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Sugar Supported By Port of Santos Delays


A record cane crop in Brazil helps offset lower production out of Asia, but delays at the Port of Santos have slowed the export pace and supported the sugar market. Heavy rains have slowed sugar loading on ships, and sugar is competing with a record soybean crop for space. A fire at Brazil’s Paranagua port has forced the shutdown of a berth that is used for loading grains and sugar. This adds to the logistics problems, where waiting times to load have surpassed 40 days. Paranagua is Brazil’s second-largest port; the main sugar port is in Santos. Brazilian crushers are planning to extend their season beyond the traditional end date in late November to handle their record cane crop. Crude oil and gasoline have not been able to sustain a rally since their September highs, which is negative for sugar as it reduces the incentive for mills to produce ethanol. The two-day selloff in the Brazilian real provides additional incentive for Brazilian mills to produce sugar for export. Indian government officials have left the door open for their nation to resume sugar exports this season, but they are not expected to do so until the second quarter of 2024.

shipping port


December cocoa extended its rally yesterday but closed lower after reaching a new 44-year high, and this may encourage some end-of-month profit taking today. There is a certain amount of anxiety over the Middle East war and its potential implications regarding demand, and there have also been intermittent concerns that high cocoa prices will discourage wholesale buying. A rebound in the Euro and British Pound this week does put European grinders in a better position to buy cocoa. Farmers surveyed by Bloomberg complained of Black Pod and other diseases in Ivory Coast and Ghana, a lack of fertilizer, too much rain. The latest weekly Ivory Coast port arrivals came in well below year-ago levels, and total arrivals since the marketing year began on October 1 are also well behind last year’s pace.


December coffee turned higher overnight on a slight improvement in risk attitudes. The market found technical support at a retracement of the October 10-25 rally. Above average rainfall last week over Brazil’s major Arabica growing regions should benefit their upcoming 2024/25 coffee production, and that has weighed on prices over the past few days. More rains are forecast, with light to moderate showers over the next five days that should improve soil moisture and help flowering and cherry growth. Brazil’s production increases are helping to offset supply issues in Colombia and Central America, and 2023/24 global Arabica production could see a significant increase from 2022/23. The Brazilian real fell sharply for the second straight day yesterday to a 1-1/2 week low, and this could increase pressure on Brazilian farmers be more aggressive marketing their remaining supply. Restaurant and retail shop consumption in developed economies could be diminished if the conflict in Middle East expands.


December cotton closed sharply lower on Monday and continued with minor losses overnight, and the market seems ready to test its three-month low at 81.50. Traders are balancing a poor US crop against expectations of ample supplies from Brazil, which is seeing record production. Temperatures in Texas and southwestern Oklahoma have dropped or are dropping below freezing yesterday and today, which will speed up defoliation, which aids harvesting. Dry weather this week in Texas will also help, and this could add to pressure on prices. Harvest conditions remain very good in China and mostly good in India. Rain this weekend in southeastern Queensland and northeastern New South Wales should help improve conditions for planting of dryland cotton in Australia. Dryness in Andhra Pradesh, India is cutting into production there.

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