COTTON
March Cotton is higher this morning on follow-through from a reversal yesterday. The dollar is lower this morning and crude oil is higher, and both of those are supportive to cotton. President Trump has so far not issued any tariffs against China, and he has expressed a desire for “good relations” with that nation, which does ease concerns about a loss of export business, not that US exports sales to China have been good this year. Traders today will be anxious to see if the Export Sales report today comes in strong for a second week in a row. Last week’s report showed net sales of 317,568 bales (current and new crop combined) for the week ending January 9. This was up from 137,382 the previous week and the highest since November 14. Turkey was the largest buyer last week, followed by Vietnam. There may have been a push to secure inputs this past week ahead of the Lunar New Year holidays, which start this weekend and last through next week. Cumulative sales are the lowest for this point in the season since 2015. As of last week’s report, sales had reached 78% of the USDA forecast for the marketing year versus a five-year average of 82% for this point in the season. World Weather Service says some dryland western production areas in Queensland and New South Wales need more rain. Cotton was rated favorably in most of eastern Australia yesterday, but timely rain is needed in unirrigated fields.
SUGAR
March Sugar was higher overnight for the third straight session, having drawn support this week from concerns over US cane crops in Florida and especially Louisiana in the wake of the unprecedented cold snap. World Weather Service said that the heavy snowfall in Louisiana may have helped protect the crown of the cane plants, but the single-digit temperatures had the potential to could destroy all of the vegetative growth and set the crop back significantly. A better assessment will come after the region warms up, but the true effects may not be known until the harvest next fall. A poor crop would increase US import needs and pull sugar from the world market. Reuters reported today that Indian traders are struggling to sign export contracts even after the government allowed the export of 1 million metric tons. Mills are seeking a hefty premium over London prices. After exports were allowed, local prices jumper nearly 10%. Before export approval, Indian prices were at a discount to global prices, but then the market sold off. India was the world’s second largest exporter for the five years up to 2022/23. Now that futures prices have jumped 8% in three sessions, some of that sugar may get sold. An industry group in Thailand expects businesses to incur up to 1 billion baht ($29.5million) in losses from China’s ban on sugar syrup and premixed powder from that nation. According to Czarnikow, Thailand was the main supplier of sugar syrup to China last year with exports of 1.2 million metric tons. The head of Thai group said that if the ban is not lifted, it could cut demand for Thai sugar by one million tons this year.
COFFEE
March NY Coffee is near unchanged this morning after trading to a new contract (and all-time) high yesterday by just 11 ticks (0.55). Safras & Mercado reported today that forward sales of Brazil’s 2025/26 coffee crop is lagging behind the normal pace. Sales are currently estimated at 12% of the expected production versus an average of 21% at this point in the year. This could represent a hesitancy on the part of buyers to pay up for next year’s coffee, but it could also indicate a reluctance for growers to sell when the upcoming crop is in doubt. The market has been drawing support from expectations that the severe drought last year has left coffee trees lacking the vitality to produce a strong crop. Rains that came late in 2024 induced flowering, but cherry development has reportedly been light, and no amount of rain can change that picture at this point. ICE arabica certified stocks fell another7,460 bags yesterday to 948,749, their lowest since December 16. Stocks are down 33,628 in the last three sessions. The fund net long position remains high at 56,288 contracts but still shy of the record 71,811 from last April.
COCOA
March Cocoa is slightly lower this morning after backing off from the January 6 high earlier this week. The market found support this week from a drop in Ivory Coast port arrivals, which supported growers’ concerns about the dry season taking a toll on main crop production. Farmers interviewed by Reuters this week complained about a lack of beans left to harvest. However, Ivory Coast’s Coffee and Cocoa Council says they are not surprised by the slowdown; the group already lowered its 2024/25 production forecast to 1.3 million metric tons in November from 1.5 million previously. World Weather Service said yesterday that the Harmattan wind should be light to moderate over the next week to ten days, but that it would induce some warmer than usual temperatures and quick drying conditions in west Africa. Main production areas are expected to remain dry over the next couple of weeks as the dry season winds down. Seasonal rainfall can begin in early to mid-February, and good rains will be necessary to improve the outlook for the mid-crop. ICE cocoa certified stocks fell 10,786 bags yesterday to 1.270 million, the lowest since December 2003. Stocks are down 22,758 bags in the past two sessions
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