Export Sales Trifecta?

COTTON

March Cotton was near unchanged on Thursday, following a two day rally off new contract lows. The weaker dollar and higher crude oil prices lend support on ideas that US cotton would be more competitive in the global market and that higher oil price make polyester more expensive relative to cotton. Cotton prices collapsed earlier this week despite having seen two weeks of strong export sales, but as has often been the case during the market long slow decline, buyers stepped in on the lower prices. The trade will be looking towards this week’s export sales report today to see if they can make it three in a row above 300,000.

SUGAR

March Sugar edged lower early Thursday and fell to its lowest level since January 15. The market has been trading in a narrow range for the past two weeks as it hovers around two year lows. 2025/26 has been a strong production year, especially in Thailand and India, and in return, the nearby contract has given back 50% of its value from its 2028 high at 28.14. Low prices may be discouraging production and encouraging a switch to crushing for more ethanol. However, there may be some pressure from India if world prices get high enough. Brazilian sugar and ethanol producer Raizen reported 10.6 million metric tons of sugarcane crushed in the third quarter of the 2025/26 crop (which would be the fourth quarter of the 2025 calendar year),  down about 23% from the same period a year earlier. Sugar production was the equivalent of 1.5 million tons, down nearly 17% from the previous year. Recent UNICA data showed Brazil Center South crushing in the quarter was down 0.15% from the same period a year earlier and that sugar production was down 0.64%. The extreme cold this week could damage the Louisiana cane crop, but it will take time to determine the extent of the damage. More cold is coming this weekend, which could affect Florida production as well. The crops have time to recover if they get good rains in the following weeks. The US does not export sugar, and its production is on the margins of the global market, but severe damage to the crop could require the US to increase its imports. World Weather Inc. expects a quick transition from La Nina to El Nino this spring, which could have a depressing effect on monsoon rainfall in India and Thailand this summer.

COFFEE

March Coffee edged lower early Thursday after a reversal on Wednesday that saw the market gave back all of its gains from the previous session and then some. A sharp rally in the Brazilian real this week sparked ideas the Brazilian producers were reluctant to sell product for export. The real continued its rally on Wednesday to its highest level since last May but ended up closing lower on the day, which may have encourage some of the selling in coffee. Safras & Mercado recently reported that Brazilian growers had sold 76% of their 2025/26 crop as of January 20 versus 85% a year prior, but much of this was blamed on the US tariffs this past fall. The Brazilian crop arabica crop was smaller in 2025/26, but it is expected to be higher this year, as the weather has been decent and this is considered the “on-year” in the biennial cycle. Starbuck’s reported US same-store sales increased 4% for the three months ending December 28, returning to growth for the first time since late 2023. Global same-store sales also increased 4%.

COCOA

March Cocoa was close to unchanged early Thursday after testing Friday’s contract low on Wednesday. At Friday’s low, the nearby contract had given back 70% of its gains of the rally from its low at 674 from December 2000 to its all-time high at 12,931 from December 2024. It had also fallen very close to the previous high for the market from 2011 (at 3826) that had existed prior to the breakout in 2023. The market has seen heavy selling in recent weeks off lower than expected grind data and from indications of a supply backup in west Africa. New problems in the West African cocoa sector are emerging as price regulators in Ivory Coast and Ghana struggle to keep up with the volatile price action. The rally to all-time highs in 2024 saw the regulators unable to pay growers anywhere near the spot price because they had already priced in their sales at lower levels. This encouraged smuggling and discouraged growers and only made a tight supply situation worse. This year the regulators raised the prices paid to growers, which succeeded in encouraging farmers sales, only to leave them facing buyers reluctant to pay the higher prices as supplies came in. Ghana’s cocoa regulator COCOBOD is reportedly looking at taking out international syndicated loans after a self-financing experiment left farmers unpaid. They had adopted a new funding model in 2024 that required global traders to pay upfront for part of the cocoa bean shipments, but global traders have been reluctant to make payments upfront, thus a buildup in unsold beans. The Ivory Coast government said that it intends to help that nation’s cocoa regulator, the CCC, negotiate a $500 million loan to purchase about 100,000 tons of beans from farmers. West Africa is turning drier as the Harmattan wind is finally showing its face, but so far there has been little concern about crop conditions.

Interested in more futures markets?  Explore our Market Dashboards here.