Heavy Deliveries Expected

SUGAR

May Sugar extended last week’s selloff overnight and fell to its lowest level since February 12. The market has now given back 50% of the gains it made off the January lows. Expectations for heavy deliveries against the March contract have pressured the market since the middle of last week. Reuters put expectations at 34,385 lots (1.74 million metric tons) based on preliminary information from two sugar traders. Wilmar was expected to be the largest receiver at 23,073 lots. Also damaging to prices last week was the market’s failure to push above the 20-cent level after attempting to do so for four straight days. Last week, the International Sugar Organization raised its forecast for the global sugar deficit in 2024/25 to 4.88 million metric tons from a previous estimate of 2.51 million, but the market failed to rally off that news. Indian Sugar & Bio-energy Manufacturers Association (ISMA) said last week that Indian mills produced 21.98 million metric tons of sugar between October 1 and February 28, down 14% from the previous year, on lower output from key producing states Maharashtra and Karnataka. They reported that 177 sugar mills had closed their operations, compared with 49 mills at this point last year.

COTTON

May Cotton was higher overnight after trading to a new contract low on Friday. The cotton market appeared to be pulled down by the grains, especially corn, on Friday, but it has not followed those markets lower today. President Trump last week threatened China with an extra 10% tariff to take effect on Tuesday, which would bring the total tariff to 20%, and the trade fears retaliation by China against US agricultural imports. State-supported Chinese media said over the weekend that the government is formulating countermeasures that will likely include tariffs and a series of non-tariff measures. The USDA Outlook Forum last week put US 2025/26 planted area at 10.0 million acres, down from 11.18 million in 2024/25. Production was forecast at 14.6 million bales vs 14.41 million in 2024/25, but this will depend on the weather. Ending stocks were forecast at 4.8 million bales versus 4.9 million in 2024/25, and the stocks/use ratio was forecast to fall to 32.7% vs 38.6% in 2024/25. US exports were increased to 13.0 million bales from 11.0 million for 2024/25, but the tariffs could throw that forecast into doubt.

COFFEE

May Coffee was higher overnight and reached its highest level in a week. Reports that Brazilian coffee farmers are basically sold out are providing support this morning. The sales superintendent for Cooxupe told Reuters that farmers have already sold 90% of the 2024 crop and that stocks are the lowest on record for this point in the year. The sales manager of Cocapec more or less reiterated that statement  and said they will not have much to sell until harvest. Harvest usually starts around May. World Weather Service says Brazilian growing areas saw some sporadic rains over the weekend but not enough to change the current stressful environment and that another week of these conditions will be very stressful to unirrigated trees and could affect cherry development. The dry bias is expected to last through the month. ICE certified arabica stocks decreased by 3,540 bags on Friday to 805,588. Stocks increase by 17,589 bags last week. The amount pending review has fallen to 77,454, the lowest since January 29.

COCOA

May Cocoa is lower this morning after an anemic recovery off three-month lows last week. The International Cocoa Organization (ICCO) released its first official assessment of the 2024/25 global cocoa supply/demand balance on Friday, and it projected a net surplus of 142,000 metric tons, which would follow deficits of 441,000 tons in 2023/24, 65,000 in 2022/23 and 216,000 in 2021/22. World 2024/25 production was forecast at 4.840 million tons, up from 4.489 million for 2023/24. This would be the third largest production on record after 5.244 million in 2020/21 and 5.043 million in 2022/23. Ending stocks for 2024/25 were 1.478 million tons, up from 1.336 million in 2023/24 but still the second lowest since 2002. The stocks/grindings was forecast at 31.8% vs 27.3% in 2023/24, the second lowest since 1984. Ivory Coast 2024/25 production was estimated at 1.850 million tons, up from 1.674 million in 2023/24, and Ghana production was estimated at 600,000 tons, up from 530,000 in 2023/24. Ivory Coast cocoa arrivals totaled 18,000 metric tons for the week ending March 2, down from 19,000 the previous week and 34,000 a year ago. Cumulative arrivals have reached 1.386 million tons, up from 1.197 million a year ago and below the five-year average of 1.523 million. ICE certified cocoa stocks fell 691 bags on Friday to 1.451 million. Stocks were up 30,934 last week. World Weather Service says an erratic rainfall pattern is expected to continue over the next week to ten days across west-central Africa. Most areas will see rain, but much of it will be light and possibly too light to counter the evaporation; temperatures are too hot.

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