Anticipating a Strong Mid-Crop For Coffee

COFFEE

The International Coffee Organization reported yesterday that global green coffee exports totaled 11.2 million bags in May, up 3.5% from year-ago levels, primarily from a surge in robusta exports.  Robusta exports reached 4.31 million bags, up 20% from a year prior, primarily due to increased flows from top Vietnam, Indonesia, and Uganda. World Weather Service reported widespread rains in Vietnam over the weekend but that some areas in the central and northeast parts of the Central Highlands could use more. They also said Indonesia coffee was still rated well but that greater rain is desired.  Brazil temperatures were mild to warm and that situation in not likely to change for a while, which means they will continue to avoid the risk of crop-damaging cold. A lack of rain means harvest conditions will remain good. Northern Colombia saw the most significant rain over the past weekend, with the central and southwestern parts of the nation seeing lighter and more sporadic rainfall.

COCOA

The pace of arrivals at Ivory Coast ports remain slow as normal for this time of year, as the market turns its focus to the upcoming main crop. Arrivals totaled 18,000 metric tons for the week ending July 6, the same as the previous week and up from 16,000 a year ago. Cumulative arrivals for 2024/25 have reached 1.628 million tons, up from 1.612 million at this point a year ago but below the five-year average of 1.974 million. Ivory Coast farmers interviewed by Reuters cited good soil moisture in most of the nation’s cocoa-growing regions as encouraging strong flowering for the main crop. This was despite below-average rainfall last week. These farmers said they expect bean availability to rise by mid-August as more large pods reach maturity, but more rain and sunshine will be needed in the coming weeks for the pods to develop well. Ivory Coast grinders have reportedly cut their cocoa bean purchases by 20% from year-ago levels since January because of surging prices. Five Ivory Coast-based grinders and eight exporters interviewed by Reuters said that beans from the current mid-crop harvest are of lower quality, with reduced fat and butter content, preventing factories from running at full capacity. Data from Ivory Coast’s regulator CCC showed April and May grindings were down 7% and 8.5% from year ago levels respectively.

COTTON

The weekly Crop Progress report showed 52% of the US cotton crop was rated good/excellent as of July 6, up from 51% the previous week and above the five-year average for this date at 45%. Texas and southeastern states improved, while some of the Delta states deteriorated. Texas was 42% G/E versus 40% last week and a five-year average of 30%, and Georgia improved to 71% from 66% last week and a five-year average of 63%. Arkansas fell to 58% G/E from 67% and well below the five-year average of 77%, while Mississippi dropped to 50% from 60% and a five-year average of 67%. As far as crop progress is concerned, the crop is “on time,”, with 48% of the US crop squaring versus 49% on average. Arkansas and Mississippi both appear to be about four days behind, with Arkansas 67% squaring versus a five-year average of 80% and Mississippi 49% squaring versus 56% on average. The tariff deadline has been pushed back with the Trump administration putting the implementation date on August 1 and leaving open the possibility of trade agreements ahead of that date. If a series of agreements is announced, it could assuage demand fears considerably. Number-one buyer Vietnam already has an agreement in place. The fourth-largest buyer, Bangladesh, has talks scheduled Wednesday.

SUGAR

October Sugar’s bounce off 2 ½ year lows last week has corrected a short-term oversold condition. The market has met a wave of selling from optimism over upcoming global cane production, especially in India and Southeast Asia. A drier trend in southern India could dash some of that optimism. Unfortunately for the bulls, Thailand saw some rain over the past 24 hours that could assuage some latent concerns about dryness there.

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