ADMIS News
COFFEE
May Coffee was higher overnight following five straight sessions of lower closes. Prior to the recent selloff, the market may have gotten overbought on “too dry in Brazil” theme, but there is no end in sight to the drier than normal conditions there. World Weather Service says the pattern shows no signs of changing through the first half of March, and below normal precipitation is expected to continue in the second half of the month, although it may not be quite as dry. They expect temperatures will remain warmer than normal, which would result in significant crop stress that could slow cherry development for unirrigated trees. This year’s crop was already expected to be poor because of the extreme drought last year. Rain in Mexico and Central America through the next week is not likely to be great enough to support pollination in areas that may have recently flowered and those flowers may be aborted. ICE certified arabica stocks decreased by 3,689 bags yesterday to 799,377.
COCOA
May Cocoa was lower overnight but was inside yesterday’s range. The market saw a steep selloff on Friday and Monday, driven in part by the recent arrival of seasonal rains in West Africa. As reported by World Weather Service, rains are increasing in West Africa. They have been sporadic, but this is a normal pattern when the region emerges from its dry season. Some areas of Ghana, Nigeria, and Cameroon saw rain over the past 24 hours. Ivory Coast customs seized about 2,000 metric tons of cocoa this week that had been falsely declared as rubber to avoid export taxes. The ICCO quarterly update is scheduled to be released this week, and it should show the group’s first estimates for the 2024/25 marketing year. The trade seems to be looking for the global production/grind balance to be close to flat, with expectations ranging from a small deficit to small surplus. This would follow three straight deficits of 216,000 metric tons in 2021/22, 64,000 in 2022/23, and 478,000 in 2023/24. ICE certified cocoa stocks increased by 5,284 bags yesterday to 1.447 million, their highest since December 9. Stocks have increased 64,161 bags over the nine sessions.
COTTON
May Cotton fell below the February 7 low overnight, leaving the next support the February 3 contract low at 66.25. Low prices have the trade looking for a drop in US planted acreage this year, but the market also sees a dismal export outlook. US cotton export sales have improved recently, with last week’s report showing sales for the week ending February 13 at 312,452 bales for the 2024/25 (current) marketing year and 34,320 for 2025/26 for a total of 346,772, the highest they had been since January 16. Cumulative sales for 2024/25 have reached 92% of the USDA forecast for the marketing year versus a five-year average of 93% for this point in the season. The 2025/25 USDA Outlook Forum this week will provide the first official outlook for the 2025 growing season. A Bloomberg survey has an average trade expectation for US 2025/26 planted area at 10 million acres (range 8.8-10.1 million), which would be down from 11.2 million in 2024/25. Production is expected to come in around 13.6 million bales (range 11.6-15.8 million) versus 14.4 million in 2024/25, and ending stocks are expected around 4.7 million bales (range 3.9-6.5 million) versus 4.9 million in 2024/25. Even with an 11% drop in planted area and production down 800,000 bales, the survey has only 200,000-bale decline in ending stocks. World Weather Service says that West Texas, South Texas, the southwestern U.S. desert region will continue to experience little to no precipitation through the first half of March. Rains will be needed ahead of planting.
SUGAR
May Sugar sold off overnight despite a tighter global supply outlook for 2024/25 by the International Sugar Organization (ISO). In their quarterly update released today, ISO projected a global deficit of 4.88 million metric tons for 2024/25 (October/September), almost double the previous forecast calling for a 2.51 million-ton deficit. This was attributed to a drop in India’s production to 27.27 million tons from a previous forecast of 29.31 million (and 32.20 million in 2023/24). Global production was lowered to 175.54 million tons from 179.07 million in the previous forecast, and consumption was lowered to 180.42 million from 181.58 million. There were downward revisions as well for Pakistan (6.16 million versus 6.75 million previously) and Thailand (10.45 million versus 11.00 million). Yesterday’s Unica report on Brazilian Center-South sugar production showed first-half February output was unchanged from the second half of January at 7,000 tons but down from 28,000 for the same period last year. Cumulative production for 2024/25 (April/March) was down 5.57% from a year ago. Ethanol production is running 3.72% ahead of year ago. Ukraine may cut its sugar beet sowing area this year to 230,000 hectares from 253,000 in 2024, the head of the sugar union told Reuters on Thursday.
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