Early India Monsoon Boosts Crops


September Cocoa has been in a sideway pattern for five sessions, and it was inside yesterday’s range overnight. Ivory Coast farmers interviewed by Reuters this week were saying more flowers are appearing on cocoa trees ahead of the October-March main crop than last year, thanks to favorable growing conditions. The region is in its rainy season, but rains last week were below average. The crop needs a mix of rain and sunshine. If rains are too heavy, flowers will fall from the trees. Some growers also expressed optimism that the mid-crop will finish strong. Ivory Coast cocoa arrivals were estimated at 19,000 metric tons for the week ending June 30, unchanged from a year ago and up from 15,000 the previous week. Cumulative arrivals since the marketing year began on October 1 have reached 1.596 million tons, down 28% from a year ago. Ivory Coast received 156.1 millimeters of rain in June, up from 70.5 in April and the strongest month since last April, when they received 220.1 mm. This year was comparable to 2022, when they received 155.6 mm for the month. After a brief rally yesterday, the euro is back down inside the recent trading range, which eliminates the so-called “advantage” European grinders had gained for buying cocoa.



September coffee tested the bottom end of its consolidation range yesterday but managed to stay above the 50-day moving average, and that could be an important support line today. Coffee growing regions in Brazil are seeing little threat of frost. The lowest the main arabica region of Minas Gerais is expected to see over the next five days is 57 degrees Fahrenheit. There was some frost reported in southern Parana over the weekend, but no damage to coffee trees has been reported. Dry weather continues in Brazil, which helps the Brazilian harvest proceed at a rapid pace. The dry conditions could leave growing areas more vulnerable to frost if the weather was to turn cold, and there are some concerns that the dryness earlier this year will eventually pull yields down. The steep decline in the Brazilian real puts pressure on exporters to sell. It fell to its lowest level since April 2023 yesterday and was down 7% on the month. ICE arabica stocks increase by 8,322 bags yesterday at 815.716. This was the first increase after three straight days of declines.



December cotton was only slightly higher overnight despite what appeared to be a bullish Crop Progress report yesterday afternoon. The decline in crop conditions was not a total surprise after the deteriorating soil moisture over the past couple of weeks. On the other hand, the market held up well in the wake of Friday’s bearish acreage report.

The Crop Progress report showed 50% of the US cotton crop was rated good/excellent as of June 30, down from 56% the previous week and up only slightly from 48% a year ago. Texas held steady at 44% good/excellent versus 43% last week, but Georgia fell to 49% G/E, down from 59% last week, Mississippi was 63% G/E, down from 72%, and North Carolina was 32% G/E, down from 40% last week and 66% two weeks ago. The crop was 97% planted versus 98% a year ago and 99% on average. 43% of the crop was squaring versus 38% a year ago and on average. 11% was setting boll versus 9% a year ago and on average.

The NWS forecast calls for rains of up to 1.5 inches across the many of the US cotton growing areas over the next five days. The 6-10 and 8-14 day forecasts call for above normal temperatures, but the trend is less extreme that it was yesterday, and the entire region is looking at above normal chances of rain.

India’s monsoon rains covered the entire country today, six days ahead of the usual time of arrival, according to the India Meteorological Department. This will allow growers to move ahead with planting cotton, among other crops. They are expected to receive above-average rainfall in July after 11% below normal in June, and this would be good for crop development.


Sugar crystals



India’s monsoon rains covered the entire country today, six days ahead of the usual time of arrival, and this will allow growers to proceed with planting sugarcane. They are expected to receive above-average rainfall in July after 11% below normal in June, and this would be good for crop development.

Deliveries against July NY Sugar were substantial at 21,277 contracts, the largest for a July contract since 2019, and nearly all of it is expected to come from Brazil. An article in Reuters pointed out that the fact that the largest receivers were Alvean and Raizen, who are sugar producers or are linked to producers, is being viewed as an indication of strong demand. Green Pool Commodities Specialists said that raw sugar from Center-South Brazil is currently quoted at a high premium to the futures, whereas it would normally be quoted at a discount at this time of year when harvest is in full swing, and this is also viewed as bullish by some.

Many areas in Central Brazil have not received rains for 60 days, which is raising concerns that the harvest could end early. Recent dry weather has kept harvest running strong, but this can ultimately lower yields. As of June 16, Center-South sugar production was running 14.4% ahead of last year, but traders are apprehensive about a slowdown.

India’s monsoon arriving earlier than normal boosts expectations for their cane crop.



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