COCOA
December Cocoa is chopping around inside Friday’s range this morning, drawing support on concerns that recent heavy rains in Ivory Coast have slowed the harvest there. Last week, heavy rains damaged roads, which slowed the delivery of beans to port, slowed harvest and hampered the drying of beans. Wet weather can also cause disease problems. Port arrivals picked up substantially last week after a slow start to the season. Arrivals reached 87,000 metric tons, up from 13,000 the previous week and 64,000 for the same week a year ago. Cumulative arrivals since the season began on October 1 have reached 100,000 tons, down from 115,000 a year ago. Showers and thunderstorms from Ivory Coast to Cameroon and Nigeria over the weekend added to already wet conditions. Some drying would be welcome. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 2,307 contracts of cocoa for the week ending October 8, reducing their net long to 33,273. This is far from the record net long of 79,541 from a year ago.
COFFEE
Brazilian weather conditions have improved with the arrival of rainfall last week, with more due to arrive this week, but the market is finding support today from concerns over Vietnam’s robusta crop. Traders and analysts interviewed by Reuters expect that nation’s output for the 2025/26 season, which began this month, to fall anywhere from 5% to 10% from last year due to the drought earlier this year. European-based traders have been expecting a 3.4% decline. Vietnam is the world largest producer of robusta coffee and the second largest producer of coffee overall. They represent about 40% of global robusta production. Most of Minas Gerais received decent rainfall over the weekend, with some areas receiving as much at 51 mm. World Weather Service reports that sufficient rain fell over the weekend and during last week to support flowering and pollination. This trend is expected to continue in the next couple of weeks. Vietnam, Indonesia, southern India, Africa and Central America are all expected to receive significant rainfall during the coming week, whit should be sufficient to maintain a mostly good environment for cherry development for upcoming crops. Friday’s Commitments of Traders.
COTTON
December Cotton was lower overnight on follow-through from Friday’s bearish reaction to the USDA report and disappointment over from the lack of detail on China’s fiscal stimulus plans. The Chinese finance minister held a press conference over the weekend but gave no indication of the amount of stimulus. China has been one of the largest buyers of US cotton in recent years, but their strong crop this year coupled with their sluggish economy has lowered US export prospects. The USDA report was bearish against expectations, with US exports lowered more than production, pulling ending stocks higher instead of slightly lower as expected. World production was revised higher due to increases for China and Brazil, but world ending stocks still declined. US cotton areas are expected to see mostly dry conditions this week, favoring crop maturation and some harvesting.
The USDA report put US 2024/25 cotton production at 14.20 million bales, down from 14.51 million last month and slightly below the average expectation of 14.27 million. Average yield was lowered to 789 pounds/acre from 807 last month in the wake of damage from Hurricane Helene. US exports were lowered to 11.50 million bales from 11.80 million last month and below average expectations of 11.65 million. US ending stocks were increased to 4.10 million bales from 4.00 million last month versus 3.98 million expected. This puts the US stocks/use ratio at 30.8%, up from 29.2% last month but down from 32.4% in the August report. This is up from 23.2% last year. World production was revised higher to 116.64 million bales from 116.42 million last month versus expectations for a decline to 116.16 million, and world ending stocks were reduced to 76.33 million bales from 76.49 million last month and 76.34 million expected. China’s production was revised to 28.20 million bales from 27.80 million last month, and their imports were lowered to 9 million from 9.5 million last month. Brazil’s output was revised up to 28.20 million from 27.80 million last month.
SUGAR
Center-south Brazil receive widespread rainfall over the weekend, improving prospects for the cane crop, but it may be too late to help 2024/25 production. Friday’s bi-monthly UNICA report on Brazil Center-South sugar production showed production for the second half of September at 2.892 million metric tons, down 16.2% from the same period last year. This was a bigger drop than a pre-report survey calling for a 15.3% reduction, and the market responded positively to the report. There was movement towards a larger percent of cane being used for ethanol production at the expense of sugar, but ethanol production declined as well, owing to the smaller crush. In the USDA supply/demand report on Friday, US 2024/25 sugar production was projected at 9.495 million short tons, up from 9.474 million estimated in September and a new record. However, this estimate did not take into account the damage from Hurricanes Milton or Helene. USDA did mention that cane processors in Louisiana expects lower production due to delays from Hurricane Francine. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 11,252 contracts of sugar for the week ending October 8, reducing their net long to 128,764. This is up from a net short of 27,000 in late August but well below the record 286,000 from 2016, so it is not a particularly burdensome level.
The UNICA report showed Brazil center-south sugar production for the second half of September at 2.829 million metric tons, down 16.2% from the 3.376 million for the same period last year. Cumulative production for 2024/25 has reached 33.154 million tons. This is up 1.5% from the same period a year ago, but the increase over continues to narrow as the season progresses.
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