Soft Demand Weighs on Cocoa Prices

COCOA

May Cocoa prices are drifting lower, as the market lacks a bullish catalyst and is looking at good crop prospects for West Africa and limited demand prosects. Global candy manufacturers have reduced the amount of chocolate in their products, and it may take an extended period of low cocoa prices to induce them go back. They may also be reluctant to lower their prices, which could limit demand. The first quarter grind data for Europe, Asia and North America is due to be released April 16. World Weather Inc. expects increasing shower and thunderstorm activity during the next week for west Africa, enough to maintain a favorable outlook for most of the region’s cocoa crops.

COFFEE

May coffee is consolidating the rally from Monday. A strong crop expected for Brazil this year, but farmers are said to be holding back sales. A Reuters poll of 11 analysts has a median expectation for Brazilian production to reach 74 million bags in 2026/27, up 10 million from 2025/26. Vietnam production is expected at 31 million bags, in line with 2025/26. The global coffee surplus is expected at 8.7 million bags, up from 1 million bags in 2025/26. War in Iran raises prices for fertilizer, fuel and shipping, but Rabobank pointed out that coffee prices are well above the cost of production, which suggests growers will not be forced to cut back on fertilizer. World Weather Inc. said light rainfall fell in Brazilian coffee areas this week, with most areas seeing some rain. A drying trend is expected to develop this weekend and through the first half of next week, with a warmup expected as well.

SUGAR

May sugar was higher early Thursday but still inside the range of the past week. Higher crude oil prices overnight lent support on ideas that cane crushers, particularly in Brazil, will focus more on ethanol production at the expense of sugar this year. However, the Brazilian state oil company Petrobras has yet to raise domestic gasoline prices. Other supportive factors are a tightening of the global supply surplus expected in 2026/27, and the possibility that El Nino could disrupt the Indian monsoon this summer. Current forecasts lean for an arrival in last summer. Brazil already started to lower its crushing for sugar due to low sugar prices in 2025/26. The new marketing year officially starts April 1.

COTTON

May Cotton was slightly lower early Thursday with some weakness in the stock market as the trade took a less optimistic towards an end to the Iran war that it was 24 hours ago. USDA cotton export sales this morning were mediocre, with sales for the week ending March 19 at 202,444 bales for the 2025/26 (current) marketing year and 27,017 for 2026/27 for a total of 229,461. Cumulative sales for 2025/26 have reached 9.543 million bales, down from 10.225 million at this time last year and below the five-year average of 12.114 million. Sales have reached 85% of the USDA forecast versus a five-year average of 97% for this point in the marketing year. For the USDA Prospective Plantings report on Tuesday, the Reuters poll has an average trade expectation for US 2026 cotton plantings at 9.229 million acres, with a range of 9.000-9.635 million. This compares to 9.283 million in 2025 and 9.400 million in the Outlook Forum from February. World Weather Inc. says South Texas,  northeastern Mexico, and West Texas could see some showers during the first week in April.  Timely rain has occurred earlier this year in the U.S. Delta and southeastern states, but soil moisture is still a little low. The US Drought Monitor this morning indicates that an area representing 91% of US cotton production wat affected by drought as of March 24, up from 89% a week prior and 365 a year ago.

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