Cocoa Near Unch After Steep Selloff

COCOA

December Cocoa was near unchanged overnight after yesterday’s steep selloff. Ivory Coast raised the farmgate priced paid to cocoa farmers by 20% to 1,800 CFA francs ($3.09) per kg for the main crop of the new crop season (equal to $3,090 per metric ton). In early September Ghana raised its farmgate priced by nearly 45% to 48,000 cedis ($3,043.75) per metric ton. It is hoped that this will provide enough incentive for farmers to bring their beans to market. Most of Ivory Coast’s main cocoa growing regions saw below-average rainfall last week, but farmers said it was sufficient to boost development of the October-March main crop. Some areas had above average rains last week, and they need plenty of sunshine and average rainfall. The 2024/25 main crop officially begins today. Conditions in West Africa this summer have been generally conducive to a strong crop, but things have been a bit dry up until the past week or so. The trade will be watching weekly arrivals closely.

COFFEE

December Coffee was a bit lower overnight but inside yesterday’s range. World Weather Service says one more week of restricted precipitation and warm temperatures is expected until the potential for greater rain begins to increase. The precipitation late next week and out toward mid-October may be enough to boost soil moisture and induce some flowering, but a close watching on the weather is warranted. They also said a general soaking rain is unlikely, at least initially. Brazil needs rains not only to induce flowering for the 2025 crop, but also reduce stress on the trees. Costa Rica’s coffee shipments were almost 25% higher than the same period a year ago, according to ICAFE, the nation’s coffee institute. Farmers sent 111,662 bag in August, around 22,144 more than a year ago. Dockworkers on the East Coast have gone out on strike, halting the flow of about half of the nation’s ocean shipping. This could raise concerns about the availability of coffee in this country. ICE arabica stocks fell 4,184 bags on yesterday to 813,999, their lowest since September 3 and down 33,874 on the month.

COTTON

December Cotton was lower overnight but inside yesterday’s range despite a sharp drop in crop conditions this past week. The weekly Crop Progress report released yesterday afternoon showed 31% of the US cotton crop was rated good/excellent as of September 29, down from 37% the previous week and only slightly ahead of 30% a year ago. The five-year average for this date is 40%. Georgia saw a big decline in the wake of Hurricane Helene, falling to 33% G/E from 59% last week and 56% a year ago. The five-year average is 57%. Georgia is the  US second largest producer after Texas. Sixth-larger producer North Carolina also declined, to 50% G/E from 76% the previous week versus and an average of 47%. Texas was 20% G/E, down from 22% last week but up from 11% a year ago. The five-year average is 27%. Arkansas declined slightly to 61% G/E from 68% last week and 78% average, and Mississippi was 43% G/E, from 48% last week and 62% average. 72% of the US crop had bolls open as of Sunday, and Georgia was 77% open. 20% of the US crop had been harvested; Georgia was 6% harvested, Texas 31%, Arkansas 21%, and Mississippi 27%. A tropical disturbance in the Gulf of Mexico late this week will be worth watching, as it could bring more rain to the southeast next week. The late season weather seems to be causing a bit of a hiccough for US production prospected. As of the September WASDE report, US 2024/25 production was forecast at 14.51 million bales,  up from 12.07 million last year and 14.47 million in 2022/23. Ending stocks were projected at 4 million bales, up from 3.15 million last year but the second lowest since 202/21. Industry group Cotton Australia is forecasting the nation’s 2024/25 cotton crop at 4.4 million bales (1 million metric tons) versus 1.1 million tons in 2023/24. The Australian agriculture ministry has put 2024/25 production at just over 1 million tons. USDA has their 2024/25 production at 5.0 million bales (1.1 million tons).

SUGAR

March Sugar was near unchanged overnight as it consolidated the selloff of the previous three sessions. World Weather Service says the next chance for significant rain for Center-South Brazil is next week but that a good, soaking rain could prove elusive. The Brazilian forecaster Climatempo says a cold front is expected to form on October 7 that would bring rains that would be beneficial to next year’s crop. Analyst Green Pool cut its Brazil sugar forecast for this season to 39.1 million tons due to the dry conditions there, another in a line of revisions lower. Deliveries on the expiring October contract were around 33,500 lots, approximately 1.7 million tons. Wilmar International was said to be the sole receiver and Sucden the largest deliverer.

Interested in more futures markets?  Explore our Market Dashboards here.