ADMIS News
COTTON
May Cotton resumed its downtrend overnight and fell to new contract lows, December Cotton was lower but held above its contract low from February 3. The USDA Outlook Forum put US 2025/26 planted area at 10.0 million acres, right on the Bloomberg average expectation. Despite the acreage decline, production was forecast at 14.6 million bales vs 14.41 million in 2024/25, as the USDA forecast a lower abandonment rate based on a less stressful (normal) growing season. 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. World cotton production for 2025/26 is projected at 116.7 million bales, down 3.8 million from 2024/25. China is expected to be the world’s largest producer, followed by India, Brazil and the United States. This would mark the third straight year that Brazil exceeded US. World Weather Service says rain will be needed during the balance 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. A hot PCE inflation number today could spark additional selling as that would put off expectations for Fed rate cuts, support the dollar, pressure the stock market, and damage US export prospects further.
COFFEE
May Coffee was near unchanged overnight. The market saw a correction off the all time highs this month, but ongoing dryness in Brazil is adding to concerns about the upcoming crop. World Weather Service expects very little change in the current dry conditions in Brazil for the next 10 days. They warn that periodic showers will not produce enough rain to counter evaporation resulting and that this could stress the crop and impact cherry development. ICE certified arabica stocks decreased by 9,751 bags yesterday to 809,128, their highest since February 17. Keurig Dr Pepper said this week that net sales in its US coffee segment fell 2.4% in the fourth quarter amid high coffee prices. Earlier this week JDE Peet’s forecast a small decline in 2025 operating profit thanks to soaring coffee costs.
COCOA
The International Cocoa Organization (ICCO) is expected to release its first report on 2024/25 global cocoa supply/demand today. The arrival of the rainy season in west Africa has eased the market’s worst fears about dry conditions. Ghana’s state-run cocoa regulator Cocobod said it will lose around $1.3 billion in revenue when it pays up for contracts rolled forward to the 2024/25 season due to poor output. Ghana’s production fell to 480,000 tons in 2023/24 from 654,000 in 2022/23 and from a peak of 1.047 million in 2020/21. Back in November, Ghanian officials were forecasting 2024/25 production at 650,000 metric tons, while an official of the ICCO said they see it around 500,000 tons. World Weather Service expects light and occasionally moderate day to day rainfall in west Africa over the next week. Rain in Ivory Coast and Ghana will be greatest during the early to middle part of next week. ICE certified cocoa stocks increased by 4,934 bags yesterday to 1.452 million, their highest since December 5. Stocks have not seen a daily decline since February 13, and the increased 69,095 bags during that time.
SUGAR
May Sugar extended yesterday’s selloff overnight and traded to its lowest level since February 13. The market plummeted yesterday after failing to push through the 20-cent level after several attempts this week. Prior to the move the market had rallied 20% off the January lows, and it was due for a correction. Yesterday, the International Sugar Organization (ISO) 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 what appeared to be bullish news. This was partly driven by lower-than-expected production in India. Over the past couple of weeks, reports of early mill closings in India had lowered expectations for their export this year. Indian Sugar & Bio-energy Manufacturers Association (ISMA) said in a statement today 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.
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