ADMIS News
SUGAR
March Sugar was lower early Monday following a decline from contract highs on Friday. The fact that the market has not fallen further is impressive given that funds are close to a record net long. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 3,585 contracts of sugar for the week ending September 8, increasing their net long to 247,051. The record net long is 286,248 from October 2016. The market has been supported by the rally in the energy markets, which raises the incentive for cane crushers for increase their ethanol mix at the expense of sugar.
COFFEE
December Coffee inched below last week’s low early Monday to its lowest level since July 1 but has yet to follow through on that move. Near term supplies are tight, but Brazilian supplies are on their way. Last week, Brazilian industry group Cecafe reported that the nation exported 3.82 million bags of green coffee in August, +31.7% from last year and a new record. Arabica coffee exports totaled 2.87 million bags, +25.7%, and robusta shipments were +53.6% at 953,592 bags. A Reuters story on Friday said trading houses are planning to deliver significant volumes of arabica coffee from Brazil to ICE exchange warehouses. Apparently, the shipments from Brazil have the potential to more than double ICE certified stocks. Two sources said Olam is seeking to certify 150,000-200,000 bags in time for delivery against the December futures contract and another source said Louis Dreyfus is attempting to do the same.
COCOA
December Cocoa started out lower early Monday but was higher on the day as the session progressed. Ivory Coast is seeing some rains, but it is still on the light side. World Weather Inc. said satellite imagery continues to demonstrate a below normal precipitation bias in central and southern Ivory Coast as well as few southwestern Ghana locations. Rain is expected in most cocoa production areas from Ivory Coast to Cameroon and Nigeria during the next week to ten days. Most of it will be light to moderate and all of it will be welcome. Greater volumes will be needed. Long term moisture deficits are not likely to go away, but there will be at least some precipitation for crop development during the forecast period. Temperatures will be a little warmer than usual as well.
COTTON
December Cotton was lower early Monday, continuing a selloff on Friday that came in the wake of the USDA supply/demand reports. The report was bullish against expectations for the US outlook, but the world numbers leaned bearish, and the bulls may have been disappointed that the US production numbers were not lowered more than they were. US 2026 production was lowered pretty much as expected, while exports were left unchanged instead of being lowered. This caused endings stocks to show a bigger decline than expected. The fact that USDA left exports unchanged my leave some traders expecting revisions downward in exports in future reports.
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