Brazil Weather Favorable to Harvest

COFFEE

September Coffee was lower again early Wednesday following Tuesday’s dramatic selloff, but it was still inside Monday’s range-up day. Clearly the market overreacted to the slow pace of the Brazilian harvest, and if anything, harvest conditions have turned more favorable over the past two weeks. There were reports of flooding in June that may have caused damage to the crop that extends beyond a delay in harvest, but the rally to the October contracts highs seems hard to justify. Perhaps the rally also attracted Brazilian producers selling.

COCOA

September Cocoa was sharply higher early Wednesday, as the market continued its upward track. The rally so far has taken the market through the 50% retracement of the selloff from the contract high from May 2025 to the March 2 low. Concerns over El Nino and its effects on west African production have supported the market. Traders remember the devastating effects the previous El Nino event had on production, first bringing heavy rains that caused disease and harvest problems, then bring extreme heat and drought. The flooding rains that hit Ivory Coast last month only fed those concerns.

COTTON

December Cotton is hovering near the upper end of Tuesday’s range, as the market continues to draw support from declining US crop conditions. The sharp rally in crude oil overnight may have lent some support to cotton on ideas that higher crude prices raise the cost for man-made fibers, but this is a mixed bag, as higher energy costs can also hurt the global economy and cotton consumption. T

SUGAR

October Sugar is lower after reaching its highest level since May 21 early in Wednesday’s session. Sharply higher crude oil in the wake of the apparent collapse in the US/Iran cease fire lends support to sugar on ideas it will boost ethanol production cane at the expense of sugar, the market is also supported by crop concerns from El Nino.

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