ADMIS News
The Ghost in the Machine: Q3 2026 Macro Outlook
September 28, 2026
COTTON
December Cotton reached its highest level since September 29 early Wednesday, with the market drawing support from expectations of a slowdown in harvest and reduced fiber quality due to of rains. The market may have be drawing support from higher energy prices today and from a setback in the dollar after reaching its highest level since April 2025 earlier this week. The USDA weekly Crop Progress report showed 34% of the US cotton crop was rated good/excellent as of October 11, up from 33% last week but below the five-year average for this date at 40%. Texas was 19% G/E, up from 15% last week but down from the five-year average at 27%. Georgia was 52% G/E, down from 55% last week and right at the four-year average. The report also showed 31% of the crop had been harvested as of October 11 versus 23% last week and the five-year average at 28%. The crop had 82% with bolls open versus 74% last week. World Weather Inc. said US cotton quality was compromised in the southeastern states, Arizona and southern California recently by rain. Similar conditions are anticipated for West Texas and southwestern Oklahoma over the coming ten days. The Delta crops have been kept in the best condition. Drying is likely for the Delta and southeastern states as well as the far southwest through much of the coming ten days.
COCOA
December Cocoa reached its highest level since September 17 overnight as dryness in West Africa have traders concerns about the late main crop and the mid crops for 2027. The rainy season normally ends in November, so the region may be running out of time to recharge soils. World Weather Inc. said rain increased in Ivory Coast and Ghana Monday with light to moderate. An erratic rainfall pattern is predicted during the next week to ten days. Temperatures will be warm biased which will keep evaporation rates strong when rain is not falling. Ivory Coast and southwest Ghana are most in need of rain. Wet conditions in Ecuador are also a concern. El Nino is getting the blame for these anomalies. The US NOAA model has been suggesting the El Nino pattern may have peaked recently and will begin to weaken, but the Australia Bureau of Meteorology model is still suggesting the peak will be in November or early December and that there is not much reason to anticipate any sustainable weakening for another several weeks. Third quarter grind numbers for Europe, Asia, and North America are scheduled to be released October 15.
SUGAR
March Sugar was approaching the contract high from October 7 early Tuesday. Weather-related crop problems in Europe, India, and Brazil this year have tightened the supply demand setup, supporting the move higher. Rain in Brazil is expected to further delay the cane harvest and leave more left over for next year. The ample moisture also reduces the sugar content in the cane. France’s farm ministry just cut its forecast for this year’s sugar beet production outlook to 25.3 million tons from 25.4 million estimated in September. This would be down 30% from last year and the lowest in ministry records dating back to 1980. Harvesting just getting underway. As of last Tuesday, the managed money net long was 257,364 contracts, within 30,000 contracts of the record, which leaves the market vulnerable to heavy selling if support levels are taken out. US NOAA models are suggesting El Nino has already peaked, but World Weather Inc. and the Australian models do not agree. They still call for El Nino conditions to peak in November and subside into February.
COFFEE
December Coffee may be drawing support off the drawdown in ICE exchange stocks, which is occurring despite reports of strong exports out of Brazil. ICE certified arabica stocks were down 3,315 bags on Tuesday to 246,856, their lowest since September 16. Brazil-origin stocks totaled 71,882 bags, which was near the highest they had been since February. The amount pending grading is around 26,000 bags, the highest since September 17, and all of them are Brazil-origin. Brazilian weather in Brazil continues to support new crop development, though northern growing areas are a bit short. World Weather Inc. says ample rain will fall during the next week in Mexico and Central America to support crop development. The Brazilian real was a little lower on Tuesday but held most of its gains from last week, and the stronger currency lowers the incentive for Brazilian producers to sell for export.
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