Cotton Climbs Ahead of USDA Report

COTTON

May Cotton extended last week’s rally early Monday to its highest level since September. Dry conditions in Texas and much of the US cotton growing region raise concerns about the upcoming crop. Higher oil prices raise fertilizer prices as well as the cost of a competing product, polyester. Nonetheless, the rally today is impressive as it is coming ahead of the USDA Prospective Plantings report tomorrow. The trade is looking for a drop in plantings this year, but one would have thought that those expectations were already baked into the priced. World Weather Inc. said today that west Texas precipitation will be minimal for the coming week, but “some” showers are possible next week and that rainfall is in south Texas next possible next week and the regain may see a few strong thunderstorms the second week of April. The US Drought Monitor on Thursday showed an area representing 91% of US cotton production was affected by drought as of March 24, up from 89% the previous week and 36% a year ago. For the Prospective Plantings report on Tuesday, on the Reuters poll has an average expectation for US 2026 cotton plantings at 9.229 million acres, with a range of 9.000-9.635 million. This would be down from 9.283 million in 2025 and 9.400 million from the Outlook Forum from February.

SUGAR

May Sugar traded to its highest level since October 8 early Monday, as higher crude oil prices continue to support the theme that cane crushers will be incentivized to focus more on ethanol and less on sugar production. That tendency was apparent in Unica’s update on Brazil Center-South sugar production on Friday, but that trend has been going on for several months. The report showed cane crush for the first half of March at 1.309 million metric tons, down from 1.861 million a year ago but up from 0.361 million during the second half of February. Sugar production totaled 6,000 tons, down from 53,000 a year ago but up from 1,000 for the second half of February. Crushing activity is gearing up for the new marketing year, which officially begins April 1, but at a slower pace. Cumulative crush for 2025/26 has reached 603.67 million tons versus 617.32 million at this point last year, down 2.2%.  Cumulative sugar production has reached 40.25 million tons versus 39.97 million at this point last year, up 0.7%. Ethanol production came in at 463 million liters in the first half of March, up from 443 million a year ago and up from 371 million for the second half of February. Cumulative ethanol production has reached 32.97 billion liters, down from 34.41 billion a year ago (-4.2%). Sugar’s share of the crush was 4.9% during the first half of March versus 30.1% for the same period last year. Back in August the share was 55%. There were 4.60 kilograms of sugar produced per ton of cane during the first half of March versus 28.38 kilograms a year prior.

COCOA

May Cocoa has been trading in narrow daily ranges over the past few weeks but there has been a general drift lower, with good growing conditions in west Africa and apprehension about demand trends. First-quarter European and North American grinding data is scheduled to be issued on April 16, and that will offer a clue as to whether low prices have started to encourage consumption. Ghana and Ivory Coast lowered officially farmgate prices in recent weeks, but reports of farmers still going unpaid in Ghana and unsold supplies remaining in Ivory Coast suggest that the marketing crisis is not over. World Weather Inc said over the weekend that it expects west-central African cocoa areas to get frequent rain in the next ten days. ICE cocoa stocks increased 4,623 bags on Friday to 2.357 million, their highest since July 25. Stocks increased by 30,851 bags last week.

COFFEE

May Coffee continued its selloff from last week’s highs early Monday with good crops expected in Brazil and concerns about the war in Iran diminishing demand prospects for the Middle East. Brazil’s largest coffee cooperative Cooupe said on Friday that expects to receive a total of 6.8 million bags from its members and third parties this year, up nearly 12% from 2025. It also expects to export 5 million bags in 2026, up from the 4.4 million bags it had estimated the previous week. They also said their stocks are almost depleted. The group has apparently scrapped plans to store coffee in Saudi Arabia due to the war. World Weather Inc. said over the weekend that periodic shower and thunderstorm activity is expected in Brazil coffee areas through the coming week to ten days. Most production areas will get rain at one time or another, and a seasonable temperature distribution, should be good for crop development.

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