Softs
Softs this morning are higher with July sugar +0.07 (+0.52%), July coffee +0.50 (+0.40%), July cocoa +2 (+0.10%), and July cotton +0.47 (+0.65%). Softs on Friday closed lower: July sugar -0.03 (-0.22%), July coffee -2.25 (-1.79%), July cocoa -51 (-2.52%), July cotton -0.03 (-0.04%). July sugar on Friday tumbled to a fresh 1-1/4 year low as signs of ample supplies prompted fund selling. Data from Unica showed Brazil 2017/18 Center-South sugar production for the second half of May at 1.754 MMT, up +3.95% y/y. Last Monday, researcher F.O. Licht cut its global 2016/17 sugar deficit estimate to -4.2 MMT from a prior estimate of -5.5 MMT and raised its 2017/18 global sugar surplus estimate to 4.6 MT from a May forecast of 2.7 MMT, due to an unexpected surge in Pakistan sugar production. In addition, the ISO recently projected a global 2017/18 sugar surplus of 3 MMT from a 2016/17 deficit of -6.465 MMT. Data from Unica show that 35.628 MMT of sugar was produced in Brazil's Center South in the 2016/17 year, up +14.1% y/y. Researcher Wilmar predicts Thailand 2017/18 sugar production may climb to a record 12 MMT and India's National Federation of Cooperative Sugar Factories predicts 2017/18 sugar production in India, the world's second biggest producer, will climb +25% y/y to 25 MMT as normal rains last year helped the sugar crop. On the positive side, Copersucar cut its Brazil 2017/18 sugar output estimate to 35.5 MMT from a previous estimate of 36 MMT.

Jul coffee prices on Friday slid to a 1-year nearest-futures low as abundant supplies encouraged fund selling. ICE-monitored coffee inventories last Tuesday rose to 1.517 mln bags, a 1-1/4 year high while data from the Green Coffee Association showed U.S. May coffee inventories rose +16.9% y/y to a 23-year high of 7.1115 mln bags. ICO data showed global coffee exports from Oct-Apr are up +3.1% y/y to 69.51 mln bags. Nearest-futures (Z16) coffee last Nov surged to a 2-1/4 year high on supply concerns. Conab said it sees Brazil's 2017 coffee output falling as much as 15% to 43.7 mln bags from 51.4 mln bags in 2016 as crops are in their lower-yielding half of their 2-year cycle. Also, Cecafe predicts that Brazil 2017 coffee exports will fall -5.9% y/y to 32 million bags due to a lower-yielding coffee crop.

Jul cocoa prices on Friday closed lower on ample supplies. Ivory Coast farmers sent 1.747 MMT of cocoa beans to ports from Oct 1-Jun 11, up +23.7% y/y. Also, the ICCO on Jun 7 raised its 2016/17 global cocoa production estimate to a record 4.692 MMT from 4.552 MMT, up +18.3% y/y, and raised its global 2016/17 surplus estimate to +382,000 MT from 264,000 MT, the biggest surplus in 6-yrs. Jul cocoa last Tuesday rose to 1-month high after a slide in the dollar index to a 7-month low spurred fund short-covering. Jul cocoa on May 25 fell to a 1-1/2 month low on signs of abundant supplies after ICE-monitored cocoa supplies rose to a record high of 5.849 mln bags, the most since the data series began in 1999. Jul cocoa on Apr 20 had posted a contract low and nearest-futures (K17) cocoa fell to a 9-1/2 year low as fund selling pummeled cocoa prices on signs of robust supplies amid weak demand. Ghana, the world's second biggest cocoa producer, said its 2016/17 cocoa production had risen to 812,153 MT as of May 25, up +4.4% y/y and a 3-year high. ICCO projects Ivory Coast 2016/17 cocoa output to jump +20% y/y to a record 1.98 MMT and Ghana cocoa output to climb +4% to 850,000 MT. Demand is mixed as data from the National Confectioners Association reported that North America Q1 cocoa grindings rose +1% y/y to 118,790 MT, weaker than expectations of an increase of +1.2% y/y. On the positive side, Q1 Asian cocoa processing jumped +19.17% y/y to 177,450 MT, higher than expectations of +10% y/y. Q1 European cocoa processing rose +1.1% to 339,485 MT, close to expectations.

Jul cotton on Friday sold off to a 5-1/2 month nearest-futures low on ample supplies after ICE-monitored cotton inventories rose to 476,100 bales, a 3-3/4 year high. Also, signs of improved U.S. cotton conditions have eased crop concerns after Monday's USDA weekly Crop Progress report showed 66% of the U.S. cotton crop in good-to-excellent condition as of Jun 11, up +5 points w/w and +13 points y/y. Another negative was the Jun 9 WASDE report where the USDA cut its U.S. 2017/18 export estimate to 13.5 mln bales from 14.0 mln bales and raised its U.S. 2017/18 cotton ending stocks estimate to a 9-year high of 5.5 mln bales, more than expectations of 5.0 mln bales. The USDA also hiked its global 2017/18 cotton ending stocks estimate to 87.71 MMT, higher than expectations of 87.5 MMT, although still a 6-year low. Jul cotton on May 15 rallied to a 3-year nearest-futures high on fund buying spurred on from strong demand amid tighter supplies. Chinese cotton demand is exceptional as the China Cotton Association reported that Chinese Jan-Apr cotton imports surged +72% y/y to 480,000 MT. Foreign demand for U.S. cotton in on fire as USDA export data shows U.S. cumulative cotton exports this marketing year through May 25 up +72.4% y/y.