ADMIS News
SUGAR
October Sugar fell to its lowest level since July 2 yesterday, as global weather continues to support strong cane crops. World Weather Service said India’s monsoon will continue to produce a mostly good rainfall distribution over the next two weeks. Recent drying in central areas was welcome, although more may be needed to reduce flood potentials. Recent rain in the far south of India has begun to improve soil moisture for late season planting, and much more rain is expected over the next ten days. Vietnam rainfall is expected slowly improve during the next couple of weeks along with that in parts of Thailand, Laos and Cambodia. Brazil production recovered in July after rains in June slowed harvest.
COFFEE
December coffee is lower this morning following a brief rally yesterday. News that China was allowing more Brazilian coffee companies into their markets offered some support, but traders are also skeptical that this will be enough to offset the potential loss of US business when the 50% tariffs go into effect. News that Brazil’s Supreme Court put former President Jair Bolsonaro under house arrest ahead of his trial for an alleged coup plot would seem to lower the chances of getting those tariffs reduced. Colombian coffee production recovered in July after being held back by heavy rains earlier this year. Colombia’s National Coffee Federation reported yesterday that washed coffee production totaled 1.37 million bags in July, up 19% from the same period a year ago. This was the strongest July in a decade and marked a dramatic recovery from April, May and June, which were all down sharply from year ago levels. The 12-month total has reached 14.604 million bags, up 18% from last year after being down 5% in April, 27% in May, and 22% in June. Vietnamese government data released yesterday showed the nation exported 103,000 metric tons of coffee in July, up 34.6% from the same period a year ago. Cumulative exports for the calendar year so far have reached 1.05 million tons, up 6.9% from a year ago. Cooxupe, Brazil’s largest coffee co-operative, said on Tuesday that its farmers had harvested 74.2% of their expected crop as of August 1, up 10.6 percentage points from the previous week. Vietnam should see a gradual return of rain during the next week. Coffee conditions should remain favorable but improve with the greater rainfall next week. Indonesia should see an improving rainfall trend through the next week as well.
COCOA
December Cocoa was slightly lower this morning after it rallied yesterday back to the upper end of a two-week range. The market drew support yesterday from a low Ivory Coast cocoa arrivals number last week and renewed uncertainty about the upcoming crop after some farmers there expressed concerns about cool conditions and a recent lack of rain. Ivory Coast and Ghana have seen some precipitation this week, but World Weather Service doesn’t expect a return of regular rainfall until mid-month. It is not unusual for Ivory Coast and Ghana to experience dry conditions in late Jully and early August. Rain mixed with sun is ideal. Second-quarter grind data already showed how high prices had hurt demand. Candy manufacturers reduced costs by introducing new product lines that used less chocolate. The new US tariffs on imports from major cocoa producers are the minimum 10%, but this does add to cocoa manufacturers costs.
COTTON
December Cotton traded to its highest level in five sessions overnight but is back near unchanged this morning, A dry trend emerging in west Texas has the potential to provide some support to the market, as up until now, growing conditions have been near ideal. World Weather Service said west Texas cotton areas still need greater rain and some additional warm weather to support the best dryland production. They expect minimal precipitation next week, which could stress crops. Xinjiang, China crops are rated favorably. Water supply for irrigation remains adequate and temperatures have not been excessively hot. Seasonable temperatures and limited rain is expected for the next ten days. There have been suggestions that the June 30 acreage report overestimated cotton plantings and that next week’s WASDE report could show a reduction. Unfortunately for the bulls, the demand picture is not very strong.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
