ADMIS News
COCOA
May Cocoa is trading in a relatively narrow range this week as the market watches the weather in west Africa and anticipates the arrival of the rainy season. Ivory Coast arrivals have fallen off sharply in recent weeks, but this is typical for this time of year. World Weather Service expects precipitation to continue periodically through the next week to ten days, but distribution will vary, and they do not expect a widespread event. Temperatures are expected to stay on the warm side. Ivory Coast did see some light to moderate rainfall over the past 24 hours with some locally heavier amounts. ICE warehouse stocks increased by 17,632 bags yesterday to 1.404 million, the highest since February 5. The ICCO will release its first official estimate of 2024/25 production at the end of the month.
COFFEE
May Coffee is lower this morning following a disappointing close yesterday. Dry weather in Brazil has added to concerns about the upcoming crop, but this risk may have been built into prices after the successive rallies to new highs over the past month. ICE certified arabica stocks fell sharply on Tuesday to their lowest level since May, but they increased 16,039 bags yesterday to 774,553. The Brazilian Coffee co-op Cooxupe, the country’s largest coffee exporter, said it expects to receive about 5.6 million bags from farmers in 2025, which would be nearly 10% less coffee than it did in 2024. Hot and dry weather last year cut coffee production in areas where it operates in Minas Gerais and Sao Paulo. World Weather Service reported rain in Parana and Sao Paulo on Tuesday and early Wednesday, with most other areas dry or experiencing net drying conditions. Minas Gerais, Brazil saw no rain over the past 18 hours. A drier-than-normal pattern is expected for the next ten days, which would increase tree stress and possibly affect cherry quality. Robusta farmers in Vietnam are reportedly reluctant to sell, in anticipation of higher prices. However, Indonesia’s harvest is approaching, which could force some competition.
SUGAR
May Sugar achieved another technical milestone yesterday by closing above the 100-day moving average, and it extended its rally overnight. The market has gained 2.94 cents (18%) off its January 21 lows. Bi-weekly Unica reports have shown a sharp slowdown in Brazilian production and an increased focus on ethanol. Indian production looks less than previously anticipated. The Indian government had previously announced that it would allow 1 million metric tons of exports for 2024/25, but since then there have been reports of early mill closings, which is viewed as evidence that cane supplies are dwindling. Unofficial reports say that Indian exports would top off at 700,000 tons. World Weather Service says the Brazilian crop could be stressed if the current dry conditions extend into March.
COTTON
Disappointed with its failure to close above the 50-day moving average this week, May Cotton is backing off from its recent rally. Export sales have been decent over the past few weeks, but that may have been driven by low prices, and traders may be concerned that higher price will drive buyers away. Over the weekend, the National Cotton Council released a survey showing cotton growers intend to plant 14.5% fewer acres in 2025. The weekly export sales report will be released on Friday due to the holiday this week. Last week’s report showed net sales of 263,775 bales (current and new crop combined). Shipments totaled 260,905 bales, the strongest since the marketing year began. West Texas is dry, and the region will need rain to recharge soils ahead of planting season. The 8-14 day forecast has slightly above normal chances of rain.
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