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West Africa Rains Fall Short


May cocoa has started out strong today with a move above yesterday’s all-time high. Weather reports out of West Africa continue to bode poorly for the mid-crop. Farmers are saying that the pods need rain and are describing the heat as “unbearable.” Marketing for mid-crop usually begins in early April. Farmers said they were holding onto beans waiting for the official minimum farmgate price to increase to 1500 CFA from 1000. The increase was reported yesterday. Ivory Coast cocoa arrivals totaled 17,000 tonnes for the week ending March 31, down from 26,000 for the same period last year. Cumulative arrivals since the marketing year began on October 1 have reached 1.301 million tonnes, down 26.7% from the same period last year.

Cocoa pods and beans


May coffee extended yesterday’s rally overnight to trade to its highest level since March 7. There were reports that heavy rainfall over Brazil’s major Arabica growing areas last week may have damaged coffee trees. Brazil is widely expected to see larger production for a third season in a row, as their on-year/off-year cycle for Arabica coffee may have been broken by poor weather in 2020 and 2021. Colombia’s production pace has been on the mend since last year, but they are still well below output levels from two and three years ago. Global Robusta supply has tightened over the past few months following a four-season low in Vietnamese production, and that continues to support coffee prices. The Vietnam Coffee-Cocoa Association expects Vietnam’s coffee production for 2023/24 to decline by 20% from 2022/23, to around 1.33 million tonnes. Vietnam exported nearly 600,000 tonnes of coffee in the first quarter, up 3% from a year ago. Coffee exports from Honduras rose 12% in March from the same period a year ago after beans that had been set to ship in February were delayed until the following month. Broker hEDGEpoint said European countries are boosting imports of Arabica beans as the premium over robusta is at historic lows. The Brazilian real fell to its lowest level since October yesterday, which could encourage producer selling.


May cotton closed higher yesterday off the lower-than-expected plantings number last week, but further gains may be limited by concerns about export demand due to increases in Australia’s crop estimates. The USDA raised its forecast for Australia’s cotton production for 2023/24 by 200,000 bales to 5 million, and it forecast 2024/25 production at 5.5 million. Last month, Cotton Australia said that the country would produce at least 4.5 million bales in 2023/24 after widespread rainfall boosted yield. Most of Australia’s cotton is harvested in April and May. Yesterday’s weekly USDA crop progress report showed 3% of the US cotton crop was planted as of Sunday, same as a year ago and slightly below the five-year average of 4%. Traders may get cautious ahead of the US jobs report on Friday, as strong economic data can be key driver for demand expectations.


May sugar extended yesterday’s rally overnight to trade to its highest level since February 27. The drier than normal weather so far this year is expected to negatively impact Brazil’s Center-South 2024/25 production. The region has only one day of rain in the forecast for the next week, which should help crushers get off to a fast start. The CEO of the French sugar company Tereos said he believes the smaller Brazilian crop this year has already been priced by the market and that future price movements will be driven by Brazilian production numbers as the harvest picks up, as well as by any news from the Indian government related to sugar exports. Tereos is forecasting Brazil’s Center-South cane production to be around 590 million tonnes in 2024/25, down from 675 million in 2023/24. The company expects to start to crush this week, a bit earlier than usual, as there is cane ready in the fields. There are reports that Egypt’s GASC bought 150,000 tonnes of sugar in a recent tender, which is evidence of good demand.


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