Waiting on Hurricane Helene Damage Data

COCOA

December Cocoa was lower overnight and fell to the trendline it broke out above last week. The 2024/25 marketing year for the Ivory Coast crop officially begins tomorrow. The weather and reports from growers have been generally positive, but the question is whether production will be strong enough to alleviate the tight global supply. Farmers quoted last week said there were enough pods on trees at various stages of development to produce two crops per month from October through December. Ivory Coast port arrivals totaled 17,000 metric tons last week, down from 21,000 the previous week but the third straight week of 17,000 or more. Growers are hoping for an increase in the official farmgate price this week that would be something akin to Ghana’s 45% increase earlier this summer. World Weather Service said periodic showers and thunderstorms were scattered through cocoa production areas from Ivory Coast through Ghana and Benin to Nigeria and Cameroon Friday through Sunday afternoon. Moisture totals were mostly light to moderate.  They look for rain to continue to fall periodically throughout the next week to 10 days, which will be good for future crop development. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 3,205 contracts of cocoa for the week ending September 24, increasing their net long to 32,552.

COFFEE

December Coffee was near unchanged overnight and not too far from last week’s contract highs. Brazil saw some rain over the weekend but not enough to counter evaporation due to very warm temperatures. A little more rain is possible late Wednesday into early Friday. The trees need rain to induce flowering for the 2025 crop, and the trees are stressed from the lack of rain this year. Indonesia received decent rain and is expected to see more,  which should benefit their crop. A potential port strike on the East Coast could hurt the flow of containers with coffee. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 528 contracts of coffee for the week ending September 24, reducing their net long to 60,925. ICE arabica stocks fell another 2,037 bags on Friday to 8181,183, the lowest since September 3. Stocks were down 20,353 from the previous week. However, the number pending review increased by 40,850 bags to 51,731, which was the highest since September 10.

COTTON

December Cotton was slightly higher overnight but was inside Friday’s range. Traders are waiting to see how much Hurricane Helene has damaged the crops in the southeastern US. The storm’s shift eastward after landfall may have spared southwestern Georgia cotton fields some of the worst damage. The Delta received rainfall over the weekend, which was not welcome either. Dry conditions in Texas are beneficial for harvest. Australia could use some rain for planting in the next couple of weeks. South America could too. Demand is still a major concern for the market. Last week’s export sales report showed net sales of 87,784 bales for the week ending September 19, down from 117,361 the previous week and the lowest since February. Shipments at 79,504 bales were the lowest since August 1. China appears to have a strong crop, which will reduce their import needs. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 12,968 contracts of cotton for the week ending September 24, reducing their net short to 17,549.

SUGAR

March Sugar extended Friday’s selloff overnight but was back near unchanged this morning. Brazil received some rains over the weekend, but not enough in the Center South region to improve the dry conditions there. The lack of rain this year could bring an early end to the 2024/25 harvest and delay the start for 2025/26. The UNICA report on Center-South Brazil sugar production for the first half of September on Friday was 3.124 million metric tons, down from 3.126 million for the same period last year and down from 3.258 million for the second half of July. This was bullish against trade expectations, but the market only saw a brief rally off the news. BMI said last week that Brazil will produce 2 million tons less sugar in the 2024/25 season due to the drought and wildfires. IKAR consultancy said that Russia will produce 10% less sugar next season due to adverse weather but will export at least 600,000 tons after an export ban was lifted. Friday’s Commitments of Traders Report showed managed money traders were net buyers of 64,251 contracts of sugar for the week ending September 24, increasing their net long to 119,772.

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