Cocoa Weighs Weather Risks

COCOA

December Cocoa was lower early Thursday as it continued its sideways choppy action. The weather in West Africa is not necessarily threatening but it on the dry side. The trade is watching this situation closely on concerns that the “Super El Nino” will bring abnormally dry conditions to the region that would pull down production. World Weather Inc. says rain fell on some southern coffee areas of  Ivory Coast and Ghana this week. They expect Southern Cameroon to be the wettest through the next week, but rains Ivory Coast, Ghana and Nigeria will be more sporadic. Some areas may experience net drying, although nearly all plantations will see rain at one time or another.  ICE cocoa stocks increased by 6,014 bags on Wednesday to 3.635 million, the highest since May 30, 2024, which does indicate ample current supply and may limit gains unless the weather shifts dramatically.

COTTON

December Cotton was lower early Thursday following a rally on Wednesday that took the market back to last week’s highs. The export sales report today showed US cotton sales for the week ending October 15 at 199,629 bales for the 2026/27 (current) marketing year and net sales of 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. The largest buyer was Vietnam at 94,483 bales, followed by Bangladesh at 34,223 and Turkey at 337,731. China canceled 3,509 bales.

COFFEE

December Coffee was lower early Thursday on what could be technical disappointment with the market’s failure to close a gap from August 26. ICE certified arabica stocks increased for a change on Wednesday, by 4,847 bags to 239,748, but they are still very low. The Brazilian real is chopping back and forth ahead of the nation’s presidential runoff election on Sunday. The real jumped in value  when the conservative Bolsonaro came out ahead of the incumbent in the initial tally. A strong currency tend to support coffee prices because it reduces the incentive for Brazilian exporters. Brazilian weather is generally conducive for new crop growth, if a little on the dry side in northern growing areas. World Weather Inc. expects an increase in precipitation is from Parana to Sul de Minas during the next several days, with some moderate to heavy rain possible. Most areas will be impacted by rain at one time or another, but northern production areas in Bahia, northern Minas Gerais and northern Espirito Santo are not expected to see a generalized rain pattern, and some production areas will be drying down.

SUGAR

March Sugar was slightly lower Wednesday but still in that 20-21 cent range it has held since October 5^th. The market has seen support this month off concerns about production in Brazil, as heavy rains have interrupted harvest and crushing activity and reduced the amount of sugar in the cane. This has raised the possibility of an early end to the crushing season. This week Green Pool Commodities increased its global supply deficit forecast to 6.28 million metric tons from a previous estimate of 3.3 million. More heavy rains expected in Brazil next week would continue to cause problems with harvest and crushing, but it appears the main growing areas will avoid the heaviest amounts. Local flooding possible in southern Mato Grosso do Sul and Parana. Parana represents about 8% of Brazilian cane production and Mato Grosso do Sul 3%. Left out of this list was the Sao Paolo, which is a further north and represents about 60% of production, as well as Minas Gerais, which represents about at 7%.

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