Cotton Growing Conditions Improve

COTTON

December Cotton is higher today after reaching its lowest level since September 13 yesterday. The market has been drifting lower after a rally into September 24 off the Hurricanes that damaged some of the US crop. Growing conditions have improved since then. US export sales have improved slightly the past couple of weeks, but they continue to come up short of the average pace. The steep selloff in crude oil prices helped pressure the market yesterday, and the recovery in oil prices today has lent some support to cotton. The weekly Crop Progress report showed 52% of the US crop had been harvested as of Sunday, up from 44% the previous week and 47% a year ago. The five-year average for this date is 49%. The report also showed 33% of the US cotton crop was rated good/excellent, down from 37% the previous week but up from 29% a year ago.

SUGAR

March Sugar is higher today following yesterday’s selloff. The market saw early pressure yesterday from the steep selloff in crude oil, and the modest recovery in oil today may be providing some support to sugar. Analysts have been warning that Brazilian sugar production would tail off quickly this year due to the extended drought.  Last week’s Unica report showed 539 million metric tons of cane had been crushed as of October 16, up 2% from year ago. Analyst Green Pool said yesterday that the pace of mill closures has not been rapid enough to support a sub-600 million-ton crush this year. Wilmar said yesterday that the increase in ethanol production in India will reduce local sugar availability and prevent the country from exporting sugar in the 2024/25 season. India is the world’s second largest sugar producer after Brazil, but they have been absent from the export market due to a small crop last year and their interest in expanding their ethanol production. World Weather Services expects showers and thunderstorms to return to Parana and southwestern Sao Paulo late this week and over the weekend. The return of rainfall to Brazil has improved the outlook for next year’s crop.

COFFEE

December Coffee is lower this morning but inside yesterday’s range. Vietnam saw heavy rains from tropical storm Trami, which reached the nation on Sunday, and there were concerns that this could disrupt the robusta harvest. However, World Weather Service does not think the main coffee production areas in the Central Highlands were much affected by this event. There is potential for another tropical disturbance to form in the southern South China Sea this weekend that may move toward the central coast of Vietnam. The system would bring another round of heavy rain to coastal areas but mostly light to moderate rain in the Central Highlands early next week. Costa Rican coffee exports rose 1.6% to 1.02 million bags in the 2023/24 harvest season, which ended last month, according to their national coffee institute ICAFE. This was despite production falling 16% on the year to 1.25 million bags. They expect the 2024/25 crop to be up almost 6% to 1.31 million bags, as the crop follows a biennial schedule. Costa Rica is known for its high-quality beans, but the nation is not considered a large producer. Minas Gerais Brazil saw light to moderate rainfall over the past 18 hours. World Weather Service pointed out that it has been a few years since coffee rainfall has begun so well distributed and abundant and it may be helping producers feel a little better about the future after so many years of erratic and lighter than usual rainfall. This has helped improve the outlook for 2025 production.

COCOA

December Cocoa is higher this morning and back inside the range of the past several month. Over the weekend there were reports that pod counters in Ivory Coast had lowered their expectations for the main crop because too much rain earlier in the month had cause larger than normal flower and Cherelle mortality. However, some Ivory Coast farmers interviewed by Reuters said they saw below normal rainfall last week, which was helpful for drying and harvesting. Others reported above average rainfall, which they considered as helpful for pod development. West Africa is in its rainy season. Ivory Coast port arrivals for the week ending October 27 were around 92,000 metric tons, up from 57,000 for the same week last year. Cumulative arrivals for the 2024/25 have reached 285,000 tons, up from 170,000 a year ago, which is a gain of 25.6%. This is the highest for this point in the season in four years. We can expect a choppy market as the main crop harvest progresses. This year’s weather has been supportive to a better crop than last year, which could help to rebuild global supply.

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