Farmers Delay Coffee Sales

COFFEE

July Coffee was holding Monday’s gains early Tuesday, perhaps from some residual strength on lower production reported out of Colombia for March. Cecafe reported that Brazil’s green coffee exports totaled 2.66 million bags in March, down 10.4% from a  year earlier. This is the off season, and well-capitalized farmers are waiting for the best moment to sell their coffee, according to Cecafe head Marcio Ferreira. The war in Iran is causing some logistics problems as well. Germany was the main buyer of the Brazilian coffee in the month, importing about 405,000 bags. The new crop harvest is expected to begin next month, and it is expected to be a strong crop.

COCOA

July Cocoa rejected an early selloff on Monday and was back approaching the upper end of the narrow, six-week trading range early Tuesday. Growing conditions in West Africa look favorable for the upcoming mid-crop, and the trade awaits the first quarter grind data for Europe, North America and Asia on the 16^th. Cumulative arrivals for the 2025/26 marketing year have reached 1.462 million tons, up from 1.457 million a year ago and the highest since 2022/23. Ivory Coast farmers told Reuters that good rains mixed with sunny spells last week in most of the nation’s cocoa-growing regions helped the March-to-August mid-crop to develop well. World Weather Inc. expects conditions to become more conducive for rain early next week. Until then, precipitation will be sporadic and light, benefiting some areas more than others. ICE cocoa stocks increased 69,470 bags on Monday to 2.610 million, their highest since August 21, 2024. The European Commission has raided the premises of an unnamed chocolate confectionery company on suspected violation of antitrust rules that prohibit cartels and anti-competitive practices, it said on Monday in a statement. The antitrust inspections were carried out on the company’s facilities in two European Union countries, the commission said. It did not identify them either.

COTTON

July Cotton extended its rally early Tuesday and was sitting at its higher level since June 2024, while the December contract was the highest since April 2024. The July contract is +12.33 cents (+19%) off its contract low from February. The stock market recovering most of the losses it has sustained since the start of the Iran war and the dollar falling to its lowest level since March 2 are supportive on the demand front, but the dry conditions in the US has likely been the key sustaining factor for the rally. As of last Tuesday, an area representing 95% of US cotton production was experiencing drought. The transition from La Nina to neutral conditions may bring an end to the dry pattern in Texas. Also, the 6-10 and 8-14 day forecast show above normal chances of rain. Recent rainfall did not appear to be enough to counter evaporation, as temperatures are high as well.

SUGAR

July Sugar was higher early Tuesday after opening below Monday’s low. The market had fallen to its lowest level since March 6 prior to the overnight rally, which perhaps creates the opportunity for a low. Brazil crushers are anticipating a decision by the government to raise the legal mix of anhydrous ethanol blended with gasoline from 30% to 32% for the upcoming season. Safras & Mercado estimates the proportion of cane used to make ethanol rather than sugar would rise to 54%, up from 53% in its previous forecast and 51% from 2025/26, thus reducing sugar output. France’s farm ministry said on Tuesday estimated the nation’s sugar beet harvest area this year at 379,000 hectares, down 4.6% from 2025 and 4.9% below the five-year average. The India Meteorological department said on Monday that it expects a below average monsoon this year at 92% of the long-period average (LPA) this year versus “normal’ rainfall between 96% and 104% of the average.

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