Coca-Cola Switching to Cane Sugar?

SUGAR

October Sugar was higher overnight and pushed above the 50-day moving average for the first time since mid-May. President Trump announcement this week that Coca-Cola had agreed to use cane sugar in its beverages in the US may be lending some support but so are a diminished cane harvest in Brazil and dry conditions in India. In response to Trump’s comment, Coca-Cola said “more details on new innovative offerings within our Coca-Cola product range will be shared soon,” which does not look like a complete affirmation of Trump’s statement. Switching to cane sugar would be expensive and hurt US corn growers. Around 400 million bushels of corn are used annually to make corn syrup for drinks and other food products, representing around 2.5% of U.S. corn production. The US is expected to produce around 3.7 million metric tons of cane sugar this year, compared with around 7.3 million tons of corn syrup (and 4.6 million tons of beet sugar). Coca-Cola has independent bottlers with hundreds of facilities already designed for use with high fructose corn syrup. China imported 420,000 metric tons of sugar in June, up from roughly 27,000 from a year ago. Cumulative imports for the year so far have reached 1.04 million tons, down 19.7% from a year ago. World Weather Service says southern India’s rain prospects are improving for late this week through all of next week. However, south-central Maharashtra, a key producing state, will continue a bit too dry over the next two weeks. Thailand has also been drying out but the prospects for rain are improving.

COFFEE

Safras & Mercado reports that Brazil’s 2025/26 coffee harvest was 77% complete as of July 16, up from 74% at this point a year ago. Recent dry conditions have allowed the harvest to advance and move ahead of last year. September Coffee put in a low the day before the 50% tariffs on Brazil were announced, and the market has seen in a modest rally since, but the implications of the tariffs are mixed. The US imports about 33% of its coffee from Brazil, and the tariff would likely raise prices for US consumers. But it would also leave Brazil looking for other buyers. Deliverable locations for the NY futures are located in the US and Europe, with 84% of certified ICE stocks currently located in Antwerp. Cecafe said yesterday on that there are advanced discussions regarding the tariff. World Weather Service said that earlier this week some of the computer weather forecast models were suggesting colder weather would be possible in late July across some of the coffee areas of Brazil but that the  forecast never suggested it would be cold enough to threaten crops. As of yesterday, some cooling was still possible at the end of the month, but the forecast continued to be non-threatening. Reuters reports that heavy rains in Indonesia have disrupted the drying process for their (robusta) beans and may have caused bean to fall of trees prematurely in Liwa, West Lampung regency.

COCOA

September Cocoa recovered some of yesterday’s losses overnight after the North American second quarter grind, which was released after the close yesterday, showed a much smaller percentage decline than the European and Asian numbers that were released during the session. The North American grind came in at 101,865 metric tons, down from 110,278 in the first quarter and 104,781 a year earlier. This marked a 2.8% decline versus declines of 16.3% and 2.8% for Europe and Asia. This was North America’s lowest second-quarter grind in at least 14 years. The combined grind for all three regions was down 9.4% from a year ago. Asia’s second quarter grind came in at 176,644 tons, down from 213,898 in the first quarter and 210,968 a year ago. This is a 16.3% decline from a year ago and the lowest since the 3^rd quarter of 2016. The overnight maps showed rains in Ivory Coast and Ghana stayed to the north of the main cocoa growing regions over the last 24 hours. The dry conditions are typical for this time and a viewed as beneficial. Nigeria was dry, but Cameroon did see some rain.

COTTON

December Cotton was higher overnight, as the market may be truing a bit optimistic about the possibility that the US will agree to trade deals with some of our export customers. President Trump announced a deal this week with Indonesia and hinted that they were close to one with India. Earlier this summer he announced one with Vietnam. As of this week, Vietnam is the largest buyer of US cotton this year at 2.964 million bales. India is the seventh largest at 475,000, and Indonesia the ninth largest at 309,000. The cotton made an impressive recovery after the weekly export sales report came was disappointing in terms of both sales and shipments. The report showed net sales of 5,526 bales for the 2024/25 (current) marketing year and 72,977 for 2025/26 for a total of 78,503. This was down from 156,632 the previous week and the lowest since February 2024, except for the net cancellations on the rollover last August. Shipments totaled 156,399 bales, down from 240,899 the previous week and lowest since December. Cumulative sales for 2024/25 have reached 11.800 million bales, down from 13.019 million at this time last year and the lowest since 2015/16. New crop sales at 1.973 million are the lowest for this point in the season since 2014/15. The largest buyers were Honduras at 22,810 bales, Nicaragua at 13,227 and Vietnam at 7,325. China bought nothing. West Texas saw very little rain over the past 18 hours. World Weather Service expects drying and warming during the next ten days could be beneficial to the crop. More rain will be needed eventually.

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