US Exports Face Heavy Competition

COTTON

March Cotton is near unchanged this morning and is trading inside Monday’s range down. The bulls were disappointed when the market failed to push through last week’s high on Monday. It also failed to push through the 100-day moving average despite another (relatively) strong export sales report last week. Demand remains weak and the post-election rally in the dollar has made US products less competitive on the global market. Crude oil and equity markets were higher overnight, which are generally supportive to cotton. The weekly export sales report will be released tomorrow.

cotton on white background

COCOA

March Cocoa is higher this morning but towards the middle of yesterday’s lower range. The market sold off significantly yesterday after reaching a new contract high on Monday. News that the EU may be close to an agreement for postponing the implementation of their deforestation rule to the end of 2025 may have contributed to the selling yesterday. The rule, one implemented, would prevent the import of products grown on deforested land. It was supposed to come into effect this year, but growers and importers asked for a delay because of the difficulty in creating an infrastructure for verifying that the products were in compliance. The implementation of the rule could cause havoc with cocoa imports into Europe if the protocols are not in place. Dry conditions continue in West Africa, which is seasonal but nonetheless keeps concerns about main crop production alive.

 SUGAR

March Sugar is in a possible bull-flag formation that could spark a resumption of the rally off the August lows. The market is near unchanged this morning after a two-day rally off Monday’s 9-week low. CGB, the French sugar beet growers’ association is forecasting 2024 French sugar beet production at 32.4 million metric tons this year, up from 31.6 million in 2023 due to larger planted area and despite yields falling to a 17-year low. Their 2024/25 sugar production is expected to reach 3.9 million tons, up from 3.7 million in 2023/24. Center-South Brazil saw light to moderate rainfall of 5-30 mm over the past 18 hours. Last week the market received some bullish news out of Brazil, with Conab lowering its sugar production forecast for 2024/25 and UNICA data indicating a steep drop off in production during the first half of November. This week, it was reported that Indian production was off to a slow start, and a sugar refiners group put their 2024/25 production at 28 million tons, down from 31.9 million in 2023/24.

COFFEE

March Coffee was near unchanged overnight, maintaining its losses from Friday and Monday. The Brazilian real recovered slightly yesterday but remained inside the lower half of Friday’s big range down, and this may keep Brazilian producers interested in selling. Dealers told Reuters yesterday that the coffee flow from upcountry Vietnam has finally started to surge, saying middlemen decided to unload their supplies at the first sign of price weakness. London Coffee is also holding its losses from a three-day selloff from all-time highs. Most of Minas Gerais, Brazil, their primary arabica-growing region, received rain over the past 18 hours, with a significant area seeing moderate amounts of 15-30 millimeters. However, the market remains concerned that the Brazilian 2025 crop will be small after the severe drought this 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