ADMIS News
SUGAR
October Sugar fell to its lowest level since April 21 early Monday but then recovered to higher on the day. The market likely saw its early weakness from the drop in oil prices, as that could reduce the incentive to crush cane for ethanol. But it had already experienced a steep selloff from the May highs, and a exhaustion may have set in. India’s monsoon is off to a slow start, and it is expected to be below normal, which could lower cane crop potential this year. El Nino threatens bring lower rainfall amount to Thailand as well.
COTTON
December Cotton was near unchanged early Monday as disappointing rain amounts in West Texas over the weekend countered the bearish effects of the sharply lower oil prices in the wake of the agreement between the US and Iran that would reopen the Strait of Hormuz, as lower oil prices reduce the cost of producing polyester. World Weather Inc. said West Texas rainfall this weekend was disappointing and that it will remain that way into this week. Rain is needed throughout the region, especially in unirrigated areas. The upper Delta remains favorably wet if not a little too wet in a couple of pockets. Some areas of the southeast are a little too dry but they may get some needed rain this week. So far, crop conditions seem to be holding up well.
COCOA
September Cocoa gapped higher early Monday and reached its highest level since June 3. News that the US and Iran had reached an agreement that would reopen the Strait of Hormuz eases concerns about the global economy and therefore cocoa demand. Crop conditions are on the whole are favorable in the key growing region of West Africa. World Weather Inc. said soil moisture is rated well and that routinely occurring showers and thunderstorms are expected through the next week to ten days. The precipitation is expected to be quite variable and sometimes very light but all production areas will get rain at one time or another. Distribution may be uneven, however. Sumatra and Java, Indonesia are experiencing improved rainfall and soil moisture after recent drying. Northern South America and much of Central America may see frequent rain over the next 10 days that could lead to some local flooding. There are general concerns that El Nino will bring dry conditions to Indonesia and West Africa and perhaps too much rain to Ecuador later this year that could affect output, but up until now at least, conditions have looked conducive to a continued strong advance for the midcrop and a decent setup for the main crop.
COFFEE
September Coffee extended last week’s recovery rally early Mondy and reached its highest level since June 1. The market has seen a moderate recovery rally over the past five sessions after falling to its lowest level in 18 month last week. The Brazilian arabica harvest is underway, and a very strong crop is expected, but recent rainfall appears to be slowing things down. World Weather Inc. reported that showers and thunderstorms fell over the weekend in northern Minas Gerais to Parana was mostly light to locally moderate but will slow the harvest and drying of picked beans for a while. Additional rain is expected this week.
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