Explore Special Offers & White Papers from ADMIS

Strong Exports Keep Coffee Choppy

COFFEE

Forecasts for drier than normal weather from late March to May raises concerns about Brazil’s upcoming crop, but strong exports of the current crop appear to be keeping the market in a choppy, sideway pattern. Brazil’s trade group Cecafe said that their nation’s February Arabica green coffee exports totaled 2.81 million bags, which was 36.5% above year-ago levels. This reflects Brazil’s large 2023/24 output, but it also indicates that port congestion has eased, allowing exporters to make up for previous delays.

 

Coffee bean sacks

 

COCOA

Following a lukewarm finish last week, it took little time for cocoa to regain upside momentum. West African supply issues have the market looking at a record global production deficit this season. Ivory Coast port arrivals totaled 27,000 tonnes for the week ending March 10, up from 18,000 for the same week last year. However, total arrivals since the season began on October 1 are running 28.1% lower than a year ago at 1.114 million tonnes. West African growing areas have daily rainfall in the forecast through the middle of next week, as the region’s dry season comes to an end. Ivory Coast officials expect mid-crop production to come in at least 20% below last year.

COTTON

The buildup of spec long positions in cotton is hanging over the market and would seem to limit further upside unless there is a resumption of the strong exports sales from earlier in the year. US supplies are tight and getting tighter, but world supplies are not, and this leave traders concerned that the US may have priced itself out of the market on last month’s rally.

SUGAR

Sugar prices saw strong upside follow-through from a positive weekly reversal, with the market finding support from recent bullish supply developments. The likelihood that next season’s Brazil Center-South sugar production will be lower than this season’s 42 million tonnes (due to drier than normal conditions early this year) has underpinned sugar prices early this week. India is likely to extend its export ban through next year, as a smaller cane planted area for the 2024/25 season increases the likelihood of a decline in 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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started