Sugar Pressured by Surplus

SUGAR

March Sugar was lower early Friday and was back in the vicinity of Monday’s low as well as the contract low from November. Speakers at the Dubai Sugar Conference this week forecasted another global sugar surplus for 2026/27 but not as big as the one in 2025/26. The one caveat is the possibility that the arrival of El Nino this spring or summer could lower monsoon rainfall amounts in Southeast Asia and in India and lower expectations for the cane crops there. Last summer’s strong monsoons contributed to the large production this year. Tereos forecasted EU sugar beet planting area to decline 6-7% from last year to its lowest level in about a decade. Czarnikow said it expects EU planting to decline 5% and for sugar production to fall to 15.5 million metric tons from 17.1 million tons in 2025/26. Brazilian sugar companies have hedged around 38% of their expected exports for the 2026/27 season versus  72% at this time last year, risk advisory Archer Consulting said on Thursday.

COCOA

March Cocoa traded inside Thursday’s range early Friday and was in the vicinity of Monday’s contract lows. The market may be trying to build a base from its lows, but the question remains whether buyers will step in at current levels. Reports of large supplies of unsold cocoa in Ivory Coast and Ghana sent the market tumbling early this week. Ivory Coast’s regulator, the CCC, plans to purchase 20,000 tons per week of surplus stocks. There is an urgency to their buying due to concerns about spoilage. Exporters have refused to pay the official farmgate price. They have agreed to buy up to 100,000 tons overall. There were also suggestions that Ghana is running into the same problem. World Weather Inc. says that cocoa production areas of Ghana, Nigeria and Ivory Coast will see a more normal weather pattern for this time of year over the next two weeks, with only a few infrequent coastal showers and warm temperatures. The Harmattan wind will continue to be light, and temperatures will be warm but not excessively hot over the next week.

COFFEE

March Coffee was hovering around Thursday’s six-month low early Friday as the market remained under pressure following its break below as consolidation pattern this week. Several groups have forecast a sharp increase in Brazilian production for the harvest set to begin this spring. Conab put the nation’s total coffee output at 66.2 million bags, +17.1% from the previous year, with arabica production at 44.1 million, up more than 20% from 2025, citing the “on-year” the biennial cycle. They look for robusta production to total 22.1 million, an increase of 6.4%. They credit favorable weather throughout the crop cycle, as well as the adoption of technologies and good management practices in the fields. The Brazilian brokerage firm EISA is projecting the crop to reach a record 75.8 million bags, which is near the top of recent estimates. They put arabica output at 48 million bags and robusta at 27.8 million bags.  Brazilian government data showed Brazil exported 2.35 million bags of green coffee in January, down 42% from January 2025. Vietnam exported 198,000 metric tons of coffee in January, up 38% from a year earlier, government data showed on Friday. World Weather Inc. expects frequent shower and thunderstorm activity in Brazil’s coffee region through the coming week. All production areas will be impacted at one time or another and sufficient amounts will occur to support long term crop development.

COTTON

March Cotton was slightly lower early Friday following a sharp decline to a new contract low on Thursday. Thursday’s Export Sales report showed USDA cotton export sales were back above 300,000 for the third time in four weeks, but that provided little support. There seems to be a trend of better sales developing. However, a large portion consisted of new-crop sales. The buying was spread out across several countries, with Vietnam, Malaysia, and Pakistan all above 50,000 bales. The trade is not anticipating many revisions for the USDA supply/demand report on Tuesday. World Weather, Inc. says rain will soon fall in New South Wales, Australia, offering some relief to recent dryness. Cotton conditions should improve, although it is unclear how much impact the recent hot and dry conditions have had on production. Queensland is unlikely to get much moisture and its western dryland crop has struggled with dryness most of the growing season possibly resulting in lower production. South Texas and northeastern Mexico need rain to support planting in early March. West Texas recently benefited from snow and the moisture that resulted from it, but more moisture is needed in the region. Some showers may evolve in West Texas briefly late next week. The US drought monitor showed an area representing roughly 80% of US cotton production was experiencing drought as of Tuesday, unchanged from the previous week.

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