ADMIS News
Ag Market View for May 20.25
May 20, 2025
COTTON
The recent rally in May Cotton may have sparked some profit taking as well as price fixing on the part of growers. US export prospects have improved with the weaker dollar, and the weekly export sales reports have come in strong the past few weeks. Moisture deficits in south Texas could slow their planting pace. West Texas is dry as well, but there is still some time for an improvement. However, the 6-10 and 8-14 day forecasts show below normal chances for rain in that region. The contract low could be solid, but it may take time and a significant worsening in the weather outlook to turn the market around.
SUGAR
Emerging concerns about dry conditions in Brazil, which come on top of reduced expectations for India’s production are lending support to the sugar prices. Recent upside action in gasoline and crude oil also provide support, as that makes ethanol a more viable options. The Brazilian Minister of Mines and Energy yesterday touted test results using a 30% ethanol mix in gasoline, leading some to conclude that a mandate requiring such was imminent. The current mix is 27%. The recent UNICA report showed Brazilian Center-South year to date ethanol production was up 3.2% from a year ago, despite a 5.0% decline in cane crush. Sugar product was down 5.6%. The stronger Brazilian real also lowers the incentive for cane crushers to produce sugar for export.
COFFEE
A slightly wetter trend has emerged in Brazil, which may be enough to ease the worst fears for the upcoming crop. Vietnam’s harvest should have wrapped up last month, and there are expectations that their product will be hitting the market soon and help ease tight robusta supplies, which could loosen up arabica supply as well. The nearby real broke out above its February high yesterday and traded to its highest level since November. A strong currency reduces the pressure on Brazilian growers to market their coffee for export. World Weather Service noted that Brazilian coffee areas saw some increase in rain coverage and intensity during the last week but that there is still need for more. Showers and thunderstorms will continue periodically through the next ten days to two weeks, but the rainfall will be less intensive than normal, but it may reduce stress. ICE certified arabica stocks fell 6,095 bags on yesterday to 790,641, their lowest since March 5.
COCOA
May Cocoa appears to have lost its downside momentum, and it has managed to avoid falling below the 200-day moving average for the past two weeks. Generally favorable weather in West Africa has pressured the market recently, but excessive heat could keep evaporation levels high. Ivory Coast farmers interviewed by Reuters said moisture levels last week were “sufficient” to support the development of the mid-crop, despite below-average rainfall in most growing regions. World Weather Service said rain during the next week will be lighter and more sporadic. The overnight maps showed little or no rain fell in Ivory Coast or Ghana for the last 24 hours. Some increase in rain coverage and amounts is possible next week. ICE certified cocoa stocks increased 59,242 bags yesterday to 1.737 million, their highest since November 5. Stocks are up 303,986 bags in the last eight sessions, but May Cocoa prices have not collapsed. The ICCO forecast for a 142,000-bag global surplus for 2024/25 was released more than two weeks ago.
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