Rain and Sun for West African Cocoa Crop

COCOA

The West African cocoa crop is seeing a mix of rain and sunshine which should be beneficial to the upcoming crop. Ivory Coast farmers interviewed by Reuters said that below-average rainfall in most of Ivory Coast’s main cocoa-growing regions last week is expected to boost the mid-crop after heavy rains the previous week posed a threat. The drier conditions would limit the risk of plant diseases and boost pod development. The farmers said the supply of cocoa coming in from plantations remained tight but that the amount of average pods on trees pointed to an abundant and high-quality harvest. World Weather Service expect routinely occurring rainfall across West African growing regions over the next 7-10 days, with all crop areas being impacted multiple times and daily amounts will be light to moderate with a few infrequent strong thunderstorms producing some heavy rain. This may mean we will  be hearing about too much rain next week, but the back and forth between wet and dry should be good for production.

SUGAR

The downtrend in October Sugar is intact with the market lower today and basically holding to the downtrend channel that has held for the past five weeks. Yesterday’s reversal lower in crude oil pulls some support from the market amidst a generally bearish supply outlook from expectations for strong cane crops in Thailand and India from forecasts of ample monsoon rains. News yesterday that southern India may see below normal rainfall over the next couple of weeks only offered limited support.

COTTON

December Cotton is back inside the range of the past 30 days after flirting with a move to the April lows yesterday. The market may have been pressured by concerns that the US involvement in the Israel/Iran conflict would hurt the global economy and therefore cotton demand and may have been relieved when a cease fire was announced, whether or not that holds. There is also enough uncertainty with the US crop, especially going into the USDA Acreage report next Monday. US crop conditions slipped last week, with the Crop Progress report yesterday afternoon showing 47% of the US cotton crop was rated good/excellent as of June 22, down from 48% the previous week and 56% a year ago but right on par with the five-year average for this date at 47%. Texas was 35% G/E, unchanged from last week and down from 48% last year but ahead of the five-year average at 31%. The report also showed 92% of the US cotton crop was planted as of June 22, up from 85% the previous week but down from 93% a year ago. Mississippi was 78% planted, up from 71% last week but down from 99% a year ago. They are running about 3 ½ weeks behind the normal pace. The Acreage report will provide an updated picture of US cotton plantings this year relative to the March 31 Prospective Plantings number of 9.87 million acres, which was the lowest since 2015/16.

COFFEE

Cooler weather is forecast for some coffee growing areas in Brazil this week, but it is not expected to be enough to induce permanent damage. World Weather Service described it as a “soft frost” and said most of the cool weather will be limited to northern Parana and southwestern Sao Paulo and possibly a couple of the traditionally coolest locations in the main arabica region of Sul de Minas. The London futures fell to their lowest level since August overnight, and this could put additional pressure on the NY futures today.

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