ADMIS News
COTTON
The impact of the June 28 acreage report is sinking in, especially with recent rains in the southeastern US and Delta and with only a modest increase in export sales last week. Next up is the USDA WASDE report on Friday.
Looking at the 2024/25 balance sheet for US cotton, if we hold US harvested percentage, yield, and demand numbers steady with the June WASDE report and incorporate the increase in planted area to 11.7 million acres from the June 28 report, production would reached 17.6 million bales versus 16.0 million in the June WASDE report and 12.07 in 20223/24. ending stocks would climb to 5.7 million bales, up from 4.1 million in the June WASDE report and 2.85 million for 2023/24. This would be the highest since 2019/20, when they reached 7.25 million bales. The stock/use ratio would climb to 38.3% from 27.5% in the June WASDE and 20.9% in 2023/24. This would also be the highest since 2019/20, when it reached 41.0%.
Friday’s export sales report showed US cotton sales for the week ending June 27 at 115,400 bales for the 2023/24 (current) marketing year and 56,900 for 2024/25 for a total of 172,300. This was up from 158,190 the previous week but below the four-week average of 251,600. Shipments reached 175,800 bales, up from 141,000 the previous week and above the previous four-week average of 170,100. Cumulative sales for 2023/24 have reached 12.938 million bales, down from 13.887 million this time last year and the lowest since 2015/16. Sales have reached 112% of the USDA forecast versus a five-year average of 113% for this time of year. The largest buyer last week was China at 94,400 bales, followed by Vietnam at 30,200 and Pakistan at 15,200. China has the most commitments at 5.277 million bales, followed by Pakistan at 1.761 million and Vietnam at 1.387 million.
Hurricane Beryl is expected to hit the southeast Coast of Texas today as a category 1 storm that could bring heavy rains to the Coastal Bend region, east Texas and Arkansas. China’s weather bureau warned on Thursday that a prolonged heatwave could affect the nation’s cotton crop.
SUGAR
October Sugar fell back on Friday on some improvement in the forecasts for Thailand, with rainfall expected this week in the interior southern regions. The market was also short-term overbought, which left it vulnerable to some profit-taking. Southern Brazil could see rain late this week that would disrupt sugarcane harvesting. Dry weather in Center-south Brazil has sped the harvest but has also raised concerns about the size of the crop. There is no threat of damaging cold in the 15-day forecast. India’s monsoon rainfall is expected to be above average, which will improve the prospects for their cane crop. The bounce in the Brazilian real last week after falling to a 15-month low on Wednesday reduces the pressure on exporters to price their product. Brazil exported 3.205 million tons of sugar in June, up from 2.868 million in June 2022.
COCOA
The cocoa market is awaiting second-quarter grind data later this week and next to see what effect high prices have had on demand. The European data is due on Thursday and North America and Asia on July 18. Europe’s first-quarter grind was down 2.2% from the same period in 2023, but North America’s was up 3.6%, and Asia’s was down only 0.2%. At their lows in May, September Cocoa prices were at 50% of the contract’s range, which may limit the impact on grinding stats in the second quarter. The weather in west Africa has been decent recently, with periods of adequate rain mixed with sunshine. This is improving expectations for the 2024/25 main crop and may also help the later stages of the 2023/24 mid-crop.
COFFEE
Safras and Mercado reported on Friday that Brazil’s 2024/25 coffee harvest was 58% complete as of last Tuesday, up from 50% the previous week, 52% a year ago and above the long term average of 54%. The robusta harvest was 76% complete versus 70% a year ago and 73% on average, but results have been lower than expected for the top robusta producing state of Espirito Santo, and analysts warn that this could result in a downward revision in forecasts. The arabica harvest was 50% complete versus 43% a year ago and a long-term average of 45%. Dry weather has sped the harvest along, but there have been also been reports of smaller than usual beans. Brazil exported 203,278 metric tons of green coffee in June, up from 138,686 for June 2023. The Brazilian real closed higher on Friday for the second straight session. It put in a 15-month low on Wednesday, and as of Friday it had rallied 4% off that level. This eases the pressure on exporters to sell. Central Highlands, Vietnam robusta beans were quoted at 122.0-122.3 million dong/ton on Friday, up from 120-121.4 million the previous week. ICE arabica stocks fell by 9,270 bags on Friday to 811,359. There were 33,114 pending review, up from 23,764 on Wednesday. There is no threat of damaging cold in Minas Gerais, Brazil.
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