Brazil Sugar Report Due

SUGAR

UNICA will release its report on Brazil Center South sugar production for the first half of October later today. A survey of analysts by S&P Global survey calls for the report to show cane crushing for the period to be down 1.5% from a year ago to 33.42 million metric tons but sugar production to be up 0.6% to 2.47 million tons. The last report (as of October 1) showed cumulative crush had reached 490.926 million tons, down 3.0% from last year and cumulative sugar production 33.524 million tons, up 0.84% from a year ago. Sugar’s share crush was 51.2% during the second half of September versus 47.7% for the same period last year. There have been some suggestions that sugar prices are approaching parity with ethanol, which may encourage crushers to switch away from sugar.

COCOA

December Cocoa is slightly lower this morning but inside yesterday’s range. The market has been under mild pressure this week on expectations for Ivory Coast arrivals to increase in the coming weeks as the crops roll in. Weather conditions in West Africa have been generally supportive for production, with a mixture of rain and sunshine and no reports of disease. However, consultancy TRS did say that Ivory Coast and Ghana could see a “poor tail” to their main crop that could be offset by a good mid-crop. As reported yesterday, Mondelez cut its annual profit forecast after volumes fell in Europe and North America last quarter, another indicator that high prices have cut into chocolate demand. Protests continue in Cameroon after President Paul Biya secured an eighth term in office this week. World Weather Inc says periodic rain will continue to fall from southern Ivory Coast through southern Ghana and Nigeria to Cameroon. Resulting rainfall will be mostly light to moderate with a slight chance for heavier rainfall periodically in southeastern Nigeria and Cameroon. They maintain that  precipitation will all be welcome and so will be the net drying that occurs in northern production areas, which is normal for this time of year. ICE stocks fell 8,493 bags yesterday to 1.828 million, the lowest since March 28.

COFFEE

December Coffee opened higher overnight but fell back inside yesterday’s range. The market has come under pressure since putting in a contract high last week on hopes that the US and Brazil will come to an agreement that would result in the US lifting the 50% tariff on Brazilian imports. The weather has turned favorable for Brazil’s upcoming crop this week, with enough rain in the forecast to even out flowering and pollination and get cherry setting and early development back on track, according to World Weather Inc. Rabobank expects Brazil’s 2025/26 coffee exports (July/June) to around be 39-41 million bags, down from 45.6 million in 2024/25. Reuters reported that trading activity in Vietnam remained subdued this week as traders awaited the bulk arrival of new beans from the ongoing harvest, which is expected to start in mid-November. There are concerns that the recent rainfall is disrupting the peak harvest. ICE certified stocks fell 3,140 bags yesterday to 446,475, their lowest since March 11, 2024.

COTTON

After reaching a one-month high yesterday on optimism that the meeting between President Trump and Chinese President Xi talks would produce a major trade deal, the market came away a little disappointed over the lack of specifics on soybean commitments, and this spilled over to the cotton market as well. December Cotton is still higher on the week and is seeing volatile action today. Traders were perhaps hoping for some sort of commitment to buy cotton. The fact that the two sides are talking lowers anxiety over global trade. As of September 18 China had committed to buying just 69,539 bales for the 2025/26 marketing year versus 461,850 at that point last year and 1.625 million the year before that. China’s crop appears to be in good condition, which could limit their needs. They have also switched to buying Brazilian cotton in recent years. In 2024/25, China bought a total of 690,197 bales from the US, down from a peak of 5.079 million in 2020/21. World Weather Service says recent heavy rains in central India could cause for some cotton quality issues, but it will not necessarily lower production. West Texas saw temperatures in the upper 20s and low 30s Fahrenheit early yesterday and likely today as well, which will end the growing season. No damage is expected to unharvested crops, and the cold could expedite maturity. A few cotton bolls not treated with chemicals may not have fully opened and may be subjected to boll lock.

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