ADMIS News
COTTON
July Cotton was a little higher overnight on weakness in the dollar. Tariff uncertainty leaves US export demand in doubt, but the lack of a weather premium this early in the growing season may be providing support. Nonetheless, soil moisture remains adequate, with the weekly drought monitor showing approximately 8% of US cotton production in an area experiencing drought as of May 20, steady with the previous week and close to last year’s 6%.
COFFEE
July Coffee has resumed its downtrend after breaking below a week-long consolidation. The advancing harvest in Brazil and Indonesia may be applying pressure to the cash market. Reuters reported yesterday that domestic coffee prices in Vietnam were lower again this week, due to increasing supply from Brazil and Indonesia. The head of the Colombian national coffee federation yesterday said they expect the nation’s 2024/25 washed arabica production at 15 million bags, up from 12.7 million the previous season (which runs from October to September). As of the end of April, Colombia’s the 12-month total had reached 14.594 million bags, down from 14.993 million the previous month. April’s production was 703 million bags, which was down 39 million from April 2024, and that data suggested their output may have peaked for the cycle. The USDA FAS released its initial assessments for 2025/26 this week that called for larger crops in Brazil, Vietnam, and Indonesia in 2025/26, primarily due to higher robusta production. Arabica crops in Brazil and Colombia are expected to decline, but forecasts for Brazil have improved since earlier this year. World Weather Service expects dry and warm weather conditions to continue in Brazil coffee through early next week, which is conducive to harvest. Some robusta areas could see light rain next week, but no general soaking is expected.
COCOA
The cocoa market got a bit ahead of itself when rallied to its highest level since December 18 this week. Drier than normal conditions in West Africa earlier this year and a slow start to the wet season have lowered expectations for the mid-crop harvest (currently underway), and a slowdown in Ivory Coast arrivals last week and reports of small poorly developed beans supported those ideas. However, West Africa has seen decent rainfall over the past couple of weeks, which improves the outlook for later in the season. The question becomes whether that will be enough to ease the global supply tightness. World Weather Service expects more showers and thunderstorms during the next week. The overnight maps showed southern Ivory Coast and Ghana had moderate rainfall over the past 24 hours.
SUGAR
The sugar market has fallen under pressure this week in the wake of forecasts for a global surplus for 2025/26 and expectations for production increases for Brazil, India, and Thailand, and Reuters reported yesterday that sugar buyers have been reluctant to commit. However, the market may be reluctant to push too much lower before the UNICA report on first-half May production for center-south Brazil is released next week. Production during second half of April saw a steep drop from a year ago, which was attributed to too much rain during the period.
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.
