COCOA
March Cocoa reached another new contract high overnight, the sixth time out of the past seven sessions. Dry conditions in West Africa keep concerns about the upcoming crop in front of traders’ minds. World Weather Service says any showers will continue to be mostly near the coast, avoiding key production areas. A drying trend should dominate the region, but that is normal for this time of year. ICE exchange stocks fell another 7,898 bags yesterday to 1.434 million, which is the lowest since December 2023.
March Cocoa pushed above 11,000 overnight, and that level could be a key inflection point today, as it represents the June high on the nearby chart. The December contract goes off the board today, which will make March the front month.
COTTON
March Cotton appears to be resuming its downtrend after a brief, two-day recovery. More evidence of lackluster demand for US cotton counters ideas that low prices are attracting buyers. While the crude oil market drew support this week from China’s indications that it would adopt monetary stimulus to boost their economy, the cotton market saw little reaction. China had been one of the biggest customers of US cotton until last year, but reaction to US sanctions, a strong crop this year, and heavy competition from Brazil have kept them away. Yesterday’s exports report showed net sales of 152,989 bales for the 2024/25 (current) marketing year and 3,344 for 2025/26 for a total of 156,333 the week ending December 5. This was down from 170,663 the previous week well below the 300,000+ that were seen for two straight weeks in November. Cumulative sales for 2024/25 have reached 7.012 million bales, down from 7.976 million at this time last year. This is the slowest pace since 2015. Sales have reached 66% of the USDA forecast versus a five-year average of 74% for this point in the marketing year.
SUGAR
March Sugar is slightly lower this morning after a sharp reversal lower in the wake of a bearish UNICA report on Brazilian sugar production yesterday. The report showed Brazilian Center South sugar production totaled 1.084 million metric tons during the second half of November, which was down from 1.409 million a year ago but up from 901,000 in the first half of the month. Cane crush was 20.350 million metric tons, down from 23.997 million for the same period last year but up from 16.418 million during the first half of November. The declines relative to a year ago were in keeping with expectations, but the trade was apparently surprised by the increase over the first half of the month. The readings for the first half were very low, with cane crush down 53% from the year prior and sugar production down 59%, so the recovery should not have been too surprising. Recent rains should eventually help cane yields for next year’s crop, but this comes after severe drought this year and wildfire damage to fields.
COFFEE
March Coffee edged lower overnight as the market continued to back off from Tuesday’s move to all-time highs. World Weather Service expects Brazil’s weather to remain supportive of good cherry development over the next ten days, with all production areas getting rain at one time or another. The market rallied sharply this week after Volcafe lowered its forecast for the 2025 Brazilian arabica crop to 34.4 million bags, but traders are greeting that report with some degree of skepticism. In Vietnam, moderate to heavy rain fell on the Central Highlands this week, and regular rain is expected this weekend, which could slow harvest and raise concerns about premature flowering. Coffee trade in Vietnam has been subdued recently, with traders saying that farmers are holding back in anticipation of higher prices.
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