Dec Cocoa Slightly Higher Overnight

COCOA

December Cocoa was slightly higher overnight, following a three-session selloff from a two week rally. Ivory Coast port arrivals for last week were estimated at 93,000 metric tons, up from 56,000 for the same week last year and the strongest since January 2023. Cumulative arrivals for the 2024/25 marketing year that began on October 1 have reached 193,000 tons, up from 170,000 a year ago. This is the first time in a year that arrivals are running ahead of a year-ago. World Weather Service reports that scattered showers and thunderstorms continued to impact cocoa areas from Ivory Coast to Nigeria and Cameroon Friday through Sunday. Most of the precipitation was light to moderate. Ivory Coast was driest, with some crop areas experiencing net drying conditions, which may be good for harvest and crop conditions after the recent heavy rains. Periodic shower and thunderstorm activity is expected over next 7-10 days, which should be sufficient to maintain favorable crop development. Seasonal rains should begin to ease in November, but the remainder of this month and the first days of November are expected maintain periodic rainfall. Last week’s third-quarter grind data was mixed, with lower European grind more than offset by increases in North America and Asia. However. Ivory Coast’s grind fell to 61,551 metric tons in August, down 11.1% from the same period last year, according to the exporter association GEPEX. Total grind since the start of the 2023/24 marketing year had reached 587,531 tons, down 13% from the same period last year. ICE cocoa stocks have declined every day but three since mid-August and are down to 1.9 million bags from 2.7 million on August 15. There have been no bags pending grading since October 10. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 3,156 contracts of cocoa for the week ending October 15, increasing their net long to 36,428.

COFFEE

December Coffee gapped lower overnight and fell to its lowest level since October 10. The market may be reacting to the rains in Brazil’s coffee growing areas over the weekend. World Weather Service said moderate to heavy amounts fell Friday through Sunday afternoon. Some of the heaviest were centered on northern Sao Paulo to southern Minas Gerais, which saw 18 to 54 millimeters and some local amounts of up to 105 millimeters. Scattered showers and thunderstorms are expected through Wednesday, with much lighter rains than the weekend, but another boost is expected to advance from south to north Thursday through Sunday. Periodic rain and thunderstorms are expected to continue next week. Agronomists have been warning that the rains would be too late to save the crop, but the wetter trend is weighing on prices today. ICE arabica stocks increased by 12,190 bags on Friday to 849,709, their largest since September 17. Stocks were up 34,622 last week. There was also a 45,928-bag increase in stocks waiting for grading to 89,349. This was the largest daily increase since August 28 and the largest pending grading since August 29. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 3,833 contracts of coffee for the week ending October 15, increasing their net long to 56,201.

COTTON

December Cotton was higher overnight building on Thursday’s bounce off a three week low. The US export sales report on Friday showed the strongest week since August 29. China cut its benchmark lending rates today by 25 basis points to 3.10%. The cut was expected, but it also showed some teeth in the long-awaited stimulus measures. A stronger Chinese economy would help cotton demand. Warm and dry conditions across the US Delta and southeastern states should will favor crop maturation and harvesting. West Texas received some rain over the weekend, and more is expected early this week, but it is not expected to have a big impact on crops. Xinjiang, China continues to experience good harvest weather. Australia’s dryland crop areas of New South Wales and Queensland need rain, as soils there are too dry for planting. Argentina need more rain. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 740 contracts of cotton for the week ending October 15, increasing their net short to 12,664.

The export sales report on Friday showed net cotton sales for the week ending October 10 at 159,769 bales, all for the 2024/25 marketing year. This was up from 89,608 the previous week and the highest since August 29.  Shipments totaled 57,834 bales, which was the lowest since August 1. Cumulative sales for 2024/25 have reached 5.304 million bales, down from 5.895 million at this time last year and below the five-year average of 7.974 million. Sales have reached 49% of the USDA forecast versus a five-year average of 61% for this point in the marketing year. The largest buyer was Vietnam at 47,692 bales, followed by Pakistan at 45,674, Turkey at 17,276 and Nicaragua at 12,647. China was the sixth largest at 9,301 bales. Pakistan has the most commitments for 2024/25 at 1.123 million bales, followed by Vietnam at 708,300, Mexico at 551,700, Turkey at 500,400, and China at 476,300. Only 353 bales were shipped to China last week after none were shipped the previous week.

SUGAR

March Sugar was near unchanged overnight and near the middle of last week’s range. Brazil sugar areas are finally starting to see decent rain, which is welcome by growers, even if it may be too late to have much impact on this year’s crop. World Weather Service reports that moderate to heavy rain fell Friday through Sunday across center-south Brazil, with some of the heaviest amounts centered on northern Sao Paulo to southern Minas Gerais, which saw 18 to 54 millimeters and local amounts of up to 105 millimeters. Scattered showers and thunderstorms are expected through Wednesday, and then another round of heavier rainfall is expected Thursday through Sunday. Czarnikow said on Friday that the declining premium of white sugar over raw prices and declining wait times for vessels to load sugar at Brazilian ports (the lowest in two years) are indicators of weakening demand. They also said refiners in the Middle East are struggling with increased competition from European sugar producers since the EU reported a large beet crop this year.  Friday’s Commitments of Traders Report showed managed money traders were net buyers of 1,206 contracts of sugar for the week ending October 15, increasing their net long to 129,970.

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