Brazil Crop Outlook Pressures Coffee

COFFEE

May Coffee was mostly higher early Thursday but the market was confined to Wednesday’s range down action. Another indication that the market becoming convinced of a strong Brazilian crop came with projections buy coffee trading firm Comexim for the 2026/27 coffee crop to come in at 71.1 million bags, up from 63.2 million in 2025/26. Arabica production was projected at 46.6 million bags versus 37.7 million bags in 2025/26. The firm expects the harvest to start earlier than normal this year, around late April or early May. They added that the large crop in Brazil will tip the global supply/demand balance into a surplus. Reuters reported that coffee prices fell in Vietnam fell this week as farmers released more beans on fears of further declines and that fresh supplies from Indonesia had begun to arrive. Concerns that prices could fall further due to the Middle East conflict may have added to the urgency on their part.

COCOA

May Cocoa was lower early Thursday after reaching its highest level since February 19 on Wednesday. A Reuters poll of traders and analysts this week called for a global surplus of 308,000 metric tons in the 2025/26 season versus 62,500 tons for 2024/25. Ivory Coast production was expected to rise to 1.8 million tons in 2025/26 from 1.68 million in 2024/25 and Ghana’s output was expected to at 630,000 tons versus 590,000 tons. Ecuador production was forecast at 622,500 tons in 2025/26 versus 572,500 in the prior season. The market had seen a steady increase since putting in a contract low on March 2 after Ivory Coast and Ghana lowered official farmgate prices in an attempt to get their backed up supplies sold.

SUGAR

Yet another sugar analyst has cut their expectations for the global sugar surplus for 2025/26 due to lower production expected out of India. Several analysts have revised their expectations based on India’s forecast. The steep rally in energy markets since the start of the Iran war have brought speculation that Brazil would boost ethanol production from cane at the expense of sugar. To date, most are calling for steady sugar production for 2026/27 despite an expected increase in the cane crop. The longer crude oil (and gasoline) maintain their upward track, the more pressure on crushers to produce ethanol.

COTTON

May Cotton was higher overnight but inside Wednesday’s range. The market on Wednesday reached its highest level since February 26. The market has been supported by elevated crude oil prices on ideas that this makes man-made fibers more expensive, and it may also have found support in resilience in the stock market which bounced from six month lows on Monday. The war with Iran is a mixed bag for cotton because high crude prices put upward pressure on polyester, but extremely high energy prices also threaten to undo the global economy, which is not good for textile consumption overall. Cotton is also attempting to bid for acres ahead of the growing season. The first official surveyed data of planters intentions will be released on March 31. The survey is conducted in the first two weeks of March. The trade will be looking to the export sales report this morning, the first report covering activity sine the Iran war started.

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