Cocoa Rebounds From Lows

COCOA

May Cocoa was moved into positive territory early Monday after starting off the session at new contract lows. There may be some idea that Ivory Coast’s decision last week to move up the start of the mid-crop to March, which effectively lower the official farmgate price, may finally get some of their of the crops sold and start to relieve their burdensome supplies. The market may also be reacting to the sharply higher crude oil and natural gas prices this morning, as that raises the cost of shipping and the cost of fertilizer. The threat of higher fuel prices may create some urgency on the part of confectioners and exporters to get cocoa bought and shipped.

COTTON

May Cotton is lower this morning following a disappointing performance last week after it had achieve its highest level since late January. The market had reached an oversold technical condition at its February lows, and the fund net short was approaching a record level prior to the short covering rally on February 17. New contract lows were not a comfortable place ahead of the growing season, especially with Texas trending dry going into plantings. Last week’s export sales report may have been disappointing after the record sales from the previous week. The US attack on Iran sent the dollar sharply higher over the weekend, and this makes US cotton less competitive on the global market. The cotton market also reacts negatively to economic uncertainty, and the lower stock market in the early going today does not help. Sharply higher crude oil prices can support cotton on ideas this makes man-made fiber more expensive, but the whole situation is very fluid. World Weather Inc. says South Texas and northeastern Mexico need rain to support planting in March and April. Some showers may evolve later this week into next week, but a general soaking seems a unlikely. West Texas also needs rain and only light amounts are expected for a while.

SUGAR

May Sugar reached its highest level since late January early Monday but has given up a good portion of the gains. The market opened up strong on ideas that sharply higher crude oil and gasoline prices will spark a greater interest in crushing cane for ethanol at the expense of sugar, especially in Brazil. We have already seen a move in this direction, and early have called for sugar’s share of the crush to fall to 48-49% in 2026/27 versus 50.% so far this season. Czarnikow on Friday estimated global 2025/26 sugar production at 184.4 million metric tons, down 2.3 million from their previous estimate, due primarily lower expectation for India. The states of Maharashtra and Karnataka have seen early mill closures for the season due to low yield brought about by too much rain.  Also on Friday, the International Sugar Organization forecast a global sugar surplus of 1.22 million metric tons for 2025/26 down from its previous projection of 1.63 million. They cited lower than expected production in India and Thailand. India’s 2025/26 sugar production was forecast at 29.5 million tons, down from 30.98 million in their previous update in November. Thailand’s output was revised down to 10.86 million tons from 11.16 million.

COFFEE

May Coffee was near unchanged early Monday as it held inside a trading range that has defined this market for almost two weeks. The market has been under pressure as seasonal rainfall has arrived in Brazil to boost expectations for the upcoming crop. Coffee growing areas of Brazil saw a mix of rain over the weekend, with the southern part of Minas Gerais dry. Colombia is expected to see frequent rain in the next week that will benefiting coffee production. Vietnam reported a few showers and thunderstorms during the weekend, and frequent rains are expected over the next week to ten days. The earlier than usual arrival of seasonal rainfall may induce early flowering. Indonesia coffee exports totaled 18,788.1 metric tons in January, up 2% from January 2025.

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