Heat Hits European Sugar Beets

SUGAR

October Sugar extended its rally overnight to reach its highest level since May 22. Extreme heat and drought in Europe is threatening the sugar beet crop there, and France, the EU’s largest producer, has no rain forecast over the next two weeks. World Weather Inc. expects poor rainfall patterns to continue impacting far western Europe for at least the next ten days and possibly for two weeks. El Nino appears to be showing it influence in tropical and subtropical areas of the world. Southern Thailand has dried out recently raising the need for rain soon for sugar cane there. The Indian Weather department said on Tuesday July rainfall is expected to be less than 94% of the long-term average of about 28 centimeters, largely due to the emergence of an El Nino. India received nearly 40% less rainfall than normal in June, making it the driest June since 2014 and the fifth-driest since records began in 1901.

COFFEE

September Coffee was higher early Wednesday, extending Tuesday’s breakout rally. Tight old crop supplies and a slowdown in the Brazilian harvest due to rains have forced traders to reassess their expectations for the new crop. The Brazil rains have brought some concerns about quality as well. World Weather Inc. says seasonably mild to warm temperatures are expected during the coming week to ten days, leaving no risk of damaging cold. Rainfall should be minimal as well, which should be good for harvest and bean drying for a change. A Bloomberg Story said Brazilian farmers have also been holding back from sales, waiting for prices to rise and bracing for the potential impact of El Nino. Perhaps the rally and the dry weather will bring in some sellers. World Weather Inc says El Nino is starting to be felt in tropical regions, including some key robusta areas.  Southern Indonesia’s drier-than-usual tendencies are becoming a little more notable, although not yet a crisis, and parts of Vietnam have dried out recently, raising the need for rain soon.

COCOA

September Cocoa was lower early Wednesday but inside Tuesday’s range. The market reached its highest level since January last week on concerns that too much rain in west Africa was slowing pod development and threatening to bring disease, and the market has more or less held those gains since. Farmers interviewed by Reuters said on Monday that heavy rains had flooded several plantations in Ivory Coast, and torrential rains have also flooded large parts of Ghana. World Weather Inc. says the influence of El Nino is beginning to be felt across west-central Africa, with a notable decrease in the frequency and intensity of rain. Some of this is typical of the period from July through August when seasonal rains are normally lighter and often shift farther to the north in Africa. If this El Nino performs like those in the past, the seasonal return of rainfall in late August and September may be either slow to evolve or much less than usual. They said that this year’s main crop flowered well and should yield well. But according to a story in Bloomberg, early crop assessments from four traders and a market analyst show poor pod development in Ivory Coast, pulling forecasts for the 2026/27 marketing year down to 1.8 million metric tons from 2.2 million in 2025/26.

COTTON

December Cotton was higher early Wednesday and just barely broke above the five-day consolidation. Tuesday’s USDA Acreage Report came in bearish against the average expectation but did not offer any big surprises. The report put US all cotton planted area at 9.85 million acres versus the average trade expectation of 9.6 million but within the range of expectations from 9.1-10.4 million. This was up from the March 31 Prospective Plantings number at 9.6 million and up from 9.28 million in 2025/26. India recorded its driest June in more than a decade, and this has slowed the planting of summer-sown crops including cotton, but rains forecasted for the early part of this month could give them a chance to catch up. World Weather Inc. says rain is needed in the unirrigated areas of West Texas. Some partial relief is expected over the next few days, but with very warm to hot temperatures and restricted rainfall for at least a week after that could inhibit any significant improvement in crop conditions or soil moisture. That coupled with the decline in US crop conditions last week offers a somewhat bullish bias.

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