In its first estimates for 2023/24, the International Cocoa Organization (ICCO) expects the global cocoa market to encounter a supply deficit of 374kt due to falling production, higher than the deficit of 74kt seen last year. ICCO expects production to fall by 11% to 4.5mt in 2023/24 due to lower output from major producing countries, including the Ivory Coast and Ghana. Meanwhile, total grindings are expected to decline by almost 5% for the 2023/24 season pushing the stock-to-grindings ratio to the lowest in more than four decades. ICCO believes that these projections are subject to risks arising from weather conditions, and crop diseases. ICE Cocoa futures are up almost 45% this year amid expectations for global supply shortages primarily due to unfavourable weather conditions.
In its latest Cereals Market Situation report, the European Commission shows that soft-wheat production could fall to 125.6mt for the 2023/24 season, compared to its previous projections of 125.9mt. Lower production estimates raised the wheat import projections by 0.5mt to 7.5mt for the season. Meanwhile, corn production estimates were revised higher to 62.3mt, up from its previous estimates of 61.4mt. The EU corn imports forecast dropped from 19mt to 17.5mt for the period, due to higher domestic production projections for the year.
Lastly, USDA released its weekly grains export sales report which shows that US grain sales remained strong for the week ending 22 February. US corn shipments surged to 1,247.3kt, higher than the 998.1kt a week ago and 598.1kt for the same period last year. This is also higher than the average market expectations of 935kt. Similarly, US wheat export sales rose to 322.1kt, higher than the 280.1kt reported a week ago and 300.9kt reported a year ago. The market was expecting a number closer to 355kt. Meanwhile, US soybean shipments stood at 159.7kt, higher than the 55.9kt reported a week ago but lower than the 494.7kt reported a year ago and the average market expectations of 334kt.
