ADMIS News
SUGAR
October Sugar was lower early Thursday after rallying to its highest level since May 21 on Wednesday. Czarnikow is now projecting a modest global sugar deficit of 600,000 metric tons for 2026/27 versus a surplus of 1.4 million forecast in May. World production was lowered to 178.5 million tons from 179.0 million previously. EU production was lowered to 13.9 million tons. Dry weather remains an issue for some major global producers. World Weather Inc. says southern Indonesia is steady drying and there is not much reason to expect change in the next two to three weeks, which could lead to stress for short-rooted crops like sugar cane. Southern India is unlikely to see much rain for the next two weeks, which will stress crops. And conditions are not expected to improve significantly in western Europe. Some showers are expected late this week into next week that should reduce the heat and bring a little moisture to a few areas, but aside from that not much more is expected.
COFFEE
September Coffee was higher early Thursday, but was in the lower end of the extremely wide range from earlier this week. That rally took the market back to the October highs, when the US tariffs on Brazilian coffee imports basically halted supply to the US. The market had been expecting a very strong crop this year, but heavy rains in June slowed harvest progress and raised concerns about the condition of the crop. Cooxupe, Brazil’s largest coffee co-operative, said on Wednesday that its farmers had harvested 30.9% of their 2026 crop as of July 3 versus 40.4% at this point last year. This is the lowest for this point in the season back to at least 2018, when they started reporting the data. There could be problems with quality with some beans having fallen to the ground in the June rains. Near term supplies remain tight, with ICE certified arabica stocks down 8,205 bags on Wednesday to 354,261, their lowest since February 29, 2024.
COCOA
September Cocoa was higher early Thursday and was holding in the upper end of Wednesday’s range. The market has drawn heavy support this week off concerns that El Nino will lower production this year. The previous event caused problems with west African crops that eventually led to a tripling of prices, and this is fresh in traders’ minds. This year’s event is being described as a “Super El Nino,” but that does not necessarily mean it will produce the type of extreme event that the market seems to fear. So far it appears that crops are in good shape. On the other hand, the nearby contract has not even reached the 38.2% retracement of the selloff from all time high from 2024 to the low in March, so there seems to be room for further gains as the market waits for El Nino to do some damage. The second quarter grind numbers are due to be released on July 16.
COTTON
December Cotton is down for the second straight day after reaching its highest level since early June on Tuesday. The market saw a boost this week on a second straight week of declining crop conditions in the US, but it also faces a USDA supply/demand report on Friday that is expected to show an increase in production despite the crop problems. The market also rallied in knee-jerk fashion off the crude oil rally, but the relationship there is tenuous. Higher crude prices make polyester more expensive, but they also threatened global economic strength, which is key to textile buying. Recent rains have improved the outlook for parts to the southeastern US, and the Delta look decent as well. West Texas remains dry. World Weather Inc. says West Texas rainfall will be restricted, although not absent during the next two weeks.
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