Near-Term Coffee Supplies Continue to Tighten

COFFEE

December Coffee reached its highest level since July 13 on Tuesday, as the market continued to draw support from tight near term supplies and uncertainty over the condition of Brazil’s new crop. The market may be drawing support from last week’s report that Brazil’s green coffee exports in July was just 153,243 metric tons, down from 160,973 for the same period last year. Reuters quoting dealers mentioned quality issues in Brazil, which has been a theme since the heavy rainfall in June cause some bean droppage.

COCOA

December Cocoa was lower early Tuesday but inside the range of the previous session. The market has traded in a sideways pattern for the past four sessions as it weighs the potential for El Nino to lower global production in the coming year against what appears to be a relatively strong crop for 2025/26. Ivory Coast cocoa arrivals totaled 4,000 metric tons for the week ending August 9, down from 7,000 the previous week and 11,000 a year ago. However, cumulative arrivals since the marketing year began in October have reached 1.992 million tons, up from 1.643 million last year at this time and the highest for the period since 2023. It is also above the five year average of 1.954 million.

COTTON

December Cotton was higher early Tuesday but had yet to take out Monday’s three month high. It would not be surprising to see the recent rally stall ahead of Wednesday’s USDA supply/Demand (WASDE) report. Monday afternoon’s Crop Progress report showed 40% of the US cotton crop was rated good/excellent as of August 9, down from 42% the previous week and 53% a year ago and below the five-year average for this date at 47%.

SUGAR

October Sugar was near Monday’s highs early Tuesday and was just below the March 27 peak. The market rallied sharply last week off a sharp reduction in Brazilian output for June, as slowdown in exports that month, and reports of record prices in India. Reuters reports that India is considering restricting the amount of sugarcane used for ethanol in the 2026/27 season that  begins in October to boost sugar output. Reduced rainfall in Maharashtra and Karnataka, India’s biggest sugarcane-producing states, has raised concerns about next year’s output. The government has already banned sugar exports.

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