryland production areas, including unirrigated cotton, which will help planting and crop establishment.
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