Coffee Oversold Status Corrected?

COFFEE

September Coffee is higher for the third straight session and is close to taking our last week’s high. The market has corrected a technically oversold condition from when it fell to 8 ½ month lows on July 8. Brazil’s harvest continues to run behind the average pace, as this week Cooxupe, the nation’s largest coffee co-operative, reported that its farmers had harvested 59% of their expected 2025 crop as of July 18, up from 49.3% in the previous week but below the 67.7% reported at the same time last year. Brazilian robusta coffee offerings to Europe remained limited but could pick up if US tariffs are imposed. Domestic coffee prices in Vietnam are slightly higher than a week ago, as farmers are reported to be reluctant to sell at current levels. Vietnamese growers have seen heavy competition from Brazil and Indonesia in recent weeks. Vietnam’s harvest begins in October, and a crop tour this week projected a 7% increase in 2025/26 production, which consists mainly of robusta beans. World Weather Service says dry biased weather in Indonesia coffee areas recently is expected to slowly change and that rain should begin returning soon, although it will be sporadic and initially light. Remnants of Tropical Storm Wipha produced more than 10 inches of rain along the upper coast of Vietnam this week, but the coffee areas were not damaged. Below normal rainfall is expected during the next week to ten days. Brazil’s weather continues to be mild.

SUGAR

October Sugar is higher today after bouncing off a two-week low yesterday. The market has been under pressure recently on expectations for a strong crop in India and a recovery in Brazil’s production this month, as dry conditions are believed to have supported harvest and crushing. The UNICA report on Brazil production for the first half of July should be released by next Thursday. Coca-Cola announced this week they will be adding a cane-based version of Coke, but not the whole line.

COCOA

September Cocoa was higher overnight and traded to the 100-day moving average. In the last six sessions, the market has gained $1,362 (19%) off eight-month lows, correcting an oversold condition. Ivory Coast’s Coffee and Cocoa Council reported yesterday that exports of cocoa beans and semi-finished products at ports had reached 1.508 million metric tons from the start of the marketing year on October 1 to June 30, up 1.3% from the same period last season. There were 808,954 tons between January 1 and June 30, down 10% from 899,585 tons in the same period of the previous season. Export data includes carry-over stocks from the 2023/24 season. The 2024/25 port arrivals data CCC reported on Tuesday were below what the weekly surveys had indicated. World Weather Service expects West African rains to stay north of the key growing areas through the first half of August allowing some harvest progress to advance and the soil to firm up. Seasonal rains should return again in mid- to-late-August.

COTTON

December cotton was higher overnight but still inside the July consolidation range and much less the range of the past few months. The export sales report for the week ending July 24 showed net cancellations of 32,700 bales for the 2024/25 (current) marketing year and net sales of 132,600 for 2025/26 for a net total of 99,900 bales. This was up from 78,503 the previous week. This was the largest new crop sale since June 12. Cumulative new crop sales are dismal, having reached only 2.106 million bales, which is the lowest since 2024/15. Shipments totaled 184,000, the highest since July 3. A US district has reversed a previous ruling that prevented farmers from spraying dicamba on cotton (and soybean) crops this year. The US Treasury Secretary Scott Bessent said yesterday that he will meet his Chinese counterpart next week in Stockholm and discuss what is expected to be an extension of an August 12 deadline for a deal to avert sharply higher tariffs.

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