Brazil Coffee Exports in May Up From LY

COFFEE

Brazil’s coffee exports in May were up 90% from a year ago, and news of this seems to be putting additional pressure on the market today. Industry group Cecafe reported that Brazil exported 4.03 million bags of coffee in May, up 90% from a year ago. Arabica exports totaled 3.16 million bags, up from 1.99 million last year, and Robusta exports totaled 870,000 bags,  up from 131,700. Tight robusta supplies and uncertainty over the upcoming crops in Vietnam have allowed Brazil to capture market share. Vietnam’s exported 79,358 metric tons of robusta in May, down 47.8% from April and the lowest for that month in at least 15 years. Growers in Brazil have been expressing concern about small arabica beans due to dry weather. Dry conditions are expected over most of the country the next 4-5 days. ICE exchange stocks were unchanged for the second day in a row yesterday at 799,038 bags, up 8,300 from  a week ago.

COTTON

December Cotton was lower overnight after a mild bounce yesterday. The rally yesterday may have resulted from the decline in Texas crop conditions last week and from short covering ahead of today’s USDA supply/demand report. For the report, a Bloomberg survey has an average trade expectation for  US 2024/24 cotton production at 16.20 million bales, with a range of expectations from 16.00-17.60 million. This would be unchanged from last month and up from 12.07 million in 2023/24. Exports are expected around 13.14 million bales versus 13.00 last month. Ending stocks are expected around 3.9 million (range 3.7-4.3 million) versus 3.7 million last month and 2.40 million for 2023/24. World ending stocks are expect around 83.51 million bales (range 82.50-85.00) versus 83.01 million last month and 80.48 million in 2023/24. The forecasts call for above normal temperatures across the US cotton belt, with mostly normal or above normal chances of rain. The northeastern two-thirds of Georgia, the northeastern third of Alabama, and the Carolinas have lower than normal chance in the 6-10-day. West Texas have normal and above normal in the 6-10 and 8-14-day maps.

SUGAR

Unica is expected to release its latest update on Brazilian sugar production this week, and a survey of analysts by S&P Global Commodity Insights has expectations for Center-South production for the second half of May to be down 0.8% from a year ago to 2.9 million metric tons. The season started out fast due to dry conditions that were conducive to harvesting, but the pace fell back closer to normal levels by the first half of May. The dryness should eventually pull cane yields down. Dry conditions are expected to continue over the next week. Traders will be also be watching the sugar mix, as the last report showed only 48.3% of the cane crop processed for sugar versus expectations of 51.7%. For this report, the average expectation calls for 49.8%. Wilmar Sugar, Australia’s largest sugar producer, temporarily halted operations today at a mill that began processing cane two days ago, after unions said workers would lay down their tools. This was the only one of their eight in Australia that had begun its cane crushing season. Labor issues have been threatening to delay the start of the season, which typically begins in June, and it is feared that further delays will lower production this year. Workers rejected the latest offer from the company today. Wilmar is the fourth-largest sugar exporter in the world. India’s monsoon rains have lost momentum after covering western regions ahead of schedule, and their arrival in northern and central states could be delayed.

COCOA

Ghana is now looking to roll 350,000 metric tons of pre-sold cocoa to the 2024/25 season, up from a previous expectation of 250,000. Ghana pre-sold 785,000 metric tons for 2023/24 but will likely only deliver 435,000. Their crop typically runs from 750,000-850,000 tons. It fell to 670,000 in 2022/23 and is not expected to exceed 500,000 in 2023/24. Rains were below average last week in most of Ivory Coast’s main growing regions, but farmers in the southernmost region said that enough rain may have fallen over the weekend to boost development of the April-September mid-crop. Warm and somewhat wetter than normal conditions (10-55 mm above normal) are expected over the west African cocoa belt over the next 10 days, which would benefit development as well.

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