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March Sugar Is Lower Overnight


March sugar was lower overnight on follow-through selling from last week after the market put in a 4-1/2 week high on Wednesday. India’s Food Secretary said last week that his country is not likely to face any shortages of sugar in their domestic market, and this was views as increasing the chance that India would resume sugar exports later in the marketing year. The market had priced in expectations that the export ban would last the entire season. This statement offset support from recent strength in energy prices and in the Brazilian real. Brazilian sugar production remains well ahead of last year’s pace. The Unica Center-South supply report is expected to be released late this week, and it could provide an indication whether the recent rally in energy prices has encouraged mills to shift their cane crushing from sugar production to ethanol.

sugar cane


December cotton has fallen to its lowest level since July 17, as the market puts aside the tight US supply and focuses on a more ample global supply. This negative attitude has been fed by a resumption in the downtrend in equity markets, which bodes poorly for cotton demand. Global stock markets were down overnight as concerns mounted over the war in the Middle East. Traders are also concerned about Chinese demand, and they will be watching economic data closely. The poor condition of the US crop suggests further reductions in US production and ending stocks forecasts are possible in upcoming USDA supply/demand reports, but Brazilian exports could fill the gap in the global market, especially if demand stays stagnant. US export sales are off to their slowest start in seven years, which this is not surprising given the smaller crop and the relatively strong dollar.


December cocoa overcame a disappointing third quarter North American grindings report on Thursday with a sharp rally on Friday and a gap higher open today. This has put the contact high from mid-September in the market’s sights. Asian and European third-quarter grindings data were also below year ago levels, but they were higher than expected, and this has eased concerns that high prices are cutting into demand. West Africa and southeast Asia are expected to see drier than normal conditions due to El Nino, which has been forecast to continue into the second quarter of 2024. This could have a negative impact on cocoa production in Ivory Coast, Ghana, Nigeria, and Indonesia, which together accounted for 68% of global production in the 2022/23 season. Mild recoveries in the euro and British pound provide additional support on ideas it makes it cheaper for European grinders to buy cocoa.


December coffee was close to unchanged overnight after last week’s move to its highest level since August 3. The market has gained 16% in just nine sessions, which has left it in an overbought condition, but there has been no technical indicator of a top. ICE exchange coffee stocks fell 190 bags on Friday and reached an 11-month low. The drawdown in stocks has underpinned prices, as it suggests that demand has been strong enough to overcome increased Brazilian supply from their 2023/24 crop. A rebound in the Brazilian currency has provided additional support on ideas it will ease pressure on Brazilian growers to market their supply to foreign customers. There have some shipping delays due to heavy congestion at major Brazilian ports that have reduced the flow of coffee.


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