Cotton Gets Outside Market Support

COTTON

May Cotton was higher overnight but the overall trend in the market is soft. Technical traders saw the failure to push above the 50-day moving average last week as a  bearish indicator, and fundamental traders saw a market unable to attract buyers. Traders are worried that the upcoming tariffs will cause China to cancel commitments for US cotton purchases, but China has already canceled 88,407 bales over the past two weeks. They have  only 155,348 bales outstanding versus 1.9 million a year ago and a five-year average of 1.3 million for this point in the season. This does limit exposure to further cancellations. Cotton received some support overnight with the a lower dollar and crude oil reaching its highest level since March 3.

COCOA

A forecasted 40% decline in Ivory Coast mid-crop production has put the brakes on the selloff in cocoa from their all-time highs in December. Ivory Coast farmers interviewed by Reuters said this week that more rain is needed to strengthen the mid-crop after prolonged sunshine and below-average rainfall fell across most growing regions last week. World Weather Service says rain fell on most cocoa areas at one time or another during the weekend with light to moderate amounts most common and heavy rain in portions of Cameroon. Portions of southeastern Nigeria were left dry. Regular rounds of showers and thunderstorms are expected through the next week in Ivory Coast, Ghana, and southern Cameroon, and conditions should be mostly favorable. ICE certified cocoa stocks increased fell 622 bags yesterday to 1.794 million. This was only the second time in 13 sessions that stocks fell.

SUGAR

May Sugar was higher overnight but was still under the influence of a two day selloff. Dry conditions in Brazil and uncertainty over India’s supply have lent support, but the market’s failure convincingly to push the 20-cent level last week made recent bulls nervous. The Brazilian crop harvest should be starting soon. The Brazilian real has suffered a three-day setback after reaching its highest level since October last week, and this may have also sparked some selling in sugar on ideas it would make Brazilian producers more interested in offering sugar for export.

COFFEE

Drier than normal conditions in Brazil have kept a bid under the coffee market after a move to all-time highs last month. Exceptional drought in Brazil last year had already lowered expectations for the 2025 crop. World Weather Service expects periodic rain through the next week to ten days, but they also expect it to be light and sporadic and not enough to keep soil moisture concerns at bay. Near term crop conditions could improve slightly, but more is needed. ICE certified arabica stocks increased by 1,925 bags yesterday to 779,633 after falling to their lowest level since February 19 on Friday.

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