Sugar Support From Crude Oil & Hurricane

COCOA

December Cocoa was higher overnight and was close to taking out Monday’s high. The market is in a consolidation mode as it waits for the arrival of the west African 2024/25 main crop, which officially begins next month. Farmers in Ivory Coast have said some harvest had already begun but that they were reluctant to sell as they were hoping that the official farmgate price would be increased next month. Ivory Coast and Ghana are seeing active rainfall in the north, but the southernmost regains still seem to be missing out. Over the last 24 hours, some regions in the north received as much as 77 millimeters, with little or none seen in the southern one-third of Ivory Coast and southwest Ghana. Ivory coast’s cocoa grind totaled 57,149 metric tons in July, down 12.1% from a year ago, according to exporter association GEPEX. Cumulative grind since the marketing year began in October reached 525,980 tons, which is down 13.2% from a year ago.

COFFEE

December Coffee was lower overnight following yesterday’s rally to the highest level in a week and a half. The market has been in an uptrend since last October, with a series of higher highs and higher lows and a new contract high late last month. Yesterday, Cecafe reported that Brazilian green coffee exports in August totaled 3.41 million bags, up 1.4% from a year earlier. Arabica exports were 7% lower than last year at 2.49 million bags, and robusta exports were 31% higher at 925,000. Vietnam exported 76,214 metric tons of coffee in August, up 1% from July, according to customs data. Cumulative exports since January reached 1.056 million tons, down 12.1% from a year earlier. Cepea/Esaiq, a research center at the University of Sao Paolo said yesterday that robusta bean prices on the Brazilian spot market were actually higher than arabica beans. This has not happened since December 2015. Not much precipitation is expected in key coffee areas of Brazil for the next week to ten days. The ongoing drought is providing a bid under the market. Robusta coffee areas in the Central Highlands of Vietnam are expected to see periodic showers and thunderstorms during the next week. Daily rainfall will be mostly light to moderate and its distribution may be a little sporadic at times, though most areas will get rain at one time or another. ICE arabica warehouse stocks increased by 3,867 bags yesterday to 850,554 and were up 36,820 bags from the week before. The have reached their highest level since early 2023, but as recently as early 2021 they were above 2 million.

COTTON

December Cotton was higher overnight as the market seemed to be getting concerned that Hurricane Francine will damage some cotton in Louisiana and Mississippi. This week’s crop progress report showed Louisiana had 72% bolls open and Mississippi 69%, which leaves the crops vulnerable to heavy rains that could cause discoloration and string fibers out from the bolls. As of Sunday, 2% of the Louisiana crop had been harvested, with 0% for Mississippi. The storm is expected to hit landfall today west of New Orleans, and forecasts are calling it reach Category 1 status or possibly Category 2. World Weather Service was calling for maximum sustained wind speeds of as high as 90 to 105 mph. For the USDA supply/ demand report tomorrow, the average trade expectation for US 2024/25 cotton production is 15.31 million bales, with a range of expectations from 14.88 to 16.10 million. This would be up from 15.11 million in the August update. Ending stocks are expected around 4.68 million bales (range 4.10-5.25 million ) versus 4.50 million in August. World production is expected to come in around 114.75 million bales versus 117.64 million in August, and world ending stocks are expected at 77.46 million versus 77.61 million in August .

SUGAR

March Sugar was higher overnight after falling to its lowest level since August 23 yesterday. The potential for damage to unharvested sugar cane in southern Louisiana from Hurricane Francine may be lending some support, as well as a recovery in crude oil prices after they fell to their lowest level since January 22 yesterday. The UNICA report covering Brazilian sugar production for the second half of August is expected to be released later this week or early next. Analysts surveyed by S&P Global showed an average expectation for Center South sugar production at 3.26 million metric tons versus 3.11 million in the first half of August and 3.46 million a year ago. The previous report showed first-half August production was 10.2% behind 2023/24, but cumulative production since the marketing year began was up 5.4% from 2023/24. The trade is expecting production to continue fall behind a year ago levels and for cumulative production to eventually fall behind a year ago, due to the extremely hot and dry conditions experienced earlier this year and the lack of rainfall since.

Interested in more futures markets?  Explore our Market Dashboards here.