ADMIS News
COCOA
July Cocoa gapped lower overnight, extending the selloff from the May 20 high and trading to its lowest level since May 12, as the market has grown less concerned about the condition of the West African mid-crop. The recent patten of rain and sunshine has been good for pod growth, and the forecast calls for a mix of both rain and sun to continue for another ten days. It was a bearish development seeing prices continuing to fall despite a drop in Ivory Coast arrivals. ICE exchange stocks increased 94 bags yesterday to 2.188 million, their highest since September 23.
COFFEE
July Coffee was slightly higher overnight after falling to its lowest level since April 10 yesterday. Industry experts gave Reuters a mixed assessment of Brazil’s arabica harvest yesterday, with at least one purchasing manager impressed by bean size, even if productivity was lower as expected. Vietnam domestic robusta prices were down this week following a drop in London prices and amid comments the newly harvested beans in Brazil and Indonesia were alleviating the supply tightness. World Weather Service said that a cooler trend will appear periodically over the next 10 days to two weeks in the Brazilian coffee areas, but there will be no risk of crop damaging cold. Still, any forecast of threatening cold may support a bounce. ICE certified arabica stocks decreased by 6,353 bags yesterday to 886,115. This was the first daily decline in nine sessions.
COTTON
July Cotton is chopping around in the lower end of a two week range, as the US crop is not threatened enough to offset lackluster demand. US plantings are slightly behind normal, dragged down by heavy rains and wet soils in the Delta. West Texas has been dry, but the region is expected to seeing good rains over then next week to 10 days. The Delta is also seeing more moisture that will likely delay plantings again this week. There is a potential for drier conditions to emerge next week with the possibility of a ridge developing during the second and third weeks of June that could help dry soils. India’s rain potential rainfall for the next ten days has been decreased by recent computer forecast models, but that does not alter the expectations for a strong monsoon this year. The sharp rally in US stock prices overnight in the wake of yesterday’s court decision against the Trump reciprocal tariffs has yet lend much support to cotton.
SUGAR
The UNICA report on Brazilian Center-South sugar production for the first half of May will be released today, and while the trade expects sugar production to be down from a year ago, the damage is not expected to be as bad on a percentage basis as it was during the second half of April. A survey of 23 analysts by S&P Global called for cane crushing to be down 9.9% from a year ago and sugar production down 11.5% to 2.29 million metric tons. This would put the cumulative crush for 2025/26 down 25% from last year. During the second half April, crushing was down 49% from last year and sugar production was down 54%. Despite the expectations, July Sugar broke below its May low yesterday and fell to its lowest level since January 22. The early arrival of the monsoon has improved the outlook for the upcoming cane crop in India, and Brazil’s situation is looking much better than it was earlier this year. Recent dry weather in Brazil should help accelerate harvest after rain delays in April and perhaps in early May.
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