ADMIS News
COCOA
The cocoa market has dealt with demand concerns for more than two years, and these concerns became a notable source of pressure the past few months. Even with recent setbacks, the International Cocoa Organization (ICCO) has forecast this season’s global grindings at 5.048 million tonnes, which would be a new record high and the fifth increase in the past six seasons. For the week, September cocoa finished with a gain of 23 points (up 0.9%) which was a second positive weekly result in a row. Russia’s invasion of Ukraine has had a chilling impact on vacation travel in Europe, and vacationers are traditionally big buyers of chocolate. Recent COVID restrictions in China have dampened Asian demand prospects as first quarter 2022 Asian cocoa grindings came in slightly below their 2021 total.
COFFEE
With the market continuing to receive bullish supply news, coffee should remain well supported on a near-term pullback. For the week, September coffee finished with a gain of 2.85 cents (up 1.2%) and a fourth positive weekly result in a row. Brazil and Colombia continue to have production issues due to the La Nina weather event which provide underlying support to coffee prices. There are light showers in the forecast for Brazil’s major Arabica growing regions on Thursday and Friday, but the area should remain mostly dry through late next week. Brazil’s 2022/23 Arabica harvest is behind last year’s pace and the historic average, and that should provide underlying support to the market.
COTTON
July and December cotton closed lower on Friday, but they spent the day inside Thursday’s ranges. The market drew support from the weekly Export Sales report but sold off later in the session. The report showed US cotton exports sales for the week ending May 26 at 354,196 bales for the 2021/22 (current) marketing year and 109,063 for 2022/23 for a total of 463,259. This was up from 132,422 the previous week and the highest since February 17.
SUGAR
Since reaching a 6-week high in mid-May, sugar prices have only had 3 positive daily results over the past 12 sessions. The market continues to hold its ground above the May 16th low, however, and should continue to receive carryover support from key outside markets. For the week, October sugar finished with a loss of 28 ticks which was a second negative weekly result in a row. Front-month crude oil and RBOB gasoline prices finished the week by climbing up to new multi-year highs, which provided sugar with carryover support as that should boost ethanol demand prospects.
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