ADMIS News
Ag Market View for May 20.25
May 20, 2025
COFFEE
July Coffee was slightly lower overnight following a five-day recovery rally. The market found support last week after a technical selloff, and it is in the process of determining whether the move to record high prices in February was enough to stop demand. One of the factors supporting the market has been low expectations for the upcoming Brazilian crop, but the Brazilian consultancy Safras & Mercado yesterday announced that it had revised its forecasts higher, crediting better than expected weather in February and March. The group reported that they are expecting Brazil’s 2025/26 arabica production to be close to 40 million bags versus the 38.35 million they forecast in December. They are also looking for robusta production to come in at to 25-26 million bags versus 24.1 million in December. World Weather Service expects coffee areas in Brazil to see two waves of precipitation by Sunday. They anticipate the crop to benefit in the short term but stress that more will be needed. Coffee areas from western Venezuela into Colombia and Peru will continue to see regular rounds of rain through the next week and mostly favorable conditions. ICE certified stocks increased 3,417 bags yesterday to 790,337. Stocks pending review increased 6,347 yesterday to 92,095, their highest since February 26.
COCOA
July Cocoa was lower overnight with demand uncertainty pushing the market back towards last week’s four-month low. First-quarter grind data for Europe, Asia, and North America are due out tomorrow, and this has traders in a defensive mode. The trade is apparently looking for a grind to be down 5%-7% from year ago levels. The may be based on the fact that Barry Callebaut, one of the world’s largest cocoa processors, reported a 4.8% decline in sales for the first half of its fiscal year. Brazil’s Q1 grindings totaled 52,135 tons, -13% from in the same period in 2024, which was attributed to slower demand and low supplies. World Weather Service says West Africa could see an “erratic” rainfall pattern over the next week. This helps the crop somewhat, but more rain is needed. ICE certified stocks fell 888 bags yesterday to 1.883 million. This was the first decline in seven sessions.
COTTON
July Cotton was near unchanged overnight after a modest rally yesterday. Traders are looking to tomorrow’s export sales report for an initial reaction to the tariff news a couple of weeks ago. The market has seen a significant bounce after its steep selloff in the wake of the initial tariff announcements, but the push/pull of the trade war keeps the demand outlook uncertain. The steep drop in trade volume and open interest since the low suggests some sort of exhaustion. News overnight that China is at least considering trade negotiations with US may provide some optimism for the market. Last week’s export sales report showed net sales 133,966 bales (current and new crops combined) for the week ending April 3. This was down from the previous week and the second lowest since October. Cumulative sales had reached 103% of the USDA forecast, which was in line with the five-year average for this point in the marketing year. Vietnam had the most commitments for the 2024/25 marketing year at 2.339 million bales, followed by Pakistan at 2.208 million, Turkey at 1.523 million, and China at 706,000. The Indian government said yesterday that the nation is likely to see above-average monsoon rains for the second straight year in 2025. This is viewed as positive for crops, including cotton. The monsoon delivers nearly 70% of the rain needed to water crops and recharge reservoirs and aquifers. Above-average rainfall is very likely over most parts of the country, except for some areas over northwest India, northeast India, and southern Peninsular India, where below-average rainfall is likely, Ravichandran said. The main cotton growing areas are in the central and west central parts of the nation. About 14% is grown in the northwest.
SUGAR
July Sugar was under pressure the past couple of sessions after the UNICA report on Monday showed a significant increase in Brazilian Center-South sugar production for the second half of March. Overnight, one analyst said that sugar stocks in Brazil were about 70% lower in the first quarter compared with the historical average for the period, and that was behind the shift in cane allocation by mills towards producing more sugar early in the season. France’s farm ministry put 2025 sugar beet planted area at 391,000 hectares, down from 412,000 in 2024 and 2.9% below the five-year average. The Indian government’s forecast for an above-average monsoon this year could be beneficial for the nation’s sugar cane production. Above-average rainfall is expected over most of the country, except for some areas in northwest and northeast India and the southern peninsula, where below-average rainfall is likely. About 33% of India’s cane production comes from Uttar Pradesh, which is in the north central part of the nation but probably not northwest or northeast. Tamil Nadu is in the southern peninsula, and they produce around 12%. Maharashtra is in the east/central part of the nation, and they are responsible for around 29%.
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