India Sugar Exports Peaking?

SUGAR

May Sugar traded in the upper end of yesterday’s range overnight following yesterday’s move to the highest level since mid-December. There were reports yesterday that India has exported as much as 500,000 metric tons of sugar so far this season but that the pace is already slowing and that it may struggle to fulfill the million-ton limit for the 2024/25 marketing year. There have been reports of mill closures in northern India and poor harvest conditions. On analyst expects at most 700,000 tons will be exported by the endo of the marketing year in September. An analyst for a Thai sugar producer said yesterday that Thailand’s 2025/26 sugar cane production could reach 105 million metric tons, up from 92 million 2024/25 and the highest in seven years, as falling cassava prices have encouraged farmers to plant more cane. Sugar production could reached 11.5 million tons, up from 10.3-10.4 million this year. Commodity analysts Green Pool said last week that assuming close to normal rainfall and a small improvement in cane yields, Thailand’s 2025/26 sugar production could reach 13.2 million tons. Indonesia plans to import around 200,000 metric tons of raw sugar for the government’s food reserve. The government has estimated domestic white sugar output at 2.6 million tons this year with demand at 2.84 million. Yesterday’s bi-monthly UNICA report on Brazilian Center-South production showed cane crush and sugar production fell again in the second half of January, but that is not unusual this time of year. Cane crush for the period was down 66.3% from last year, and sugar production was down 73.8%. Ethanol production was up 28.5%, as ethanol’s share of crushing capacity increased to 76.2% from 64.6% a year ago. Cane crush and sugar production are basically over for the season, which ends on March 31. Cumulative crush is 4.9% behind a year ago, with sugar production down 5.5% and ethanol up 3.4%.

COCOA

May Cocoa is high this morning but inside yesterday’s range. The market broke below the 50-day moving average last week for the first time since October, but it is also chopping back and forth inside a consolidation range as it waits to see how the mid-crop develops this spring. Some rains have started to move into West Africa, which augurs the end of the dry season, but a consistent rainy pattern has yet to emerge. Growers have said the crop needs “two big rains” to ensure good pod development. World Weather Service expects showers on occasion through the next week from Ivory Coast to Ghana and Cameroon, with most of the resulting rain light to locally moderate.  ICE warehouse stocks increased by 1,841 bags yesterday to 1.389 million. Stocks are down 16,158 bags over the past five days. The first official ICCO data on the 2024/25 global supply/demand balance is due at the end of the month.

COTTON

May Cotton traded to its highest level since January 27 yesterday and then sold off overnight. The market’s failure to take out the mid-January highs disappointed would-be bulls. Crude oil was sharply lower overnight, which weighs on cotton prices, and yesterday’s hotter than expected CPI number raised concerns about inflation and lowered hopes for any Fed rate hike. President Trump’s announcement that retaliatory tariffs are coming today also raised concerns about export prospects going forward. The trade will be looking to the export sales report today to see if sales have continued their improved pace. Last week’s report showed net sales of 203,782 bales (current and next marketing year), and average sales for the previous four weeks was 205,500 bales, which was the largest since August 15. Cumulative sales had reached 86% of the USDA forecast for the marketing year versus a five-year average of 89% for that point in the season. Last week’s report also showed shipments at 221,058 bales, which was viewed as positive. Shipments have been above 220,000 in three of the past four weeks. World Weather Service said yesterday that cotton planting in Mato Grosso, Brazil was 86% complete versus 98% at this time last year.

COFFEE

May Coffee chopped back and forth inside Tuesday’s wide range overnight. The market sold off from an all-time high on Tuesday, ending a 12-13 day streak of consecutive highs. There has been some speculation that the selloff on Tuesday was the result of forced liquidation on the part of a large traders, particularly in the wake of higher margin requirements. The last COT report showed the managed money trader net long had reached 65,621 contracts versus a record 71,811 from last April, which left the market vulnerable to selloff.  World Weather Service said yesterday that the dry trend in Brazil would continue for the next week to ten days, which has the potential to add to crop concerns. Temperatures will also be trending warmer. Soil conditions are already drying out in Bahia, northeastern Minas Gerais and Espirito Santo. The dry weather, if it continues, could affect cherry development. ICE certified arabica stocks decreased by 15,334 bags yesterday to 841,795, their lowest since October 29.

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