ADMIS News
SUGAR
May Sugar has struggled to move above the 20-cent level for the past four sessions, and that could be a key resistance area this morning. According to a Reuters poll, analysts think rally will be short lived as supply from Brazil and Inda is expected to increase later this year. However, the recent dry trend in Brazil is raising concerns about their upcoming crop. World Weather Service says sugarcane tonnage will be reduced the longer dryness prevails. So far, crops in Sao Paulo, southern Mato Grosso do Sul and neighboring states have not been seriously affected. The Unica bi-monthly report on Brazilian center-south production for the first half of February will be released this morning. The previous report showed that as of February 1, cumulative production for 2024/25 was down 5.5% from last year. This time of year is a slow period for harvest, but the recent drier than normal conditions may allow growers to start to pull in cane that had not been harvested ahead of the rainy season. Harvest usually picks up in March, and it accelerates in April with the start of the new marketing year.
COCOA
May Cocoa was slightly higher overnight after finding support at Monday’s low yesterday. Yesterday it was reported that Ivory Coast customs had seized about 2,000 metric tons of falsely declared cocoa beans at the main port in Abidjan. The customs department had discovered that a cocoa exporter had made a false declaration in order to pay a smaller export tax, and in response they seized 100 containers of cocoa that had been falsely declared as rubber. Taxes on cocoa exports are around 19.5%, while the rubber tax 1.5%. If this type of smuggling proves to be widespread, it could mean cocoa port arrivals understated. World Weather Service expects periodic showers and thunderstorms in west Africa through the next week. Precipitation will be sporadic, but by early next week many areas should have received at least some rain. The maps this morning show most growing areas saw little or no rain over the past 24 hours, except for the southwestern coast of Nigeria. ICE certified cocoa stocks increased by 7,955 bags yesterday to 1.442 million, their highest since December 12. Stocks have increased 55,554 bags over the past five sessions. ICCO data will be released this week, and it should have the first official estimates for the 2024/25 marketing year. The trade seems to be looking for global production/grind to be close to balanced, with expectations ranging from a small deficit to small surplus. This would follow three straight deficits of 216,000 metric tons in 2021/22, 64,000 in 2022/23, and 478,000 in 2024/25.
COFFEE
May Coffee drifted lower again overnight, extending the selloff that started last week. Dealers interviewed by Reuters mentioned increasing concerns about high prices affecting consumption, and they have also said that roaster buying interest has been drying up. However, Rabobank noted that Brazilian exports are decelerating amid concerns that this year’s crop will be small. Dry weather in Brazil continues to be a concern, with World Weather Service warning of small cherry size and lower quality beans. Most of the harm to this year’s production was due to last year’s drought, but the persistent warm and dry conditions in recent weeks are starting to raise additional concerns. However, expectations for Vietnam’s crop could be starting pressure prices. JDE Peet’s 2024 profits beat market expectations, and they forecast a small decline in the 2025 due to high bean prices. ICE certified arabica stocks increased by 10,371 bags yesterday to 803,066. Stocks have increased 44,552 over the past five sessions.
COTTON
May Cotton is struggling to break out of a week-long consolidation, seeing pressure from weaker crude oil prices and a concerns about the US and global economy. Yesterday’s US Consumer Confidence reading showed a decline of 7 points to 98.3 in February versus expectations of 102.5, and this undermines demand expectations for cotton. Lower crude prices mean man-made fibers are more competitive. At least the dollar has been weaker, which improve the outlook for US exports. US cotton export sales have improved recently, with last week’s report showing sales for the week ending February 13 at 312,452 bales for the 2024/25 (current) marketing year and 34,320 for 2025/26 for a total of 346,772, the highest they had been since January 16. Cumulative sales for 2024/25 have reached 92% of the USDA forecast for the marketing year versus a five-year average of 93% for this point in the season. The 2025/25 USDA Outlook Forum later this week will provide the first official outlook for the 2025 growing season. A Bloomberg survey has an average trade expectation for US 2025/26 planted area at 10 million acres (range 8.8-10.1 million), which would be down from 11.2 million in 2024/25. Production is expected to come in around 13.6 million bales (range 11.6-15.8 million) versus 14.4 million in 2024/25, and ending stocks are expected around 4.7 million bales (range 3.9-6.5 million) versus 4.9 million in 2024/25. Even with an 11% drop in planted area and production down 800,000 bales, the survey has only 200,000-bale decline in ending stocks.
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