ADMIS News
COFFEE
The coffee market’s consolidation pattern continues, as ample old crop Arabica supplies are balanced by concerns about the upcoming crop. Robusta traded to new 16-year highs yesterday amid reports of higher premiums in major Asian producers Indonesia and Vietnam due to strong demand and depleted stocks. Brazil’s trade ministry reported yesterday that the nation exported 3.61 million bags in February, 77% more than the same period in 2023. The exporting group Cecafe said the exports would have been bigger if not for the shipping bottlenecks resulting from late arrivals of container ships. The ICO says world coffee exports rose to 12.62 million bags in January, up from 9.54 million in January 2023. There are more than 161,000 bags waiting to be graded. Dry weather in Brazil this year has lowered expectations for the upcoming crop. The robusta harvest is expected to begin in April and Arabica in May or June.
COCOA
May cocoa has been consolidating near contract (and record) highs this week, and it could be biding time for another breakout move. There is a growing consensus that there will be a fourth straight global production deficit in 2024/25, and this at times had some analysts calling for prices to eventually reach $7000-$10,000. On the other hand, high prices could cut off demand, and this possibility has at times sparked brief corrections. There were reports this week that farmers in Ghana were hording beans in anticipation of higher prices, which could further tighten the near-term supply outlook.
COTTON
May cotton is attempting to recover from last week’s selloff and consolidate the recent gains. The Dollar Index was sharply lower yesterday, which lent support to cotton on ideas it makes US exports more competitive on the world market. Traders will be looking to today’s export sales report to see if there is any improvement over the disappointing numbers in recent weeks. Traders are also hoping China will jump back into the market after a slowdown during their New Year holidays. For the monthly USDA supply/demand forecast on Friday, a Bloomberg survey has an average trade expectation for US 2023/24 ending stocks at 2.72 million bales, with a range of expectations from 2.55 to 2.9 million. This would be down from 2.8 million in the February report and down from 4.25 million in 2022/23.
SUGAR
The sugar market has received bullish supply news almost daily from this week’s sugar conference in Dubai. The Brazilian analytics firm Datagro estimated Brazil’s 2024/25 Center-South sugar production at 40.45 million tonnes, down from 42.50 million in 2023/24, due to drier than normal weather since November. This follows lower forecasts from BP Bunge Bioenergia and from Sucden. BP Bunge also forecasted a global production deficit of 1.6 million tonnes for 2024/25. An official from an Indian trade organization projected a decline in 2024/25 cane planted area as well. However, Indonesia’s white sugar production is seen increasing 5% this year, according to the Indonesian Sugar Association, and EU sugar beet area is expected to increase as much a 3% next season, according to Terios.
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