Ivory Coast Arrivals Slowing

COCOA

March Cocoa was slightly lower overnight, as it continued to consolidate inside the December range. Ivory Coast cocoa arrivals for the week ending January 12 totaled 48,000 metric tons, down from 55,000 the previous week but up from 41,000 for the same period a year ago. Cumulative arrivals since the marketing year began on October 1 have reached 1.157 million tons, up 27% from 914,000 a year ago but down from 1.461 million for the same period in 2022/23. The trade is looking for a drop off in arrivals next month, as the dry weather of the past two months is expected to lower output. Reuters reported last week that while deliveries in Ghana had been running well above last season, dealers were saying they had begun to slow significantly. As of December 12, Ghana’s graded and sealed (G&S) cocoa purchases since the start of harvest on September 11 had reached 366,075 tons, up 57.7% from the same period last year, according to figures provided by the marketing agency COCOBOD. The group expects 2024/25 production to reach 650,000 tons. ICE certified stocks fell another 43,215 bags last week to 1.316 million, which is their lowest since December 2023. In June 2023 there were 5.54 million bags certified, which was close to a record high. Hershey has sought permission from the CFTC to purchase up to 90,000 tons of cocoa from ICE certified stocks, exceeding the typically allowed maximum amount. World Weather Service says West Africa rainfall will be limited to a few areas near to the coast, which is normal for this time of year. This will be good for maturation and harvesting. Seasonal rains should return in February. Harmattan wind will occur steadily over the next week to ten days, bringing warmer than normal  temperatures and drying conditions.

COFFEE 

March Coffee was higher overnight, trading to its highest level since December 26. A drier trend in key Brazil growing areas may be reawakening concerns about the 2025 arabica crop. World Weather Service said rain Friday through Sunday afternoon was a bit erratic, with some areas getting significant amounts while others saw only light amounts, resulting in some net drying. They added that periodic showers and thunderstorms will impact all coffee production areas at one time or another during the next week to ten days but that light and infrequent rain late this week and into early next week could spark some net drying in some areas.

COTTON

March Cotton traded in the lower end of Friday’s range overnight and was just barely holding Friday’s low this morning. The market saw heavy selling on Friday in the wake of the USDA monthly supply/demand report, which showed a significant revision higher in US production for 2024/25 and a jump in US ending stocks. US cotton production came in at 14.41 million bales, up from 14.26 million in last month’s update. Ahead of the report, the trade was looking for a decline from last month. Harvested area was lowered to 8.27 million acres from 8.63 million in December, but average yield was increased to 836 pounds per acre from 792 last month. US exports were lowered to 11.00 million bales from 11.30 million last month, and US ending stocks were increased to 4.80 million bales, up from 4.40 million last month and the highest since 2019/20. World production for 2024/25 came in at 119.45 million bales versus 117.39 million last month, the highest since 2017/18. World ending stocks came in at 77.91 million bales versus 76.02 million last month, the highest since 2019/20. China’s production was increased to 30.00 million bales versus 28.20 million last month. This was up from 27.35 million in 2023/24 but down from 30.75 million in 2022/23. Their ending stocks at 37.52 million bales were the highest since 44.13 million in 2016/27. Brazil and India’s numbers were left unchanged. Last week’s export sales report showed US cotton export sales for the week ending January 2 at 137,382 bales, up from 134,146 the previous week but down from 308,536 for December 19. The US dollar reached another new high for the move overnight, bringing the nearby contract to its highest level since November 2022, which does not bode well for US exports.

SUGAR

March Sugar sold off overnight and fell to its lowest level since August 23. Generally favorable weather in Brazil the past several months has improved the outlook for global supply. The USDA report on Friday put US sugar production for 2024/25 at 9.404 million short tons, up from 9.226 million in the December update and a new record. This was a result of an increase in beef sugar production to 5.338 million tons from 5.160 million forecast in December. US ending stocks are projected at 1.939 million tons, up from 1.696 million projected in December but down from 2.123 million in 2023/24. The stocks/use ratio is projected at 15.4%, up from 13.5% in December update but down from 16.5% in 2023/24. As of December 16, cumulative sugar production was running 5.1% below a year ago, while ethanol production was running 3.3% higher.

 

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