ADMIS News
The Ghost in the Machine: Q3 2026 Macro Outlook
September 28, 2026
COFFEE
The gap in December Coffee at 322.15 still poses an enticing upside target despite the failure to close it this week. Another drop in exchange stocks on Thursday may also elevate concerns about near term supply. ICE certified arabica stocks fell 5,315 bags Thursday to 234,433, their lowest since September 16. The trade is still waiting for a surge in Brazilian export to be reflected in exchange stocks. A strong Brazilian real is viewed as supportive to coffee on ideas it lowers the incentive for exporters to aggressively sell their product. A win by conservative candidate Flavio Bolsonaro in the Brazilian presidential election this weekend would be viewed as supportive for the real. Rains are moving across Brazil’s growing areas, but they favor the southern regions for the most part and leave northern areas a bit short. This has a bearing on upcoming production.
COCOA
December cocoa was lower early Friday as the market’s limited response to the strong grind data from last week seems to have disappointed the bulls. Steady increases in exchange stocks suggest ample old crop supply. El Nino could present challenges to production in the coming months, but there was a modest improvement in West African rainfall this week. Conditions may turn drier over the next week, however. World Weather Inc. says shower activity will be sporadic and often light and that many central and northern areas will dry down. Southern areas will be wetter with the greatest rain near the coast. Indonesian Cocoa Association data showed that nation’s cocoa grind totaled 112,628 metric tons in the third quarter, up from 110,410 in the second quarter. Production this summer has been pressured by drought. ICE cocoa stocks increased by 20,606 bags on Thursday to 3.656 million, the highest since May 29, 2024. There are 154 bags from Ivory Coast pending review, the first since June.
COTTON
December Cotton was lower early Friday, apparently seeing pressure as generally dry conditions in US cotton growing regions supports an active harvest pace. The US dollar was higher early Friday, which also pressured cotton on ideas the strong currency hurts US export prospects. Higher crude oil may support cotton on ideas that it increases the cost for polyester, but higher shipping costs due to soaring diesel prices may suppress demand. Thursday’s USDA export sales report showed US cotton sales for the week ending October 15 at 199,629 bales for the 2026/27 (current) marketing year and 1 bale for 2027/28 for a total of 199,630. This was up from 154,074 the previous week but the second lowest in the past five weeks. Cumulative sales for 2026/27 have reached 5.449 million bales, up from 4.747 million at this time last year and below the five-year average of 6.465 million. Sales have reached 47% of the USDA forecast versus a five-year average of 55% for this point in the marketing year. Shipments totaled 196,366 bales, up from 140,561 the previous week.
SUGAR
March Sugar was higher early Friday after bouncing off support around the 20-cent level. The market has been consolidating inside a 20.00-21.29 range since breaking out to a new contract high earlier this month on concerns over global production, including Brazil. UNICA is expected to release its update for Brazilian center-south sugar production through the end of August on Friday, but the Brazilian Ag Ministry has already released data for the second half of September on October 15. That report showed production down 6% a year earlier to 2.86 million metric tons. World Weather Inc. expects rainfall to increase in Parana and Sao Paulo over the next few days with Saturday and Sunday the wettest. Some lighter and less frequent rain is expected next week before it increases once again. Rains have delayed harvest and reduced sugar output this season, and traders are worried that a continued wet pattern could bring an early conclusion to the 2026/27 crushing season. The Indian government has extended the deadline for allowing duty-free imports of 1 million metric tons of raw sugar to December 31 from a previous deadline of October 31. The fact that they have continued to extend the deadline suggests that demand is being met and the urgency has eased.
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