COCOA
March Cocoa is near unchanged this morning but in the upper part of yesterday’s range. In three sessions the market has managed to take back roughly half of its losses from the previous eight sessions, but it continues to consolidate inside a five-month range. The market is waiting to see if the west African main crop, which is being harvested now, will be enough to reverse the tightening supply situation of the past three years. There have been reports that heavy rains in parts of Ivory Coast have slowed harvest and raised concerns about disease, but they have not been widespread. World Weather Service says west-central Africa is experiencing favorable late season weather with alternating periods of rain and sunshine and that drier weather will be needed in November and December to support maturation and harvesting. An executive at Mondelez said they see optimism beginning to return to China with the stimulus policy taking effect. They added that the fourth quarter will see meaningful pressure to profit as cocoa prices catch up to market levels and that peak cocoa prices should be reflected in the first half of 2025.
COTTON
December Cotton is near unchanged this morning after seeing a drift lower this week to its lowest level in a month. World Weather Service says an active weather pattern is expected in the central U.S. this week through next Tuesday, with rainfall likely to occur from central and West Texas through the central and northern Corn Belt. This could slow harvest progress in Texas and Oklahoma. As of Sunday, Texas was 48% harvested versus an average of 46%. It also had 95% bolls open, which would be vulnerable to damage if the rains are heavy. Rain is still needed Australia’s dryland crop areas of New South Wales and Queensland where the soil is still too dry for planting, and western unirrigated cotton areas still need significant moisture.
SUGAR
March Sugar is lower this morning after trading to its highest level in a week overnight. Recent rain in Brazil has improved the outlook for the 2025 cane crop, but it may also slow what is remaining of the harvest for this year, which could tighten sugar supplies at the end of 2024 and the early part of 2025. Sugar market analysts were warning that an early end to 2024 production and a late start for 2025 could lead to tight global supplies. The extended drought this year was given as the main reason for those expectations, but now the recent wetter trend is getting some of the blame. Czarnikow raised its forecast for an expected global surplus in 2024/25 to 4.7 million metric tons, up from a previous forecast of 4.5 million, based on an improved outlook for Colombia. Global production estimated at 184.7 million, up 0.4 million from its previous forecast and up from 181.5 million in 2023/24.
COFFEE
December Coffee was slightly lower overnight, as it is chopping around this week after a recent selloff on improved growing conditions in Brazil. Recent rainfall has supported a strong flowering period, but there is some question about whether the trees have enough energy to build a strong crop after the drought this year. World Weather Service said a favorable mix of rain and sunshine is expected through the next ten days. Temperatures will be close to normal and most of the rain may be sporadic for a while but most crop areas should eventually benefit. Vietnam’s harvest normally begins in earnest next month. Overall, the coffee there is expected to remain in mostly good condition with very little reason for concern over production in the key growing areas. There is a potential for a new tropical disturbance to form in the southern South China Sea this weekend that may move toward the central coast of Vietnam, which could bring mostly light to moderate but some locally heavy rain in the Central Highlands early next week.
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