Favorable Weather Lifts Cocoa Outlook

COCOA

December Cocoa was lower overnight after trading up to but not through the 50-day moving average yesterday. Ivory Coast farmers interviewed by Reuters expressed optimism about the upcoming crop, saying that light rainfall combined with sunny spells across most of the nation’s cocoa-growing regions last week is boosting prospects for the upcoming October-to-March main crop. Co-op managers said many farmers were stockpiling beans and holding off on sales as they expect an increase in the government-set farmgate price later this month from the current 2,200 CFA francs per kg to somewhere between 2,500 and 2,800. World Weather Inc, on the other hand said seasonal rains have been slow to return and that recent dryness led to concern over the success of flowering for the mid-crop, which will be harvested in the second quarter of 2026. Precipitation was also needed for the main season crops, which will be harvested late this year and into early 2026. Eastern Ghana saw good rain over the weekend, but Ivory Coast and western Ghana were still too dry. The overnight maps showed rains reaching most of Ghana over the last 24 hours, but Ivory Coast rainfall remained north of the main cocoa growing regions. Ivory Coast cocoa arrivals totaled 7,000 metric tons for the week ending September 14, steady with the previous week but down from 17,000 a year ago.

COFFEE

December Coffee was near unchanged overnight after making new contract highs yesterday. The market has been supported by a decline in exchange stocks, as US buyers have attempted to secure coffee in the face of a 50% tariff on Brazilian imports. ICE certified stocks fell another 2,888 bags yesterday to 666,337, the lowest since April 30, 2024. They have declined for 14 straight sessions. The amount pending review has fallen to 15,617 bags, the lowest since August 25. Brazilian growers are apparently reluctant to commit to new crop sales as long as there is a possibility that the tariffs will be declared illegal by US courts. The US Supreme Court is expected to take up the case next month. Brazilian growers will have to sell their coffee eventually, but it may be some time. There have also been some recent revisions lower in current crop estimates for Brazil.

SUGAR

March Sugar extended its rally off last week’s contract lows yesterday and was inside yesterday’s range overnight. The French farm ministry put their nation’s 2025 sugar beet production at 31.8 million metric tons, down from 32.5 million in 2024. There has been no indication from UNICA when they will release their Brazilian sugar production report for the second half of August. It typically occurs on or before the 15^th of the month, and one would expect it to be released any day. Expectations lean towards another strong performance in line with the first half of the month and marking an improvement over June and July.  A survey conducted by S&P Global last week called for production to come in at 3.8 million metric tons, which would be up 17.3% from a year ago. First-half August production was 3.615 million tons, up 16.0% from the same period last year. Brazilian production has a tendency to peak in late July. The survey also has sugarcane crushing at 49.5 million tons, up 9.5% from a year ago and total recoverable sugars per kilogram at 149.48 kilograms per ton of cane, down 4.1%. Ethanol output (including corn ethanol) was forecast at 2.4 billion liters, down 2.5% from last year. As of August 16, cumulative sugar production for 2025/26 was -4.7% from 2024 after being -9.2% on July 16 and -14.7% on June 16. If the second-half August number comes in at expectations, it would put cumulative production -2.2% from a year ago.

COTTON

December Cotton was near unchanged overnight after the weekly Crop Progress report showed a slight decline in US crop conditions last week. The report showed 52% of the US crop was rated good/excellent as of September 14, down from 54% the previous week but up from 39% a year ago and above the five-year average for that date at 42%. Texas was 47% G/E, down from 48% last week but well above the five-year average at 28%. Texas is the only state among the top seven producers that is better than average. The report also showed that 50% of the US crop had bolls open, just below the five-year average for this date at 49%. The USDA supply demand report showed no changes to the US setup, but it was a little bullish against expectations calling for larger supply. World supply tightened a little. Traders are counting on a 25 basis-point rate cut at the Fed Meeting this week, which provides some support to demand expectations. There is an outside chance for a 50-bp cut, which if it does occur could provide a surprise boost to cotton. World Weather Inc said the rainfall in West Texas over the weekend will be good for future crops but that dry and warm weather is needed most to expedite late season development. Delta crops have dried out and are experiencing some crop stress. A few showers are expected late this week. Xinjiang, China crops are rated favorably.

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