ADMIS News
SUGAR
October Sugar is higher for the second strait session after falling to its lowest level since March 2023 last week. At last week’s low the market had dropped 2.26 cents (12%) from its May 13 high and 3.56 (18%) from its March 18 high, and it may have been too much to ask for the market to keep pushing lower on expectations for strong crops in 2025/26. Much has been made of the early start for Indian’s monsoon, which is expected to significantly boost their sugar cane production. The monsoon resumed last week after a minor delay, and it is expected to become active in the central and eastern parts of the nation over the next two weeks. However, southern India is expected to see below normal rainfall, which could affect cane crops and could temper expectations for the crop as a whole. The rally in energy markets off the Iran/Israel conflict and the US bombing of Iranian nuclear sites over the weekend is another supportive element, as higher gasoline prices make it more attractive to crush cane for ethanol production. Last week’s UNICA report showed Brazil’s Center South sugar production for the second half of May was +8.9% from a year ago, beating expectations.
COTTON
December Cotton has traded in relatively wide ranges over the past three sessions, possibly due to the volatility in the energy markets. Cotton saw a significant bounce on Friday off a strong export sales reports but closed back near the lows of the day, much as it did on Wednesday. The export sales report on Friday showed net sales of 83,198 bales for the 2024/25 (current) marketing year and another 274,891 for 2025/26 for a total of 358,089 for the week ending June 12. This was up from 96,282 the previous week and the highest since March 6. Most of West Texas saw little rain over the past 48 hours and it is expected to be dry over the next week, which should allow plantings to finish. The Delta is behind in plantings and has mostly below average crop conditions due to heavy rains this spring. Mississippi was 71% planted last week versus 96% on average, and the rains since have likely limited their ability to catch up. Time is running out, and the USDA has already lowered its expectations for the region.
COFFEE
September Coffee opened below Friday’s low overnight and subsequently moved to higher on the day. So far, the open has been the low of the day. There is a threat of frost for some of Brazil’s main arabica growing region early this week, which may provide reason for a bounce. World Weather Service expects a few patches of “soft frost” but does not expect it to be enough to do any permanent damage. The Brazilian real closed lower on Friday after trading to its highest level since June 2024 earlier in the week, and it may be weaker today given that the dollar gapped higher overnight. The strong real may have made has Brazilian growers reluctant to sell their newly-harvested crop.
COCOA
West Africa continues to see regular, active rainfall, which at this point is viewed as beneficial for cocoa production, especially for the main crop harvest that begins in October. It is important that the region sees sun mixed with the rain to avoid crop and tree disease, but so far there have been very few reports of problems, and the market action indicates that the traders believe conditions are improving. There were some anecdotal reports last week of concerns about harvested mid-crop beans getting moldy because of the wet conditions, but the trade may be focused more on the upcoming main crop. World Weather Service said rain fell across much of the region from Ivory to Nigeria and Cameroon Friday through Sunday. Routine rainfall is expected over the next week to ten days. All crop areas will be impacted multiple times and daily amounts will be light to moderate with a few infrequent strong thunderstorms producing some heavy rain.
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