ADMIS News
COCOA
September Cocoa extended Friday’s recovery overnight and managed to close the gap from the lower open on Thursday. The market sold off on Thursday after European and Asian 2nd-quarter grind numbers came in sharply lower than year-ago levels, down 7.2% and 16.3%, respectively, but the market recovered on Friday after the North American grind was down only 2.8%. Ivory Coast port arrivals totaled 13,000 metric tons for the week ending July 20, up from 12,000 the previous week and down from 14,000 a year ago. Cumulative arrivals for the 2024/25 marketing year have reached 1.653 million tons, up from 1.644 million a year ago but below the five-year average of 2.007 million. The weather in west Africa looks benign. As drier conditions should help crops avoid disease. World Weather Service reports that seasonal rain has shifted far to the north of cocoa production areas from Ivory Coast into southwestern Nigeria. There have been some periodic showers across portions of Nigeria and a few western Cameroon locations. Most of the rain in crop areas was light, although a few areas of moderate rain were suggested in satellite imagery. Net drying is not unusual at this time of year.
COFFEE
With the US importing roughly a third of its coffee from Brazil, the threat of a 50% tariff on US imports from that country has cash market buyers reluctant to commit, especially given the uncertainty surrounding the implementation. This may be one reason that September Coffee has managed only a modest bounce off the lows from earlier this month. The tariff implications are mixed. It would likely raise prices for US consumers, but it would also leave Brazil looking for other buyers. Deliverable locations for the NY futures are located in the US and Europe, with 85% of certified ICE stocks currently located in Antwerp. Last week Cecafe said advanced negotiations regarding the tariff were ongoing. Safras & Mercado reports that Brazil’s 2025/26 coffee harvest was 77% complete as of July 16, up from 74% at this point a year ago. World Weather Service reports no threatening cold weather occurred in Brazil coffee areas over the weekend and that none is likely through the next ten days.
COTTON
December Cotton is lower this morning but is inside the range of the past five sessions, which is also near the upper end of the trading range of the past month. The US and global supply/demand setup for 2025/26 can be described as “ample,” with the US stocks/use ratio forecast at 32.4% versus a five-year average of 27.1% and the world ratio at 65.5% versus 65.95 on average. However, there is not much of a weather premium built into the market. So far it has not needed one, with US crop conditions as of last week’s Crop Progress report showing 54% of the US crop rated good/excellent versus a five-year average of 46% for this point in the season. The next update will be released this afternoon. The US drought monitor show only 3% of production is in an area experiencing drought. The 6-10 and 8-14 day forecasts show above normal temps and below normal precipitation for West Texas.
SUGAR
October Sugar sold off overnight, likely on disappointment that the market failed to close above the 50-day moving average on Friday after trading above that line for the first time since April earlier in the session. The market got a boost on Friday from a statement from the President Trump that Coca-Cola had agreed to use cane sugar in its beverages in the US, but the statement from the Coca-Cola was a little more nuanced, saying ”more details on new innovative offerings within our Coca-Cola product range will be shared soon.” The market had drawn support on reports of drier conditions in southern India and Thailand, but as of Friday chances for rain in in both areas were improving. The lower than expected production out of Center-South Brazil for the second half of June as shown in last Monday’s UNICA report lent only mild support in the immediate aftermath of the release.
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