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India Not Expected to Export Sugar

SUGAR

March sugar pushed through its October highs overnight to trade to its highest level since September 22. A setback in energy prices pressured applied some pressure to sugar yesterday, and a mild recovery in crude oil overnight off concerns about the Israel-Hamas war appeared to lend support. A rebound in the Brazilian real also lent support to sugar on ideas it eases pressure on mills to produce sugar for export. Archer Consulting said that Brazilian mills have hedged roughly 10 million tonnes of next season’s (2024/25) sugar, production which is roughly in line with last year’s pace. There were reports yesterday that dealers were concerned about Mexico’s output. Two of the world’s largest producers, India and Thailand expect to see lower production this year due to El Nino. India is not expected to export any sugar at all.

sugar cane

COCOA

December cocoa has found strong upside momentum and has climbed back above the 50-day moving average for the first time since late September. Bullish supply developments have fueled the rally. For the second week of the 2023/24 season that began on October 1, Ivory Coast port arrivals come in below last year’s levels. This first week’s arrivals were well above last year because farmers had held back beans from last season to receive the higher minimum farmgate price.

COTTON

The poor US cotton crop is apparently not enough to support the cotton, which is threatening to take out its lows from last week and could be heading to the bottom of a three-month range. Global supply is not very tight. US 2023/24 cotton ending stocks are expected to be the lowest since 2016/17, but world ending stocks, while lower than last year, are still expected to be above 2021/22 levels. Brazil and Australia stand ready to fill in for the decline in US exports. US export sales are off to their slowest pace in seven years. There are also concerns about demand from China, whose shaky property sector could undermine purchases of furniture and textiles that are made from cotton.

COFFEE

December coffee was unable to extend its four-session winning streak yesterday, but it remains near the top end of its October rally. If global risk sentiment improves, the market could regain upside momentum in ideas it would improve demand expectations. Above normal rainfall over Brazil’s major Arabica growing regions last week is expected to benefit flowering for their upcoming 2024/25 Arabica crop, and that weighed on prices later in the day.

 

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