Rain Reaches US Cotton Belt

COTTON

July Cotton was lower early Wednesday as the market continued to consolidate inside last week’s range following a move to new contract highs. Rainfall this week across much of the US growing region offers relief to a crop threatened by widespread drought. Planting season is just starting, and rain is sorely needed. As of last week some 98% of production was in an area under drought. World Weather Inc. said on Tuesday that rain was expected in West Texas and eastern New Mexico Thursday and Friday and that they may see 1 to 2 inches, possibly more. The Delta may see heavy rain and possible flooding later this week and into the weekend. Drought relief is likely, but too much moisture could lead to a some damage. The southeastern states are expecting a little relief as well during the coming week, but more rain will be needed. The advent of rain could start to alter the bullish viewpoint that has dominated the market for the past two months. The rally may have bought back acres as well. Planting progress is close to if not slightly ahead of the five-year average. Higher crude oil prices overnight offer some support.

COCOA

July Cocoa was higher early Wednesday, as the market continued to trade back and forth in a narrow range. Reuters reported that a survey of Ivory Coast farmers showed that 25% of them had secured some of fertilizer they needed for upcoming crops but only 2% said they had all they needed. Evan MacHattie, an executive at HSAT and one of the organizers of the survey expressed concern that low fertilizer usage, coupled with poor tree health already being in the region and the high probability for El Nino to arrive this summer could create a supply problem in the second half of the year. HSAT projected an impact of 4.8% for Ivory Coast cocoa production later this year. El Nino is expected to arrive in June, but World Weather Inc. said it will likely take time for its effect on the climate to manifest. World Weather Inc. expects routine showers and thunderstorms to impact cocoa areas from Ivory Coast through Ghana and Benin to Nigeria and Cameroon during the next week.

COFFEE

July Coffee was lower early Wednesday but inside this week’s range, as the market continued to await the arrival of the 2026 arabica crop in Brazil. The crop is expected to be large, which is probably why the two-day rally last week was met with heavy selling. A survey of Brazil coffee market participants conducted by Cepea suggested the arabica coffee harvest has remained slow across most regions. Zona da Mata in Minas Gerais has seen fieldwork start to gain momentum, but in Southern Minas Gerais, many producers have not yet started. They expect the pace to pick up from the second half of May onward. World Weather Inc. said on Tuesday that some rain will evolve in in southernmost Sul de Minas during the late weekend and early part of next week. All other coffee areas are not likely to see more than a few random showers.

SUGAR

July Sugar was higher early Wednesday, reaching its highest level since April 9. India appears to be getting on board the ethanol train, as the government issued a notification late Tuesday proposing amendments to regulations that would allow 85% and 100% ethanol blends. India reached a target of 20% ethanol blending (E20) in 2025. The 2026/27 Brazil season officially began April 1, and a survey of analysts by S&P Global put estimates for Brazil center-south sugar production for the first half of the month at 541,000 metric tons, which would be down 26.4% from the same period  on 2025. Cane crush is expected to grow by 5.8% to 17.64 million tons for the period, but ethanol production is seen rising 23.5% to 1.13 billion liters. We look for the UNICA report on first half April center-south production to be released this week or early next.

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