ADMIS News
Higher Prices on Strait Uncertainty
April 9, 2026
COCOA
May Cocoa was lower early Thursday but inside Wednesday’s range. Lacking other inputs, the market may have been a bit disappointed on news that the Strait of Hormuz remains closed. First-quarter grind data is due to be released on April 16, and dealers have told Reuters they look for Europe’s grind to be down 2% to 4% and North America’s down 10% to 12% from last year. World Weather Inc. said that satellite imagery suggested showers and thunderstorms scattered from Ivory Coast into portions of Ghana, Nigeria and Cameroon Tuesday and into Wednesday. They expect periodic rain over the next week to ten days with sufficient amounts to support cocoa development. The greatest frequency and intensity of rain is predicted for the weekend and next week. None of this seems to threaten mid-crop production.
SUGAR
May Sugar gapped lower on Wednesday on news of the cease fire in Iran and it extended the selloff early Thursday despite concerns that the cease fire will not hold or that the Strait of Hormuz would be not opened. Refiners in the Persian Gulf have been cut off from raw sugar inputs, so reopening the Strait could actually boost raw sugar sales. The market had drawn some support from the rally in energy prices on ideas it would boost ethanol production from cane, but other factors are at work, namely a large global surplus for 2025/26. The market’s steep selloff from the March 30 high attests to that. Brazil’s Energy and Mines Minister said on Wednesday that the government does indeed want to raise the mix of ethanol in gasoline to 32% from 30% by the end of the first semester, but he added that government studies on the matter should conclude within 60 days. Brazil increased the mix to 30% from 27% last August. Brazil also produces ethanol from corn
COFFEE
May Coffee was lower early Thursday but inside Wednesday’s range. The market appeared to find support yesterday on news of a ceasefire and on hopes that the reopening on the Strait of Hormuz would allow coffee shipments to Persian Gulf nations to resume, but those hopes have dimmed today. The trade is expecting strong production out of Brazil this year, and the harvest should start in May or June. World Weather Inc, said rainfall from eastern Cuba through Dominican Republic to Puerto Rico has been well above normal so far this calendar year, which may raise concerns over the upcoming crop. Coffee has flowered prematurely, though the precipitation frequency has been great enough in many areas to support pollination and some cherry setting. Rain will also slowly develop over the coming week in southern India and Vietnam while it will continue routinely in Brazil and Indonesia. The expected arrival of El Nino during the second half of the summer could bring dry conditions to many coffee growing areas, including Colombia, Africa, and Indonesia.
COTTON
May Cotton was lower early Thursday but inside Wednesday’s range. The market opened sharply lower on Wednesday on news of the cease fire in Iran and sharply lower crude oil prices, but it made an impressive recovery as the session progressed and managed to close higher on the day. The euphoria over the cease-fire announcement has faded, with reports of Israeli continuing to bomb in Lebanon, Iranian drones hitting targets in Kuwait, and Iran laying several conditions on reopening the Strait of Hormuz. Cotton had drawn support from higher energy prices on the idea that it would not only drive up the cost of polyester but also cotton production in the form of higher diesel and fertilizer prices. But the other supportive factor is the uncertainty over US production given the ongoing drought across the US cotton belt. However, the current transition from La Nina to neutral conditions does offer the chance increased rainfall. World Weather Inc. said on Wednesday that good planting weather is expected south of the Ohio River and from the east side of the Mississippi Delta to the southeastern states but that dryness in some of these areas may eventually hinder emergence and establishment especially in the southeastern states. Below normal precipitation in the Delta is also a concern, but there have been timely rain events to support fieldwork, and this trend will continue over the next two weeks. The 6-10 day forecast shows above normal rainfall chances across Texas and the Delta. Traders will be watching this morning export sales report to see if it can repeat last week’s strong performance.
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