Cocoa Main Crop Faces Dry Spell

COCOA

December Cocoa was higher early Monday. Rainfall patterns in Ivory Coast and southwestern Ghana remain light enough to raise concerns about main crop production. Ivory Coast cocoa arrivals were estimated at 16,000 metric tons for the week ending September 27. This was the same as the previous week, bringing the total for the 2026/27 marketing year so far to 36,500 tons. Ivory Coast started their marketing year on September 1, one month earlier than normal, as they were wanting to prepare for the new reporting methods designed to meet EU deforestation rules. As of October 4 last year (the first week), cumulative arrivals were 13,000 tons. The five-year average for the first week is 54,600. The Ghana Cocoa Board (COCOBOD) officially began its marketing year on Friday, and it increased the producer price of cocoa for the 2026/2027 cocoa season to 42,400 cedis per metric ton (US $3650). Ivory Coast is paying its farmers a state-guaranteed price of 1,200 CFA francs per kg  (US $2080 per ton) for their 2026/27 main crop. The disparity in prices raises the possibility of farmer smuggling from Ivory Coast to Ghana. World Weather Inc. said rain in Ivory Coast and parts of Ghana was sporadic over the weekend. Many cocoa production areas were either dry or experienced net drying conditions. No change in the pattern is expected for the next 7-10 days.

SUGAR

March Sugar saw choppy traded early Monday as the market weight tight supplies against a burdensome net long held by the funds. Underlying support comes from lowered expectations for global supply in light of drought in Europe this summer, el-Nino-inspired reduced monsoon rainfall in India, and excessive rains in Brazil that have disrupted harvest and cane crushing. In India, the Maharashtra government has decided to begin the sugar-crushing season on October 15, two weeks earlier than usual. This is facing blowback from farmers’ associations on concerns that starting harvest before crops have reached full maturity will result in lower yields, which are already under stress due to the uneven monsoon this year. The central government is anxious to insure adequate supplies ahead of Diwali, which begins in November, especially after domestic retail prices reached record levels in August. The government has also allowed the import of 1 million metric tons. India’s monsoon season is set to officially end this week with precipitation below 90% of the long-period average, and this is expected to affect yields on several crops, including cane. The government said over the weekend that drought had hit three-quarters of Maharashtra, which is the second largest sugar-producing state. Last week, a survey of analysts by S&P Global put Brazil center-south sugar production for the first half of September at 2.09 million tons, down from 46% from for the same period last year.

COFFEE

December Coffee was near unchanged early Monday following a strong rally on Friday that took the market to its highest level in a week. After a 71.25-cent, 21% decline from near contract highs in just one month, the market had become short-term oversold. Last week, Conab raised its forecast for Brazil’s 2026 coffee production to a record 67.6 million bags, up from a previous forecast of 66.7 million, but the market avoided any steep selloff from that news. Arabica production was increased to 48.2 million bags from previous estimate of 45.8 million, up 34.8% from 2025. Active harvest and exports in Brazil eased have what had been historically tight supplies. ICE certified arabica stocks saw a 40,000-bag increase from 26-year lows for the week ending September 18, but they leveled off last week. Stocks were unchanged on Friday at 254,304 and were down 4,111 bags for the week. World Weather Inc. says Brazil experienced net drying during the weekend and that will continue through Tuesday and then a new bout of frequent rain will begin that will last at least a week. Good rains have gotten the 2027 crop off to a prompt start, but follow through rains are needed to ensure pollination. Parts of Indonesia reported significant rain over the weekend, and a slow shift in rainfall to the south through the archipelago is predicted over the next two weeks, but it will take a significant amount of time for rainfall become great enough again to restore normal soil moisture. El Nino environments do not usually support a return to rainy weather in the fourth quarter, which typically leads to worsening drought.

COTTON

December Cotton saw choppy action early Monday but turned lower as the session progressed. News that cotton was not on the list of US agricultural goods that China was lowering tariffs for may have encouraged some of the selling. The US dollar is hovering around 18-month highs, which raises concern over US export prospects. The nearby dollar index reached its highest level since July 29 last week but backed off slightly from those levels. A strong US export sales report last week offered modest support but not enough to break out of a week-long consolidation. Higher oil prices overnight may lend support on ideas it makes polyester more expensive to produce. World Weather Inc. says west Texas and the Texas Blacklands will not be impacted by excessive rain. Some temporary discoloring of cotton fiber may occur as additional rain falls, but better weather is expected next week. Rain is also possible in the Delta later this week and into the weekend, but no excessive rain is expected and the impact on crops should be low. Xinjiang, China weather has become a little unsettled with periodic showers raising a little fiber quality concern.

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