ADMIS News
SUGAR
October Sugar broke out of recent range yesterday and traded to its highest level since April 12, adding further evidence the market put in a major low in May. The Unica report on Brazilian sugar production for the first half of June is due out any day, and a survey of analysts by S&P Global Commodity Insights has an average forecast of 2.92 million metric tons, which would be up 14% from last year. The previous report showed second-half May production at 2.7 million tons for the key Center-South region, down 7.7% from last year. The “sugar mix” (percent of sugar produced) was down in May from the previous months, but industry representatives have said they expect the mix to increase as more new-crop cane is crushed. That the dry weather the region experienced earlier this year is expected to eventually pull yields down, and traders will be watching this and upcoming reports for evidence of this.
COCOA
September Cocoa is lower this morning and is threatening to take out Monday’s four week low. A break below there would leave the May 20 low in the market’s sights. Rainfall is improving the outlook for the upcoming crops, both the late mid-crop and the 2024/25 main crop. The crops need a mix of sun and rain. Too much rain last summer sparked disease problems, which contributed to a 20% decline in Ivory Coast’s production this year and a third-straight global supply deficit. Extreme heat and drier than normal conditions this spring sharply lowered expectations for the April-September mid-crop, and the recent wetter pattern improves the outlook. Soil moisture is still running behind average.
COFFEE
September Coffee pressed slightly lower overnight but remained inside its five-week consolidation. Safras & Mercado said Brazil’s 2024/25 coffee harvest was 50% complete as of Tuesday, up 6% from the previous week. They said 42% of arabica fields had been harvested, which was ahead of the five-year average of 37%. The robusta harvest was 68% complete versus a long-term average of 65% for the period. Farmers in the Central Highlands of Vietnam were reportedly selling coffee beans at steady prices with a week ago, but trading was quiet. Traders in Vietnam said the recent rains have benefited the trees and boosted the sizes of the cherries. At least one weather service is warning of a severe cold snap forecast for Brazil over the next five days that could pose a frost threat to coffee trees. ICE arabica were down 275 bags yesterday at 808,184 after a steep decline of 33,975 bags the previous day. That was the first daily decline since June 3.
COTTON
All eyes will be on the US Acreage report this morning, with an average traded expectation of 10.829 million acres planted (range 10.5-11.2 million). This would be up from 10.673 million in the March intentions report and 10.23 million in 2023. Once that report has been absorbed, the market’s focus will likely shift to US growing conditions, which have declined over the past couple of weeks. The US Drought Monitor released yesterday showed approximately 16% of US cotton production was within an area experiencing drought (as of Tuesday), up from 9% the previous week and the highest it had been since February 13. According to the map, the drought areas are not centered around any particular region and instead are spread around small but intensive cotton growing areas in the Delta, west Texas, and Georgia, and the Carolinas. A broad swath of the southeast is experiencing abnormally dry to moderate drought conditions, as well as parts of the Delta and much of west Texas. The near term forecast calls for decent rain and in the Delta and Southeast, but the 6-10 day forecast has hot and dry after that. West Texas is not quite as hot and has better chances of rain.
US cotton export sales for the week ending June 20 came in at came in at 90,600 bales for the 2023/24 marketing year and 67,600 for 2024/25 for a total of 158,190. This was down from 300,815 the previous week and was the lowest since April 21. This was also below the four week average of 251,567. Shipments totaled 141,019 bales, down from 197,905 the previous week and the lowest since November 30. Cumulative sales for the 2023/24 marketing year have reached 111% of the USDA forecast versus a five-year average of 113%. The largest buyer last week was China at 55,600 tons, followed by Vietnam at 21,500 and Pakistan at 18,800.
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