Coffee Slips After Two-Week High

COFFEE

September Coffee was lower early Wednesday after reaching its highest level in two weeks on Tuesday. Tight old crop supplies and a slow harvest pace out of Brazil supporting the market. Rains in Brazil growing over the weekend have reintroduced concerns about the slow harvest pace. ICE certified arabica stocks fell 3,051 bags on Tuesday to 289,759, their lowest since February 8, 2024. They have been declining steadily for several months and have been down for 26 straight sessions and in 50 out of the last 51. World Weather Inc. does not expect much precipitation in Brazil coffee production areas during the next week. However, rain potentials may increase in Parana and Sao Paulo during the latter part of next week. Areas from Sul de Minas northward are still expected to be dry through August 5.

COCOA

September Cocoa was higher early Wednesday, perhaps on report on Tuesday that Ghana’s production was expected to fall in the 2026/27 crop year. Growers interviewed by Reuters said that persistent rains in the western and western north regions of the nation, which produce more than half of Ghana’s annual output, have left trees with fewer pods than in previous seasons. The central and eastern regions, where pods were still developing from flowers, farmers said pod counts remained strong. Farmers blamed the strengthening El Nino pattern for the heavier than normal rains. On the other hand rains have moved north out of west African growing regions in recent weeks, which is typical for this time of year. El Nino could limit rainfall when it makes its seasonal return later this summer.

COTTON

December Cotton was lower early Wednesday but inside Tuesday’s range. The market has been in a choppy sideways pattern for weeks, as conditions are dry enough in west Texas to keep traders cautious. Most of the rest of the US crop looks decent, aside from some problem areas in the Delta and the southeast that need rain as well. Dry conditions in India and China have also raised concerns about global production at times. World Weather Inc. expects West Texas too see minimal rainfall over the next couple of weeks, which could increase concern over warm to hot temperatures and declining soil moisture in dryland fields.  Xinjiang, China is bracing for a new heatwave beginning this weekend that is expected to last ten days with extreme highs in the range of 104 to 113 degrees Fahrenheit. Southern India will also remain drier than usual over the next few weeks. Northern, central and eastern India has sufficient soil moisture to support normal summer crop development. On the other hand, Reuters and the Cotton Association of India report that cotton sowing has picked up pace with the monsoon gathering momentum across some key producing states. The delayed onset and progress of monsoon have pushed back the sowing window by a couple of weeks. Stakeholders said the crop condition has been good and expect the area to surpass last year’s levels. India’s monsoon rainfall deficit has narrowed to 16% from nearly 40% at the end of June. The area in which cotton was planted has dropped 4% to 9.87 million hectares so far this year.

SUGAR

October Sugar was higher early Wednesday but still inside the relatively narrow range of the past two weeks. Some analysts have started to lower their expectations for global production from earlier estimates, as higher energy prices encourage ethanol production from sugar cane and with ongoing concerns about beet and cane crops due to hot and dry conditions that may or may not be brought on by El Nino. World Weather Inc says Europe will continue to be dry for at least the next ten days, which will continue to pose a threat to the region’s sugar beet production. Southern India will remain drier than usual, which will keep concerns about sugarcane development potential there. However, northern, central and eastern parts of India have sufficient soil moisture to support normal development. The Indian Government has imposed limits on the amount of sugar that dealers can hold in storage from  August 1 to November 30 in an effort to limit hording and speculation so as to keep domestic supplies ample and prices reasonable during the festival season.

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