ADMIS News
COTTON
Cotton prices have stayed within a tight range early in today’s action in contrast to the wide-sweeping ranges of Wednesday and Thursday. Growing areas in the southeast US will receive significant rainfall today and several days next week, and that will boost soil moisture levels for upcoming planting and is pressuring prices. There was carryover pressure from weakness in US equities and grains. Today’s US export sales report is expected to have a sizable decline from last week due to the slowdown in end-of-year/holiday business. The dollar reached a new 3-week high early today, which has weighed on cotton prices as that will make US cotton exports less competitive.
COFFEE
March coffee continues to hold above Wednesday’s low as it posted a mild loss Thursday while having mild early gains this morning. Rain in the forecast for Brazil’s major Arabica growing areas early next week should benefit their upcoming crop and is weighing on prices. Honduran fourth quarter 2023 coffee exports came in at 347,222 bags, 20% above Q4 2022. Costa Rican fourth quarter coffee exports were 76,681 bags, 21.8% over fourth quarter 2022. Both signal the improvement in Central American production this season and is pressuring prices.
COCOA
Cocoa’s coiling price action to start out 2024 has held the market above last Friday’s 3-week low and on course for a positive weekly result. While global risk sentiment has had a sluggish start to the year, cocoa has the bullish supply setup for prices to hold their ground going into the weekend. West African supply problems continue to underpin cocoa prices at the top end of their 15-month uptrend as they have been a key factor for the market expecting a sizable global production deficit this season. Of the world’s 8 largest cocoa producing nations, we expect that only Brazil will see larger output during the 2023/24 season.
SUGAR
The sugar market started out 2024 with three sessions trading well inside of last Friday’s selloff and have begun today’s action just below the midpoint of last week’s trading range. With south Asian supply issues providing support, sugar remains on-track to break a 2-week losing streak. India’s sugar production during the fourth quarter was 11.2 million tonnes, 7.6% below last season’s total of 12.135 million, and is likely to keep them out of the global export market this season. Thailand’s Sugar & Cane Board forecast their nation’s 2023/24 sugar production between 8.0 to 8.5 million tonnes which is 25% below last season’s output, but their production decline has been widely expected by the market. The China Sugar Association estimates their 2023/24 sugar production at 3.2 million tonnes which would be 60,000 lower than their 2022/23 output. The analytics group Czarnikow forecasts global sugar production surplus of 1.6 million tonnes for 2023/24 due in large part to record high Brazil production. They also expect to see Thailand’s output improve from better rainfall during the second and third quarters of 2024.
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