ADMIS News
COCOA
Ivory Coast’s Coffee and Cocoa Council reported that they have sold 850,000 metric tons of their cocoa export contracts for the 2025/26 season, one month ahead of their target. Sources told Reuters that puts them on track to reach their eventual target of 1.3 million tons, despite concerns about new-crop development. Earlier this week, Reuters reported that crop surveys and pod counts in Ivory Coast said showed a high mortality rate of flowers and cherelles (small pods) due to excessive rainfall, which lowered the consensus view towards the upcoming main crop production. Additional surveys in August should provide a more complete picture. July weather will be critical. World Weather Service expects daily rounds of scattered to occasionally numerous showers and thunderstorms through the next week from Ivory Coast through Nigeria and Cameroon. Rain will be light to locally moderate. The overnight maps show parts of Cameroon saw moderate rainfall over the past 24 hours. Ivory Coast saw no rain, and parts of central-south Ghana saw light amounts. European, Asian, and North American second-quarter grind data is due to be released on July 17, and the trade will be watching this for a gauge on demand in the face of high prices.
Uncertainty over the upcoming crop may limit the downside, at least until the second quarter grind data is released. Strong grind and may set the market up for a correction of the selloff from the May highs.
SUGAR
The rally off last week’s 2 ½ year lows in October Sugar has corrected an oversold condition in the market. Prices have been supported by concerns about drier conditions in southern India and a drop in production in Brazil, as well as indications that the lower prices have encouraged cash buying. Pakistan’s state agency, the Trading Corporation of Pakistan (TCP), has issued an international tender to purchase and import 300,000 to 500,000 metric tons of white refined sugar. The deadline for submission of price offers is July 18. UNICA is expected to release its report on Brazilian Center-South sugar production for the second half of June early next week.
COTTON
For the monthly USDA Supply/Demand report today, a Bloomberg survey has an average trade expectation calling for US 2025/26 production to come in at 14.21 million bales (range 13.75-14.75 million). This would be up from 14.00 million in the June report but down from 14.50 million in May. Production coming in at the average expectation would reflect the increase in planted area in the June 30 acreage report, but it would also require a lower yield and/or a higher abandonment rate. For the supply demand report, US 2025/26 exports are expected to come in around 12.47 million bales (range 12.2-12.84) versus 12.50 in the June update, and ending stocks are expected around 4.43 million (range 4.10-4.72) versus 4.30 million in June and 4.40 million for 2024/25. World production is expected at 117.24 million bales (range 116.75-118.00 million) versus 116.99 million in June, and world ending stocks are expected at 76.87 million bales (76-78 million) versus 76.80 million in June.
West Texas is expected to see more rains in the coming week. The recent rains have been viewed as beneficial for the crop, but region could use some hot and dry weather as well. The Weekly Drought Monitor showed 3% of US cotton production was within an area experiencing drought as of July 8, steady with the previous three weeks and down from 18% a year ago.
COFFEE
September Coffee managed a reversal higher this week in the face of strong robusta exports out of Asia and Brazil and good harvest weather for Brazil’s arabica crop. The 50% tariff on Brazilian imports would send US coffee prices sharply higher, but it could also create a burdensome supply setup, as US consumption would slow, and Brazil would have to look elsewhere to move their product. In the meantime, the lack of rain and the mild to warm temperatures in Brazil create an ideal environment for crop maturation and harvest progress. World Weather Service expects temperatures to remain non-threatening through at least the next ten days. However, Colombian output has been damaged by heavy rain, and the forecast calls for daily rounds of showers and thunderstorms through the next week.
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