Dec Cotton Chopping Around

COTTON

December Cotton was higher overnight following a selloff yesterday. The US crop is in good shape according to the weekly Crop Progress reports, which showed 52% of the US crop rated good/excellent this week versus an average of 45%, World Weather Service says crops in West Texas will need more rains and warmer temperatures. They expect periodic showers and thunderstorms during the coming week with temperatures still a little milder than normal for this time of year. However, there is a chance for a warmup next week. WWS also said that cotton crops in Xinjiang, China are developing normally despite drought declarations by the China Meteorological Agency. They say there is sufficient water supply to carry on normal crop development. The market is also being kicked around by the uncertainty over the tariff situation, with key buyers of US cotton Bangladesh and Indonesia hoping to lower the tariffs on their countries. The dollar is higher this week after falling to its lowest level in more than three years last week.

COFFEE

September Coffee was slightly higher overnight but is back below unchanged this morning. The market may have drawn support from another report yesterday attesting to the slow pace of Brazil’s arabica harvest. The nation’s largest coffee cooperative, Cooxupe, reported that its farmers had harvested 40.4% of their expected crop as of July 4. This was up from 31.4% the previous week but behind the 51.6% at this point a year ago. World Weather Service said yesterday that Brazil has no risk of frost damaging cold for the next ten days, and that rains will be limited to the coastal regions, which should allow the harvest to advance. Colombia could see periodic showers and thunderstorms during the next week. The daily precipitation will be erratic and mostly in the light to locally moderate range.  All areas should get rain at one time or another. Rains are not necessarily welcome at this point after the recent heavy rains. ICE certified stocks were down 1,265 bags yesterday to 832,430, the lowest since June 11.

COCOA

The recent weather pattern has been supportive to cocoa production in West Africa, but there are emerging concerns that the 2025/26 crop will not be as strong as previously forecast. Reuters reported that a consensus view of five pod counters and six exporters is forecasting of a 10% decline output for the four main producing countries in West Africa (Ivory Coast, Ghana, Nigeria, and Cameroon) versus expectations in May and June that were calling for a 5% increase. One pod counter cited a high mortality rate of flowers and cherelles, which is currently 15% to 20% above the May forecasts. However, the report also stressed that more precise forecasts will be ready in late August or early September. World Weather Service expected rain will continue across West Africa during the next week, which is viewed as supportive long term for the crop. A mix of rain and sun will be critical over the next two months. ICE certified stocks were up 21,445 bags yesterday to 2.308 million.

SUGAR

October Sugar resumed its rally off last week’s 2 ½ year lows overnight and was close to taking out Monday’s high. Sugar production prospects out of Brazil, India, and Thailand are looking less strong than they were a week ago. UNICA is expected to release its report on Brazilian Center-South sugar production for the second half of June in the coming days. (They usually release it around the 15^th of the month.) A survey of analysts conducted by S&P Global showed an average expectation for sugar production to come in at 2.95 million metric tons, which would be down 9.8% from the same period last year. Cane crushing is expected to come in around 44.24 million tons, which would be down 9.7%. Analysts cited too much rains during the period that interrupted harvest and crushing activity. Ethanol output during the period is forecast to have fallen 13.1% to 2.01 billion liters. Pakistan announced it will import 500,000 metric tons of sugar this year to help to maintain price stability, which would be up from 250,000 tons last year. World Weather Service mentions that Thailand has been drying out recently in sugarcane and other crop areas and that this trend will continue for one more week before there is opportunity for rain to resume.

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