COCOA
March Cocoa is higher this morning but inside yesterday’s range. The market has bounced off of a three-week low from last Friday but has continued the sideways pattern it has held since it put in record highs last April. Growers in Ghana filed a complaint with the state regulator Cocobod on Thursday, listing environmental and social issues, including a demand for a “living income.” Cocobod raised the price paid to farmers by nearly 45% to 48,000 cedis ($3,000) per metric ton for the 2024/25 season. Traders worry that the complaint could slow the movement of the new crop. Ivory Coast port arrivals since the marketing year began on October 1 are strongest in at least five years. Southern portions of Ivory Coast and Ghana saw light to moderate rain over the last 24 hours. A diminishing rain trend is expected, and it should be less frequent and lighter into next week. This may ease crop concerns after recent a wetter than normal trend
COFFEE
December NY Coffee was a bit higher this morning but was maintaining its generally weak pattern. London robusta futures were lower as well. Agronomists and co-ops in Brazil report ample flowering in the wake of the rains last month, but they are taking a wait-and-see attitude when it comes to forecasting the 2025 crop. The question remains whether the rains came in time to produce a strong crop after the extended heat and drought earlier this year stressed trees. World Weather Service expects alternating periods of sporadic and more generalized rainfall over the next ten days, with sufficient rain to support normal crop development. The Vietnam harvest is just getting underway, which could be what is pressing robusta prices this week. Tropical Depression Trami appears to have done little damage to the Central Highlands. The trade is looking at the potential for another tropical disturbance that could form this weekend and move toward the central coast of Vietnam. The system could bring another round of heavy rain to coastal areas and mostly light to moderate and locally heavy rain in the northern Central Highlands early next week. It could persist for several days, but overall, the coffee crop is expected to remain in mostly good condition.
COTTON
December Cotton reversed higher overnight after trading to its lowest level since September 12 yesterday. A slight recovery in equity markets after yesterday’s selloff might be lending some support. Traders have cited harvest pressure, weak fundamentals, poor export performance for the generally weak tone in the cotton market over the past six weeks. Yesterday’s export sales report showed USDA cotton sales for the week ending October 17 at 169,687. This was up from 159,769 the previous week and the highest since August 29. It was also the third week in a row that sales were above 150,000 bales, which marks an improvement over the previous five weeks. Shipments totaled 134,348 bales, the highest since August 29 as well. Cumulative sales for 2024/25 have reached 5.474 million bales, down from 6.081 million at this time last year and the lowest for this point in the season since 2015/16. Sales have reached 51% of the USDA forecast versus a five-year average of 63% for this point in the marketing year. The largest buyer this week was Vietnam at 91,156 bales, followed by China at 32,649 and Pakistan at 23,958. The countries with the largest commitments of 2024/25 include Pakistan at 1.818 million bales, Vietnam at 833,600, Mexico at 568,900, China at 536,500, and Turkey at 528,400. Heavy rains in Texas could slow harvest and cause some damage to crops. Dry conditions in the Delta and Southeast are ideal.
SUGAR
October Sugar extended yesterday’s rally overnight and traded to its highest level since October 7. The market has broken above a downward sloping, possible bull flag formation this week, which is a positive technical signal, but it needs to close above that line to confirm. Rains in Brazil rains could curtail cane crushing activity for the balance of 2024/25, but they also improve the outlook for next year. Up until the rains started, the outlook for the 2025/26 crop was looking dicey, especially after wildfires caused extensive damage to newly planted cane field. This week, Rabobank analysts projected Brazil’s Center-South 2025/26 cane crop at 580 million metric tons, which would be less than what mills are expected to in 2024/25.
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