ADMIS News
SUGAR
May Sugar was lower early Wednesday after reaching its highest level in three weeks on Tuesday. There is a mix of bullish and bearish news this morning. The Indian Sugar & Bio-Energy Manufacturers Association lowered its sugar production forecast for 2025/26 to 29.3 million metric tons from an earlier estimate of 30.95 million. This is in line with a report last week from Reuters in which “unnamed trading companies” were cutting their forecasts because untimely rains had lowered yields were key growing regions. Hedgepoint released some forecasts on Tuesday that would seem to limit upside potential in sugar prices. They expect the global sugar surplus to grow to 3.4 million tons in 2026/27, up from 2.8 million tons in 2025/26.
COFFEE
May Coffee was near unchanged early Wednesday after a bounce off a six-month low on Tuesday. The market has moved down into a 5-week consolidation pattern from last July-early August that may provide support. Brazil is expected to have a strong crop this year, but that has already been priced in. Weather conditions continue to be favorable, there are still a couple of months left before harvest, and traders may be reluctant to lean too much on the sell side at this point. Conab has launched a new platform to help monitor Brazil’s coffee crops and detect if beans are being grown on areas deforested since 2020. This is in anticipation of the European Union’s anti deforestation law, that will prohibit imports of commodities linked to deforested land. The law has been postponed several times, but it is expected finally go into effect for large operators and traders at the end of this year and for smaller businesses on June 30, 2027. Marcos Matos, the chief executive officer for coffee exporters group Cecafe, stated that the EU represents approximately 44% of their coffee market
COTTON
May Cotton extended its rally early Wednesday to reach its highest level since January 20. Short covering has been noted by the decline in open interest and is not a surprise give Commitments of Traders data showing funds are holding a near record net short position. The trade is also reluctant to push lower at the beginning of the growing season. The US began collecting a temporary 10% global import tariff this week, short of the 15% President Trump announced over the weekend. A White House official said the Trump administration was working to increase it to 15%. There has been some concern that some US trade partners will renege on trade deals they had already worked out under the tariffs that the US Supreme Court rejected last week, but on the other hand, cotton sales to countries like Vietnam are already at record levels, and they do not have a history of cancelling. Cotton are probably skeptical that this week’s export sale report will match last week’s 499,391 bales (old crop and new crop combined), which was not only a record for the marketing year, it was the highest for any week in more than two years.
COCOA
May Cocoa was slightly higher early Wednesday following a move to a new contract low on Tuesday. The Crisis of the Unsold Cocoa may be approaching a climax. Industry exports and trading executives are estimating the Ivory Coast will have accumulated about 200,000 metric tons of unsold cocoa by the end of March unless the government cuts state-regulated farmer prices. Ivory Coast’s regulator, the Coffee and Cocoa Council said this number is “erroneous,” but they did not give details. Two executives at trading houses said that that Ivorian traders – who buy cocoa from farmers and sell it to international traders – have defaulted on at least 100,000 tons. In January, Ivory Coast pledged to buy 100,000 tons of cocoa from farmers at a cost of $500 million. Another 100,000 tons of main crop beans are expected to be harvested by the end of March, which would leave about 200,000 tons unsold if the number are to be believed. Ivory Coast has reportedly sold 200,000 tons of the upcoming mid-crop to international traders after a solution was agreed to last week with the exporters group. Ivory Coast said this week that it will announce the mid-crop price by the end of the month, and perhaps this is what they meant by a “solution.”
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