ADMIS News
COCOA
December Cocoa was slightly higher overnight but inside Thursday’s narrow range. The market has been gradually working higher over the past two months on tight supply and concerns that the upcoming west African crop will not be as strong as previously expected. Dry conditions, particularly in Ghana, could limit the extent of the recovery. Ghana’s main crop season is due to start next week. Yesterday, Ghana’s cocoa regulator, COCBOD, announced it will use a syndicated loan for 2024/25 purchases, reversing an announcement from earlier this month. Cocoa growing regions of Ivory Coast and Ghana (the southern half of both nations) are expected to see wetter conditions return in the next couple of weeks after the dry spell this month. The eastern half of Ivory Coast saw some light rain (2-3 mm) over the last 24 hours, including the south and along the coast. Ghana was dry. The trade is anticipating the release of the ICCO quarterly statistics, which is expected to show tighter supplies for 2023/24 due to the surprisingly strong quarterly grind numbers this year.
COFFEE
December NY Coffee was moderately higher overnight after yesterday’s steep selloff in the wake of the sharp increase in the amount of arabica coffee sent for grading at ICE warehouses on Wednesday, as this suggested more supply was coming into the market. The amount pending certification jumped 57,820 bags on Wednesday to 104,415, which was the highest since May 9. Of the total submitted, 50,684 came from Brazil. Yesterday, total supply that had passed certification increased by 8,505 bags to 840,190, and the amount pending review fell by 12,641 bags to 91,774. Current supplies remain very tight in Vietnam, and the extreme heat earlier this year has lowered their crop expectations. Recent rainfall has been viewed as good for crop development. London robusta prices reached new highs overnight, which is supportive to arabica prices.
COTTON
December Cotton was higher overnight following a rally yesterday and an impressive bounce off Wednesday’s low. The Coastal Bend region of Texas and most of Louisiana and southern Alabama saw moderate rainfall over the last 24 hours, and the 1-5 day forecast call for as much as 5 inches in some areas. This could damage cops with bolls open and interrupt harvest. West Texas is expected to see as much at 1.5 inches over the next five days, which could still be beneficial. The Delta could see some rains as well. Yesterday’s US Drought Monitor showed 43% of cotton production was in an area experiencing drought as of Tuesday, up from 30% the previous week and 37% a year ago. Conditions worsened significantly in the Delta, as well as in Texas and parts of the southeastern US. The NWS 6-10 day map shows above normal chances of rain across the cotton belt, from Texas/Oklahoma to the east coast, which could help in some areas and cause problems in others. Weather department officials in India say the monsoon rains are likely to be extended into late September this year due to the development of a low-pressure system in the middle of the month, two weather department officials told Reuters. This could damage summer-sown crops, including cotton, which are typically harvested in September. Monsoon rainfall in September and October conditions could be influenced by La Niña, which is expected to develop next month. India has receive 7% more rainfall than average since the monsoon season began on June 1.
USDA cotton export sales for the week ending August 22 came in at 135,187 bales for the 2024/25 (current) marketing year and 704 for 2025/26 for a total of 135,891. This was up from 97,936 the previous week and the highest since August 1. Cumulative sales for 2024/25 have reached 4.441 million bales, down from 5.227 million at this time last year and below the five-year average of 6.698 million. Sales have reached 31% of the USDA forecast versus a five-year average of 52% for this point in the marketing year.
SUGAR
October Sugar was lower overnight after yesterday’s rally to its highest level since July 10. This morning, the International Sugar Organization forecast a global sugar deficit of 3.58 million metric tons in its first assessment of the 2024/25 (October-September) season. It also cut is forecast for an expected deficit for 2023/24 to 200,000 tons from 2.95 million in its June update. The biggest change was in the production outlook for South America, which shifted some Center-South Brazilian production to 2023/24 (pre-October) from 2024/25. This is not surprising given Brazil’s strong start for its production season that began in April and its slower pace as the season has progressed. World sugar production in 2024/25 was forecast to fall by 1.1% to 179.29 million tons, while consumption was expected to grow by 0.8% to 182.87 million. Consumption growth was less than last season and was close to or below population growth. Earlier this week Brazil’s UNICA showed a larger slowdown in production for the first half of August than expected. That report and the fires in Brazilian cane fields supported the recent rally. India announced that it will allow sugar mills to use cane juice or syrup to produce ethanol in the new marketing year starting November 1, which could pull cane away from sugar production.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
