ADMIS News
COCOA
Cocoa has held up relatively well to any demand concerns that may have been fueled by the attack on Israel, but traders may become cautious ahead of European third-quarter grind data, which will be released on Thursday. Risk appetites improved late Monday, which could improve the demand outlook. Expectations for a third straight global supply deficit provide support to the market, and early main crop harvest in west Africa is expected to be lower due to the of poor growing weather this summer However, reports out of Ivory Coast have improved recently, with a mixture of rain and strong sunny spells reported last week that should help small pods develop and extend the October-March main crop.
COTTON
December cotton sold off overnight as it gave up yesterday’s quick gains from the crude oil rally. The trade is looking for only a small reduction in US ending stocks in Thursday’s USDA supply/demand report, as lower production is expected to be met with lower exports. Global demand remains a concern, even as US production is revised down because of the hot and dry weather this summer in Texas and the Delta. Once the report is out of the way, the trade may start to focus on crops in Australia and India, which could see sharp reductions this year due to El Nino.
SUGAR
March sugar is climbing towards a retest of its mid-September highs. Energy prices were sharply higher yesterday in the wake of the attack on Israel by Hamas, and they have held those gains overnight, and this provides carryover support to sugar. Concern over this season’s production from India and Thailand continue to dominate the supply side of the market. The Brazilian sugar industry group UNICA will release second-half September production data this morning, and analysts are expecting another near-record result. The main producing regions had little or no rain during the period, which allowed mills to maintain a strong harvest and processing pace. It has been rainy so far this month, which is disrupting the harvest and crush pace.
COFFEE
A positive turnaround in global risk sentiment late yesterday helped the coffee market hold its ground above last week’s low. The Brazilian real turned higher, which should ease pressure on growers to market their newly harvested supply. Brazil trade group Cecafe will release September export numbers today. Above-normal rainfall for Brazil’s major Arabica growing regions last week has weighed on the market, as that should benefit flowering for the 2024/25 crop. ICE exchange coffee stocks were unchanged on Monday with no grading activity, and they remain close to an 11-month low. Vietnam’s exports could fall to their lowest level in 12 years.
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