Export Sales Just Not Enough

COTTON

March Cotton continues to chop around, being supported from time to time on better than expected export sales and a weaker dollar but being undermined by abundant supply and significant demand uncertainty. US export sales continues to lag behind previous years, with China and India backing off after making some significant purchases while they were involved in trade talks with the US. The dollar was lower again early Tuesday, which offers some support on the idea that it makes US cotton more competitive on the global market.

COCOA

March Cocoa was near unchanged early Tuesday as traders assessed Monday’s technical setback against uncertainty over the state of the West African crop. Monday’s Ivory Coast arrivals number showed an improvement over the previous week, which added to optimism about the production pace. Ivory Coast farmers were also positive in their assessments, telling Reuters that above-average rainfall and sunny spells across most of the main cocoa-growing regions last week would boost the main crop in both size and duration. They noted abundant small cocoa pods on trees, which require adequate moisture to develop until March. Rains have been better than normal for this time of year.

COFFEE

March Coffee extended its recent selloff early Tuesday and was approaching the spike low from early November. Brazil’s coffee exports appear to be gradually recovering from the tariff shock from earlier this fall. That November low came in the wake the lifting of the US tariff on Brazilian imports on what was likely short covering on bearish bets, or the lifting of hedges once US buyers saw the opportunity to rebuild inventories. In the meantime, there have been some improvement in expectations for Brazil’s 2025/26 crop, and favorable rain is improving the outlook for 2026/27

SUGAR

March Sugar was near unchanged early Tuesday inside Monday’s range. We are awaiting the latest report from UNICA about Brazil Center-South sugar production for the second half of November. The previous report showed sugar production totaled 982,000 metric tons during the first half of November, up from 904,000 for the same period last year.

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