ADMIS News
COCOA
Weather conditions have improved in west Africa, but it is still early in the season, and this may keep the market in a back-and-forth pattern. The trade is looking for a recovery in production after last year’s disaster. Ivory Coast farmers interviewed by Reuters said the main crop is developing well in most of the growing areas. They also stressed that it was too early to give an accurate forecast, as the weather in August and September would be the determining factor, but they believe the first stage of harvest, from October through December, will be strong. They reported a rapid increase of small pods on trees, which points to an abundant harvest. However, if rains are too heavy, it could cause pods to rot and disease to spread. Approximately 14,000 metric tons of cocoa arrived at Ivory Coast ports for the week ending July 21, down from 18,000 the previous week but the same as a year ago. Cumulative arrivals since the marketing year began in October have reached 1.644 million tons, down 28% from a year ago. Despite the increases in European and North American grind numbers in the second quarter, the combined grind from Europe, Asia, North America, Brazil, and Ivory Coast was down 4.4% from last year. Swiss chocolate maker Lindt reported a 7% jump in its half-year organic sales, as price increases made up for flat volume. The company said they would like to raise prices even more.
COTTON
Recent rainfall across the US cotton belt have benefited the crop, including Texas. The Weekly Crop Progress report released yesterday afternoon showed 53% of the US cotton crop was rated good/excellent as of Sunday, up from 45% the previous week and the highest since June 24. The was also up from 46% a year ago and above the five-year average of 50%. Texas was 46% good/excellent, up from 34% last week and 24% a year ago. Georgia was 59% G/E, up from 58% last week but down from 71% a year ago. Mississippi was 50% G/E, up from 49% last week and 71% a year ago. North Carolina was 49% G/E, up from 40% last week but down from 59% a year ago. 81% of the crop was squaring versus 74% a year ago and 76% on average. 42% was setting bolls versus 34% a year ago and on average. Traders remain concerned about demand from China, with their economy as sluggish as it has been. Weakness in crude oil was also a negative yesterday, though that was offset slightly by a bounce in the stock market. Both were near unchanged overnight. The 6-10 and 8-14-day forecasts show a return of hot weather to west Texas and a switch to normal to below normal chance of rainfall. The warmup could help the crop advance but it may dry soils as well.
COFFEE
September Coffee rallied yesterday but it has stayed inside a downward trending channel that has held it since reaching a contract high earlier this month. The market may have softened a bit last week on harvest pressure in Indonesia, but a lack of rain recently there is causing the ground to dry down, and this pattern may continue for another week or so, according to World Weather Service. Brazil is seeing some light rain in robusta areas, but most of Minas Gerais still looks dry. There is no threat of frost at this point. Safras and Mercado last week lowered its forecast for Brazil’s 2024/25 coffee production to 66.04 million bags from its previous estimate of 70.39 million, due to the dry conditions this year. ICE arabica stocks increased by 2,493 bags yesterday to 820,723, their highest since July 2.
SUGAR
Improved prospects for the Northern Hemisphere and favorable monsoon rains have pressured October Sugar back towards the May lows. Czarnikow last week raised its forecast for global production, saying improvements in EU, India and Thailand this year will more than offset a lower drop in Brazilian production. However, the European Union crop monitoring service MARS yesterday cut its forecast for EU beet yield to 73.4 metric tons per hectare from 74.4 tons estimated in June. Brazil weather forecasts indicate some rains next week, which could help the tail end the crop. Dry conditions this year have sped their harvest along but have also lowered the sugar content of the cane. The UNICA reports so far this season have shown an increase in production over last year, but that is not expected to continue as the season progresses.
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