Mild Support from Crude This Morning

 SUGAR

March Sugar was slightly higher overnight after selling off sharply on Friday. The Brazilian the real’s collapse last week may have encouraged selling by Brazilian sugar producers and exporters. Last week, the sugar market failed to get much lift off Bullish UNICA and Conab Reports. Crude Oil prices are higher  this morning, which may lend support to sugar. Last week, Brazilian agricultural agency Conab lowered its forecast for Brazilian 2024/25 sugar production to 44 million metric tons from a previous forecast of 46 million. Center-south production was lowered to 40.31 million from 42.06 million previously forecast. Also last week, the UNICA report on Brazilian Center-South Sugar Production for the first half of November came in at 898,000 metric tons, down from 1.784 million in the second half of October and down 59% from a year ago. Cumulative production for the 2024/25 marketing year was down 3% from a year ago, this first time below year-ago levels all season. Crushers have switched more of their operations to ethanol and away from sugar. Ethanol’s share of cane crush was at 57% for the period versus 50% this time last year, leaving the sugar share down at 43% versus 50% a year ago.

sugar packets

 

COFFEE

March Coffee gapped lower overnight after trading to new contract highs on Friday. On Friday, the nearby contract also came within 2.50 cents of taking out the all-time high of 337.50 from April 1997. The market had become technically overbought on the tight supply theme, but the Brazilian real had also reached a new low against the dollar, which could have encouraged farmer selling. The big question is whether Brazil’s arabica trees have enough energy to produce a strong crop in 2025 after their severe drought this year. There have also been reports of traders and hedgers being caught short and unable to meet their obligations.. ICE certified arabica stocks ended November at 900,548 bags, up from 852,058 at the end of October and the highest since May 2022. World Weather Service says rain was reported in various coffee production areas of Brazil, Indonesia, India and Vietnam over the weekend. Most of the precipitation was light. Similar conditions occurred in portions of Central America, although northern Honduras and a part of northern Nicaragua were expect to see harvest-disrupting last night through today, with a little more during mid-week.

COCOA

March Cocoa traded to a new contract high overnight but was back near unchanged as the session progressed. Ivory Coast cocoa arrivals totaled 92,000 metric tons last week, down from 94,000 the previous week but up from 67,000 for the same week a year ago and above the five year average for the week at 88,000. Cumulative arrivals since the marketing year began on October 1 have reached 735,000 tons, up from 548,000 at this point a year ago and above the five year average of 730,000. On Friday, the ICCO released its fourth-quarter update on the 2023/24 global supply/demand setup. World 2023/24 production was revised higher to 4.382 million metric tons from 4.332 million previously and 5.044 million 2022/23. Grindings were revised higher to 4.816 million from 4.751 million previously and 5.058 million in 2022/23. This left a net deficit of 478 million tons versus 462 million previously and 64 million for the previous year. This still marks the third straight year of deficits and the largest one on record. Ending stocks at 1.3 million tons are the lowest since 1987, and the stocks/use ratio of 27% is the lowest since 1976 when it fell to 19%. That is the lowest going back to 1960, which is as far back as the data shows. The primary interest is the condition of the 2024/25 crop, which is currently in harvest. There are some concerns that Ghana’s parliament will not be able to pass a provisional budget before the December 7 general election. This risks an unprecedent government shutdown early next year. Any instability could affect the harvest and marketing of cocoa beans. Ghana is one of the more stable democracies in Africa. Mostly dry conditions were seen over the weekend from Ivory Coast to Nigeria and Cameroon. Any showers that did occur were brief and light and were confined to mostly near the coast. A similar weather pattern is expected through the next ten days. They are in their dry season, and weather like this is viewed as good for crop maturation and harvest.

COTTON

March Cotton sold off overnight after the market failed to punch through Friday’s 2 ½-week high. The market saw another strong export sales report for cotton on Friday, the second in a row, and the market drew some mild support on the news, but it apparently lacked the momentum to close above the 100-day moving average. The nearby Brazilian real fell through its 2020 lows to its lowest level since at least the 1990s on Friday, and this may have brought expectations that Brazilian growers would be encouraged to aggressively market their cotton. The export sales report on Friday showed net sales of 324,072 bales for the week ending November 21, down from 334,532 the previous week but still the second highest since January. Perhaps cotton exporters and buyers were anxious to get business done before the tariffs go into effect next year. Cumulative sales for 2024/25 have reached 6.688 million bales, down from 7.802 million at this time last year and below the five-year average of 9.222 million. Sales have reached 63% of the USDA forecast versus a five-year average of 71% for this point in the marketing year.

 

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

Explore the latest edition of The Ghost in the Machine

Explore Now