ADMIS News
COFFEE
May coffee fell to its lowest level since August 7 early Tuesday as the market continued to work lower on the idea that supply is more than ample to meet demand. The market is inside a five week trading range 288.25-261.80 from last summer that may take some time to work through. Reuters reported yesterday that farmers in Brazil are reluctant to sell at current prices. On the whole, the Brazilian 2026 arabica crop is expected to be strong, as the weather has been mostly conducive for a good growing season. World Weather Inc. said on Monday that frequent shower and thunderstorm activity is expected in coffee areas of Brazil through Thursday, with sufficient amounts to maintain a very good outlook for cherry development. An erratic rainfall pattern is expected most of next week, and some areas are expecting could see some net drying.
COTTON
May Cotton extended its recovery rally early Tuesday and pushed through the 100-day moving average for the first time since September. On top of being oversold technically, reluctance to continue to push the market lower ahead of planting season may have contributed to the rally off contract lows from earlier this month. Cotton has to bid for acres from other crops. Funds are holding a record net short, and leaving fewer sellers waiting in the wings.
SUGAR
May Sugar has moved into a consolidation range between 14.00 and 15.00 that lasted from mid-November to the end of January that mat take some time to work through. Prices have been cut in half over the past two years, falling from 12-year highs of 28.14 in November 2023 to 13.67 this month. Funds have accumulated a record net short position, which leaves fewer sellers waiting in the wings and also leaves the market vulnerable to short covering. Low prices are expected to spark disinvestment in cane production, fewer beet plantings, and a movement towards more ethanol production in cane crushing activity.
COCOA
May Cocoa fell to a new contract low early Tuesday, as the market continued to seek a level to find buyers. Ivory Coast’s agriculture minister said on Monday that the government will announce the official fixed price paid to farmers for the mid-crop by the end of this month, earlier than usual. Sources told Reuters last week the country was considering cutting its fixed price to align with Ghana’s. In the meantime, reports of cocoa going unsold in both nation’s because the buyers are unwilling to pay the current official prices keeps the market’s bias negative. A government spokesman said Ivory Coast will be able to better deal with world price fluctuations going forward as it has developed the capacity to store cocoa and it has also increased its local processing capacity.
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