Brazil Rains Pressure Coffee Prices

COFFEE

March Coffee is close to breaking below a five-month consolidation, having fallen below the December high early Friday, which leaves the September low at 334.30 as the remaining support level. An recovery in Brazilian arabica production for 2026 may finally be pointing to an easing of the supply tightness that has supported the market for the past tow years. Brazil’s largest coffee co-op, Cooxupe, said total precipitation in coffee growing areas of associated farmers totaled 288 millimeters (11.34 inches) for January 1-26 versus a long-term average of 276 millimeters for the entire month, bringing relief to growers, favoring bean growth in a key stage of crop development. Sucden recently estimated the 2026 crop at 72.5 million 60-kg bags, up 13% from 2025. This is also the “on-year” in the biennial cycle of Brazil’s arabica crop. Arabica harvest typically begins in May or June, with robust beginning in April. World Weather Inc. says rain should slowly increase over the next several days. A frequent shower and thunderstorm pattern is likely this weekend through all of next week to February 8. Some areas in Sao Paulo, Sul de Minas and southern Cerrado Mineiro may become excessively wet.

COTTON

March Cotton was moderately lower early Friday but was still holding above Monday’s contract low. Thursday’s export sales report were disappointing after the strong sales of the previous two weeks did little to boost optimism cotton’s supply/demand balance. The report showed US cotton sales at 203,666 bales for the 2025/26 (current) marketing year and 14,964 for 2026/27 for a total of 218,630 for the week ending January 22. This was down from 438,392 the previous week and 349,844 the week before that, but it was better than the sub-200,000-bale readings for the previous three weeks. Cumulative sales for 2025/26 have reached 7.553 million bales, down from 8.417 million at this time last year and below the five-year average of 10.270 million. Sales have reached 67% of the USDA forecast versus a five-year average of 82% for this point in the marketing year, which leaves open the possibility of a revision lower in the USDA forecast in upcoming supply/demand reports.

SUGAR

March Sugar was sharply lower early Friday, falling to its lowest level since mid-November. Another bearish assessment of global sugar demand may have given sellers a reason to press the market lower. Australia-based sugar and biofuels analysts Green Pool on Thursday Projected a global sugar surplus of 156,000 metric tons in 2026/27, still a surplus but much smaller that the 2.74 million tons in 2025/26. Global production was forecast to fall to 195.91 million tons from 197.50 million, partly due to lower EU output. They expect a 4% drop in the EU beet area, and with near average yields could pull sugar production down 6% from 2025/26. Global consumption was expected to climb by 0.5% to 194.72 million in 2026/27, but they also cut 2025/26 sugar consumption by 466,000 tons to 193.73 million. They pointed out that sugar consumption in developed countries continues to decline as consumers switch to healthier diets, aided by the increased availability of GLP-1 drugs. India may still have more than 1 million tons to offer for export this year.

COCOA

March Cocoa fell through last Friday’s contract low overnight as the selling resumed on reports of burdensome supplies in west Africa that are having a difficult time finding buyers at current levels. Ivory Coast’s Coffee and Cocoa Council officially launched its program to buy cocoa beans that have been held for weeks by producers. The government announced last week that it would buy 100,000 metric tons. Local dealers have reported that exporters are refusing to buy beans at the guaranteed price of 2,800 CFA francs/kg after a fall in global prices. The first phase will involve buying and storing cocoa beans and the second phase will focus on exporting the stockpile, which puts a lid on prices. World Weather Inc. says West-Africa coffee and cocoa production areas of Ghana, Nigeria and Ivory Coast will see a more normal weather pattern for this time of in the coming week. This includes only a few coastal showers and warm temperatures. However, the Harmattan wind will light and temperatures are not expected to be excessively hot. Rains could return to southern cocoa areas during the second week of the two-week forecast.

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