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West African Weather Less Threatening


The cocoa market has been in a 15-month uptrend that has seen prices double from their two-year lows in September 2022 to a 46-year high last month. Last week’s reports that commercial sellers were turning active seemed to spark some selling, and now that the New Year has arrived, the market is vulnerable to profit taking. March cocoa finished last week with a loss of $115 (down 2.7%), which was the second negative week of the past three. It also formed a reversal from 46-year highs on the weekly chart. (The nearby contract did the same in mid-December). Indications that the dry Harmattan winds that typically reach West Africa this time of year have not been particularly strong have also weighed on prices.


Coffee’s fourth quarter uptrend saw five pullbacks of 10 cents or more. The last and largest was a 15.70-cent decline from Thursday’s high to Friday’s low. With the market finding support from Robusta production issues, prices could be close to a near-term low. There is rain in the forecast for Brazil’s major Arabica growing regions through the end of this week, which improves the outlook for the 2024/25 crop. ICE exchange coffee stocks fell 7,175 bags on Friday and finished December at 251,224.


The possibility that the New Year will bring some active export trade seemed to support the cotton market overnight. Friday’s weekly US export sales report showed sales for the week ending December 21 at 369,857 bales for the 2023/24 (current) marketing year and 2,640 for 2024/25 for a total of 372,497. This was up from 147,991 the previous week and the highest since November 2. Cumulative sales for 2023/24 have reached 8.492 million bales, down from 8.747 million a year ago and the lowest for this point in the marketing year since 2016/17, but this is not surprising given the relatively small US crop this year.


After reaching a 12-year high in November, sugar prices on a steep 29% decline in December. The market saw a sharp rebound on Thursday, which it quickly gave back on Friday, but it did manage to hold above last week’s lows, which could be an indication of a long-term low. Reports that Indonesia will reduce its sugar import quota in 2024 weighed on prices on Friday. A major source of pressure last month was the decision by India’s government to ban mills from using cane juice for ethanol production. This was expected to add 2.5 million tonnes to their sugar output, but officials later decided to allow mills to divert 1.7 million tonnes of sugar to ethanol production. On Friday they announced a price hike for refiners that should further incentivize ethanol production.


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