Cocoa Back In Positive Territory

COCOA

December Cocoa edged lower overnight but recovered back into positive territory late in the session. A representative of the ICCO told Reuters that the expect Ivory Coast’s cocoa production to reach 2 million metric tons in 2024/25 season, up from 1.8 million last year but below the average of 2.2 million over the previous three years. The group does not expect Ghana’s production to exceed 500,000 tons due to problems with illegal gold mining and swollen shoot disease, which affects about 40% of plantations in that country. In Ivory Coast, swollen shoot affects about 15%-20% of plantations. The representative pointed out that a lot depends on the weather this winter when the dry Harmattan winds arrive. Ivory Coast farmers interviewed by Reuters said they were happy with the weather so far this season and that plantations had plenty of large and average-sized pods to be harvested until December. Some areas received excessive rainfall last week that slowed harvest, drying, and transportation. However, areas that did not get excessive rain were reported to be actively loading beans. Ivory Coast cocoa arrivals recovered last week after a slow start for season. Cumulative arrivals since the marketing year began on October 1 have reached 100,000 metric tons versus 115,000 this time a year ago. Rainfall has been greater than usual in Ivory Coast and Ghana in recent weeks and some drying would be welcome. Seasonal rains usually begin to withdraw from the region in November. Frequent showers and thunderstorms are expected during the next week to ten days.

COFFEE

December Coffee eased back overnight following a technical reversal higher yesterday off new concerns about the Vietnamese robusta crop. Traders and analysts interviewed by Reuters over the weekend said they expected Vietnam’s 2024/25 production to be anywhere from 5% to 10% lower than last year due to the drought earlier this year. This comes amid an improved outlook for Brazil’s 2025 production now that they are finally seeing some rain. World Weather Service says rainfall in Brazil’s growing areas is expected to be mixed over the next 10 days, but that all areas should have rain during the period, which will be good for flowering. The rainy season has arrived later than normal and after a severe drought, and coffee trees are stressed. The crop will need consistent rain in the weeks ahead.

COTTON

December Cotton was slightly lower overnight, near the bottom of yesterday’s range down action. The market was pressured yesterday by disappointment over the lack of details on China’s fiscal stimulus plans, as well by the strong US dollar and the bearish USDA report last week. Recent heavy rains in the southeastern US have lowered US crop expectations but not enough to overcome the poor pace of export sales this season. Warm, dry weather that is good for crop development and harvest is expected in the Delta and southeastern states for much of next 10 days. The US Dollar Index traded to its highest level since August 2 overnight, but it is lower on the day this morning. The weekly Crop Progress report will be released this afternoon after being delayed by the holiday yesterday. Last week’s report showed 29% of the US crop was rated good/excellent, which was the lowest for this point in the season in at least six years. Texas was below average but still above where it was the previous two years at this time. The US crop was 26% harvested versus a five-year average of 25% for that point in the season.

SUGAR

Sugar trader Wilmar International cut its projections for 2024/25 Brazilian sugar production to 38.2-39.5 million metric tons from 38.8-40.8 million in their September forecast. The company issued a statement saying that prevailing crop conditions have continued to be “catastrophic” due to a lack of rain, high temperatures, and the wildfire last month that damaged cane fields. Cane replanting was affected by the fires, which will result in an older cane “profile” that will be less productive in 2025/26. France’s farm ministry has lowered its forecast for 2024 beet production to 34.18 million metric tons from 34.38 million in September, but this was still 8% above last year’s crop and almost 6% higher than the five-year average. World Weather Service expects a mixture of rain over the next 10 days that should beneficial for the sugarcane.

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