Brazil Oct Exports Highest on Record

COFFEE

March Coffee is higher this morning and has managed to take out Thursday’s three-week high. Cecafe reported that Brazil exported 4.57 million bags of green coffee in October, the highest for any month on record and up 10.5% from a year prior. Arabica exports were up 7% to 3.7 million bags, and robusta shipments were up 27% to 871,000. Seasonal rains have finally reached Brazilian growing areas. They were late in arriving and started off slow, but they have since picked up. The rains have soil moisture, but now there are concerns that topsoil is saturated in many areas with more is expected over the next week or two. Coffee trees needed rain after the extended drought. There has been no report of damage from the rains. There are some concerns that rains linked to Tropical Storm Yinxing could slow the robusta harvest progress in Vietnam. Tropical Storm Yinxing was expected to make landfall in central Vietnam overnight. Central Vietnam and a few neighboring locations could receive 0.50 to 3.00 inches of rain with locally greater amounts. Robusta prices are also higher this morning.

COCOA

March Cocoa broke above its October high this morning and traded to its highest level since June 17. The market may be finding support on ideas that excessive rain earlier this fall has caused disease problems with brown rot, as reported by some dealers last week. The market may also be buoyed by stronger demand expectations with the stock market rally in the wake of the US election. In general, grindings data has been stronger than expected this year, perhaps because processers were able to draw on cocoa purchased prior to the unprecedented rally last spring, but it is also possible that demand has been resilient in the face high prices. Ivory Coast farmers interviewed by Reuters said light rains mixed with sunny spells last week helped strengthen the main crop, which is expected to be abundant until at least late December. They commented that rains have been below average for the last several weeks and that cocoa trees are carrying many big pods at the moment. They reported no disease on the trees, and they also said harvesting in January would be better than last year. The dry season tends to begin in mid-November and last until March. Ivory Coast cocoa arrivals have reached 455,000 metric tons so far for 2024/25, up from 290,000 for the same period a year ago and the highest for this point in the season since 2020/21. Ghana raised its official farmgate price another 3% this week after reports last week that farmers had been hoarding their beans in anticipation of a price increase.

SUGAR

March Sugar is near the bottom of yesterday’s big range down this morning. The UNICA bimonthly report on Brazilian Center-South sugar production for the second half of October is due out today. A survey by S&P Global put expectations at 1.69 million metric tons, which would be down 28.3% from the same period last year. This would bring the year-to-date total at roughly 0.01% above last year. As of October 16, cumulative production was 1.93% above a year ago. The trade may be watching ethanol production as well, which as of October 16 was running 7.93% ahead of a year ago. So far this year, 48.7% of cane the cane crop had gone to sugar production, with 51.3% going to sugar. The previous mix was 50.6% ethanol to 49.5% sugar. Yesterday the market fell to its lowest level since September 18 on weakness in the Brazilian real and the rainy pattern in Brazil that has improved the outlook for 2025 production. More heavy rain is expected over the next two weeks, which could bring the 2024 harvest to a halt and result in tight near-term supplies early next year.

COTTON

March Cotton is near unchanged this morning after a steep selloff yesterday. The rally in the dollar is viewed as negative for cotton, as it makes US exports less competitive on the world market. Lower crude oil prices are also viewed as negative for cotton prices, as they make man-made fibers cheaper to produce. The market may have also seen some follow through selling from Friday’s USDA supply/demand report, which lowered the US export forecast by 200,000 bales and raised ending stocks by the same amount. Cumulative US export sales for 2024/25 are the lowest since 2016/17, although they have improved over the past few weeks. This afternoon’s Crop Progress report may show a slowdown in the Texas harvest after the rains last week. Last week’s reports showed they were 58% harvested, with the US 63% complete and Georgia 52%.

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