COFFEE
March Coffee is consolidating last week’s rally to all-time highs, but the trade may be reassessing the worst fears about the upcoming Brazilian crop. Last week a major trading house lowered its forecast for Brazilian 2025 production sharply, but others have not followed suit. The extreme heat and extended drought last year has raised concerns that Brazil’s crop will struggle to have a strong year crop despite the arrival of abundant rain over the past month and a half. World Weather Service said yesterday that Brazil has experienced some “very fine” weather since the end of October, with rain falling routinely and sufficiently to support flowering, cherry setting and aggressive development. Temperatures have been seasonable as well. They said these conditions will continue for the next two weeks resulting in a mighty fine cherry development environment. This runs in the face of talk that the rains are too late to help. Brazil’s 2024/25 sales have reached 79% of the expected output versus 69% at this point last year, which suggests to some that farmers may not be in a hurry to sell.
SUGAR
Last week’s surprisingly high Brazilian production data for the second half of November has instigated a move in March Sugar to its lowest level since September and sent it down to the 200-day moving average for the first time since September 16. Still, global supplies are believed to be tight enough that any threat to production in Brazil, India or Thailand could spark a rally. Despite the stronger than expected performance in the second half of November, Brazil’s drought and extreme heat this year is weighing on the their current crop production and leave the 2025 crop in question. Recent rains have improved the outlook for next year, but there was significant damage done to cane fields by the drought and by the wildfires in September.
COCOA
March Cocoa reached a new contract high yesterday, and it appears ready to test that level again today. Ivory Coast Farmers interviewed by Reuters said that they were concerned about low rainfall and high heat. West Africa is in its dry season, but that has not prevented the market from worrying about the possibility that this year’s crop will come up short of what is needed to alleviate three straight years of global supply deficits. The Harmattan winds from the Sahara have arrived,, which can dry soils and harm small pods that will be harvested in February and March. The strength of the wind varied between strong and mild last week. Ivory Coast port arrivals are running well ahead of last year, but they have fallen behind the five-year average. World Weather Service said satellite and surface weather observations from West Africa suggested only a few showers producing light rain occurred in southern Ghana and southern Ivory Coast over the weekend. Very little change is expected through the next week to ten days. Showers will continue to pop up in coastal areas from Ivory Coast through Ghana to parts of Nigeria and Cameroon, but most interior crop areas will remain dry and warm. ICE exchange stocks fell another 13,913 bags on Friday to 1.417 million, which is the lowest since December 2003.
COTTON
The cotton market continues to see pressure from a dismal demand outlook. US export sales for the 2024 are the lowest since 2015, and the pace as a percent of the USDA forecast is behind average. Unless this changes, USDA may lower its export forecast in future supply/demand updates, which would increase ending stocks. US stocks are towards the middle of the historic range and are not particularly burdensome, but the slow export pace leaves little reason for the bulls to get excited. The dollar holding in the upper end of a two-year range does not help either. March Cotton fell to its lowest level since November 20 yesterday and was slightly lower overnight, leaving the November 19 low in sight.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2025 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
Latest News & Market Commentary
ADM & Industry News
Happy Holidays From ADM Investor Services!
December 18, 2024
The Ghost in the Machine Q4 2024
November 15, 2024