ADMIS News
SUGAR
The steep decline in March sugar on Wednesday in the wake of reports that the Indian government was going to restrict sugar exports for 2023/24 is disappointing for the bulls, as expectations for lower production out of Asia have been a key supportive element for market. There has been no official confirmation of the move from the India government, which raises questions about the veracity of the report. The late-season improvement in the monsoon rainfall has suggested that the Indian cane crop may not be as bad as feared. The market continues to digest the latest Brazil Center-South supply data, which showed production in the second half of September nearly double what it was the same period last year.
COFFEE
December coffee saw mild support overnight from a better risk tone in global equity markets. The US CPI number this morning could support further gains if it comes in at expectations or lower, but a high number could raise concerns about more monetary restrictions and the potential negative impact on demand. The coffee market is technically oversold and ripe for a correction, but it has been struggling to mount a rally in the face of ample near-term supply and lukewarm demand. However, it has managed to hold its own against the low Brazilian export data this week, as those low exports suggest producer reluctance to sell at the current low prices as much as weak demand.
COCOA
Europe’s third-quarter cocoa grind fell 0.9% from a year earlier to 366,298 tonnes, but this was smaller than expected, and the news lent support to the cocoa market overnight. The North American grind data will be released next Thursday. Traders may look to this morning’s CPI report for further direction today, as a high number could raise expectations for further tightening and could be viewed as negative for demand. El Nino normally brings drier than normal weather to Ivory Coast, Ghana, Nigeria, and Indonesia and heavier than normal rainfall to Ecuador.
COTTON
December cotton extended its recent selloff and traded to its lowest level since August 23 yesterday, but the market avoided further losses overnight as positive action in equities in Asia and Europe provided a slightly better tone for cotton demand. We look for quiet trade ahead of the monthly USDA supply demand report this morning, with the potential for a big move if the report has a significant surprise. The report is expected to show a revision lower in US production, but ending stocks are only expected to decline slightly due to a drop in exports. The lower US crop is a given, the question is global demand and competition from Brazil and Australia. US export sales are off to their slowest start since 2017.
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