Cotton Prices Near Tariff-Era Lows

COTTON

December Cotton fell to its lowest levels since the post “Liberation Day” tariff-low yesterday and managed to close higher on the day, but it looks like it will test yesterday’s low today. The government shutdown does nothing to help demand expectations, which are already low due to the slow pace of export sales. We may not see an export sales report this week due to the shutdown.  Last week’s report showed net cotton sales for the week ending September 18 at 86,094 bales, which was the lowest for the marketing year so far. Cumulative sales for 2025/26 had reached only 4.059 million bales, down from 4.871 million at this time last year (which was already slow) and the lowest in at least 10 years. Sales had reached 36% of the USDA forecast versus a five-year average of 53% for this point in the marketing year. US crop conditions are decent, supported by much above normal conditions in Texas.

COFFEE

Happy International Coffee Day! December Coffee has been consolidating since putting in its contract highs in mid-September, supported by a drawdown in ICE stocks as US buyers look for alternatives to Brazilian supplies and pressured at the high by an improvement in rainfall for Brazil. On the whole, Brazil rains have been slow to arrive, and that may eventually weigh on expectations for the 2025/26 crop, which should be starting its bloom stage. World Weather Inc. says very warm to hot temperatures and little to no rain will impact Brazil coffee areas through the weekend. There will be a chance for some showers near the Atlantic Coast from Espirito Santo to Bahia, but most of the key coffee areas will be left dry and temperatures will be above normal.  The market was awaiting a meeting this between President Trump and Brazilian President Luiz Inacio Lula da Silva, where it is hoped they will discuss the 50% US tariff on Brazilian coffee, but no date has been announced. The possibility of such a meeting came after the two met cordially at the UN last week. Another tropical cyclone should move across the northern South China Sea Friday into this weekend and could be near northern Vietnam by late Sunday or Monday.  La Niña has not arrived despite NOAA models suggesting it would evolve in September and be well under way in October. World Weather, Inc says recent data suggests a much less aggressive evolution toward the phenomenon.

COCOA

December Cocoa extended yesterday’s selloff slightly overnight and slipped below the July 17 low at 6700. Active rain in West Africa is boosting expectations for the 2025/26 main crop which is in harvest now and for the mid-crop that will be harvested next year. The overnight maps showed Ivory Coast experienced light to moderate rainfall over the past 24 hours after minimal rain on Monday. Ghana had light rain after light to locally moderate on Monday. World Weather Inc. expected showers and thunderstorms from Ivory Coast through Ghana and Benin to Nigeria and Cameroon during the next week, with all cocoa production areas seeing rainfall that would maintain wet soil conditions and support normal crop development.  Ivory Coast’s main crop harvest is due to start, and arrivals are expected to get a boost from a higher farmgate price. There are reports that the Ivory Coast regulator, the CCC plans to increase its farmgate cocoa price for farmers to anywhere from 2,500 to 2,800 CFA francs ($4.50-$5) per kg for the main crop and would put their price ahead of Ghana’s. The new price was expected to be announced today.

SUGAR

March Sugar sold off overnight on expectations for heavy deliveries against the October contract. Reuters reported that they were expected to come in around 1.52 million metric tons, based on preliminary information from two sugar traders. This would be the fourth largest on record for an October expiration. Czarnikow is projecting a global sugar supply surplus of 7.4 million metric tons in the 2025/26 season, which would be the highest since 2017/18. They mentioned that the forecast will be heavily reliant on Northern Hemisphere beet and cane crop performance and that these harvests are just starting. Their preliminary projection for 2026/27 calls for a smaller surplus of 4.4 million tons. The emergence of GLP-1 receptor agonist drugs like Ozempic and Zepbound are expected to undermine sugar consumption globally. The initial effect is on wealthier nations , but usage could become more widespread once the Ozempic comes off patent, which will happen in many countries in 2026. A senior India weather department official said yesterday that the nation is expected to see above-average rainfall in October (115% of the 50-year average) , following an above-normal September. World Weather, Inc. suggests caution when forecasters and analysts start blaming the lack of rain in center west and center south Brazil La Niña, as that phenomenon has yet to evolve. The trade is awaiting the UNICA update on the Brazilian Center-South sugar crop for the first half of September, which is expected to be released this week. A survey of analysts by S&P Global expects sugar production for the period to be around 3.6 million metric tons, up 15% from the same period a year ago. This would put cumulative production for the 2025/26 marketing year (which began April 1) down just 0.2% from a year ago after being down 14.7% in mid-June.

Interested in more futures markets?  Explore our Market Dashboards here.