Cotton Faces New Rain Risk

COTTON

December Cotton is in a narrow, sideways pattern with reports of mill buying emerging around 80.00 but lackluster export sales reports. The dollar has weakened slightly this week (after reaching its highest level since April 2025 last week), which may offer some hope for an eventual improvement in exports. Last week’s export report showed net sales of 154,100 bales for the week ending October 8 (current and new crop combined), down from 211,100 the previous week after reaching 353,500 for the week ending September 17. Cumulative sales at 5.249 million bales are running ahead of the 4.571 million from a year ago, but they remain below the five-year average of 6.288 million.. Dry weather in US growing areas this week should allow harvest to advance, but World Weather Inc. say there is threat of rain Saturday to Tuesday in West Texas that could slow harvest and potentially cause quality to decline and possibly bring production issues if boll rot ensues.

COFFEE

The decline in ICE certified arabica stocks back near 26-year lows is supporting the market on ideas that supplies will be tight into the delivery of the December contract. Stocks fell 4,951 bags on Tuesday to 234,901, the lowest since September 16. On September 15, stocks fell to 217,646 bags, a 26-year low. The Brazilian real is holding  most of its gains from two weeks ago, and this lowers the incentive for Brazilian exporters to market their product. Data from Coffee Trading Academy showed Japan’s green coffee stocks totaled 1.99 million bags in August, down 21% from a year ago and 27% below the five year average. European green coffee stocks totaled 7.14 million bags in August, down 17% from a year earlier. Arabica stocks were down 26% at 1.69 million bags. World Weather Inc. expects a mix of rain and sunshine in Brazil growing areas over the next week or so, which should be beneficial for the upcoming crop.

SUGAR

Fund traders were holding a near record net long as of the recent Commitments of Traders report, which leaves the market vulnerable to selling if support levels do not hold. The market is lower despite a story on Reuters that Green Pool Commodities had increased the global supply deficit in its latest forecast to 6.28 million metric tons from a previous estimate of 3.3 million, citing problems with crops in Europe, Brazil, and India. These production problems have been well reported and absorbed by the market. More heavy rains coming to Brazil would continue to cause problems with harvest and crushing, but it appears the main growing areas will avoid the worst of the rains. World Weather Inc. said Southern Brazil will be trending much wetter starting late this week and into next week, with local flooding possible from northern Rio Grande do Sul into southern Paraguay, southern Mato Grosso do Sul and Parana. Parana represents about 8% of Brazilian cane production and Mato Grosso do Sul 3%. Left out of this list was the Sao Paolo, which is a further north and represents about 60% of production, as well as Minas Gerais, which represents about at 7%.

COCOA

December Cocoa has been chopping around inside a range bound roughly by $5500 and $6000 this month. Ample old crop supplies mitigate concerns about dry conditions in West Africa. The weather there seems to be just wet enough to avoid major concerns about the crop (for now). World Weather Inc. said rains will be erratic across most West African growing regions through the next week, with some areas possibly experiencing net drying, but nearly all plantations seeing rain at one time or another. Ivory Coast growers interviewed by Reuters did express concerns over dry weather last week. El Nino threatens below normal rainfall that could last well into the dry season. Cocoa arrivals at Ivory Coast ports are lagging last year despite the early start. ICE cocoa stocks increased by 29,944  bags on Tuesday to 3.629 million, the highest since May 30, 2024.

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