ADMIS News
SUGAR
May Sugar appears ready to extend this week’s rally this morning, but the trade could get anxious to take profits given the overbought technical condition. Louisiana sugarcane areas saw another freeze this week, causing additional damage to a crop that had already experienced extreme cold in January. Lows yesterday this morning were mostly in the middle and upper 20s, and temperatures were in the 20’s again overnight. Louisiana represents about 50% of US cane sugar production and 22% of total US sugar production. Brazil cane areas are expected to see net drying over the next week to 10 days, which could cause crop stress.
COCOA
May Cocoa is lower this morning, possibly because the seasonal rainfall in west Africa is allying some of the concerns about mid-crop production. Much of central Ghana received moderate rainfall over the past 24 hours, as Ivory Coast did the previous day. Parts of Ivory Coast saw some light rain overnight. World Weather Service says Ivory Coast and Ghana will see daily rounds of showers and thunderstorms through this weekend. They expect shower activity to diminish next week, but light showers could be seen in parts in Benin, southeastern Nigeria and Cameroon. The weather pattern in west Africa is turning wetter, which should bring relief to farmers concerned about pod development. The Ivory Coast exported association GEPEX said yesterday that the nation’s cocoa grind totaled 63,225 metric tons in January, down 0.2% from the same period last year. Cumulative grind since the marketing year began had reached 245,549 tons, up 0.7% from the same period last year. ICE warehouse stocks increased by 20 bags yesterday to 1.404 million. Stocks are up 20,983 bags over the past five sessions.
COFFEE
May Coffee is slightly higher this morning after extending yesterday’s selloff slightly overnight. Brazil’s coffee growing regions still look dry, and this could be providing support. Coffee broker Pine Agronegocios said yesterday that they expect Brazil’s 2025/26 crop to fall 8% from 2024/25 to 59.75 million 60-kg bags due to the impact of last year’s drought and larger-than-expected pruning of coffee trees. They based this assessment on a crop tour. Arabica production is expected to decline 16% to 36.46 million bags, and robust is expected to increase 8% in 2025/26 to 23.29 million bags. Farmers tend to prune trees when they are in bad condition or when fruit loads disappoint, and this sets the trees up for a strong crop the following year. World Weather Service expects little change in weather over the next ten days, with poorly distributed rain and warm temperatures depleting topsoil moisture and increasing the chances of crop stress. ICE certified arabica stocks increased 4,510 bags yesterday to 779,063. Stocks are down 70,872 over the past five sessions.
COTTON
May Cotton appears to have resumed its bearish posture after failing to push through the 50-day moving average this week. Low prices attract buyers, but once the market rallies, they back off. The export sales report this morning could provide some indication whether the recent rally discouraged sales. Last week’s report showed net sales of 263,775 bales (current and new crop combined) for the week ending February 6. Sales had averaged 304,000 for the previous four weeks. Shipments totaled 260,905 bales that week, which was the highest since the marketing year began. Overall, 2024/25 exports have been dismal, with the cumulative sales for the marketing year the slowest since 2025/16. But as of last week, sales had reached 89% of the USDA forecast for the marketing year versus a 5-year average of 91% for this point in the season, so they are not too far behind the expected pace. Tariffs threatens to lower US exports even further if other nations retaliate. World Weather Service says rain will be needed during the second half of winter and early spring in the southwestern desert region, southern California and both South and West Texas to ensure favorable soil moisture for spring planting. The 8-14 day forecast has slightly above normal chances of rain across the US.
May Cotton could see some support today IF export sales come in strong (350,000+ bales?). However, the market fell below the 9-day moving average this week, which compounded with the failure at the 50-day last week suggests it could retest the contract lows at 66.25 from February.
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