Weather Mix Supports Cocoa Crop

COCOA

May Cocoa was slightly higher overnight, but it is still consolidating inside the month’s rains. Ivory Coast farmers reported a good mix of rain and sunshine last week, which is conducive to a strong midcrop. World Weather Service expects West Africa’s weather to be favorably mixed over the next ten days, with welcome rain in Ivory Coast, Ghana and a few areas east to southern Nigeria. Portions of Ghana and Cameroon saw light to moderate rain over the past 24 hours. Consultants TRS by Expana have increased their 2024/25 surplus forecast by 32,000 metric tons to 77,000, due to an expected drop in the cocoa grind. The recent ICCO report put the surplus at 142,000 tons due to a 351,000-ton increase production and a 235,000-ton drop in grind. ICE certified cocoa stocks increased 19,832 bags yesterday to 1.551 million, their highest since December 2. Stocks are up 116,000 in the last three sessions.

COTTON

May Cotton is higher this morning and looks poised to test Monday’s high. The market made it through the USDA report supply/demand report yesterday relatively unscathed. The report may have been a bearish against expectations, but at this point in the season, the market could also be looking ahead to lower US plantings expected for 2025/26 and the current dry conditions in Texas. In the USDA report yesterday, US numbers were left unchanged, and world ending stocks were lowered by 80,000 bales versus expectations calling for a decline of 810,000. China’s 2024/25 production was increased by 750,000 bales after being increased by 1 million in the February update. The US dollar fell to its lowest level since November yesterday, which helps with the US export outlook. US cotton areas under drought increased to 38% last week from 28% the previous week.

COFFEE

May Coffee was moderately lower overnight with a slight improvement in Brazilian weather expected. World Weather Service said yesterday that coffee areas of Brazil will begin getting rain early this week in southern Sul de Minas and northeastern Sao Paulo. Relief from the dry weather will come gradually, but frequent showers and thunderstorms are likely. Any light rain that falls periodically would be welcome and partially beneficial for crops, though a more generalized soaking of rain would still be best.  Minas Gerais saw no rain over the past 18 hours. At the US National Coffee Association annual meetings in Houston last week, global coffee traders and roasters said they had slashed their purchases to minimal levels as retailers were reluctant to commit to high prices. ICE certified arabica stocks increased by 3,626 bags yesterday to 803,032.

SUGAR

May Sugar could test resistance at the 200-day moving average today. Brazil rain chances have improved over the past week, but the prices had not really gained much on concerns over dry conditions. The Unica report on Brazil Center-South production for the second half of February is due to be released this week. The last report showed first-half February production at 7,000 metric tons, down 73.8% from a year prior. Cumulative production for the April-March marketing year had reached 39.812 million tons, down 5.6% from last year at this time. Production tends to bottom out this time of year and starts to increase in March/April as the new season starts up. There had been some concern that harvest and crushing activity for 2025/26 crop would get off to a slow start, but there were reports yesterday that two mills had started harvesting early. In the USDA supply/demand report yesterday, US 2024/25 production was increased to 9.408 million short tons, up from 9.370 million previously, an increase of 38,000. Beet sugar production increased 36,000 tons. Imports from Mexico were lowered by 124,000 tons. Total usage dropped 35,000 tons. Industry official told Reuters that Indian mills have contracts to export 600,000 metric tons of sugar in the 2024/25 marketing year ending in September but that they are reluctant to sign further export deals as local prices have increased. However, the managing director of the National Federation of Cooperative Sugar Factories said that despite the current slowdown, mills will be able to export the entire quota of 1 million tons.

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