Brazil Coffee Harvest Approaching

COFFEE

Forecasts for Brazil’s 2025/26 coffee crop have been revised higher by various players over the past week or so, with Safras & Mercado raising its all-coffee forecast to 65.51 million bags from 62.45 million in December and Conab raising its forecast to 55.7 million from 51.8 million in January. Robusta prices in Asia are a little softer this week, as new-crop Indonesian beans are reported to be starting to hit the market. ICE certified stocks decreased by 8,280 bags yesterday to 835,767, their lowest since May 5. Stocks pending review increased by 1,152 bags to 147,604, the highest since March 18, 2024. World Weather Service said the main coffee growing areas of Brazil continue to be dry and seasonably mild to warm.  No rain was reported over the last 24 hours. The Brazilian robusta harvest is reported to be underway, and the arabica harvest usually begins in May or June. As of May 21 last year, 22% of robusta planted area had been harvested, with 15% completed for the arabica area. Earlier this week Cecafe reported that Brazil green coffee exports in April totaled at 2.78 million bags down 29% from a year prior.

COCOA

On its rally on Tuesday,  July Cocoa achieved the 0.618 retracement of the selloff from the December contract high to the April low, and it has backed off from that level today. Reuters said yesterday there was talk that early pod counts for the 2025/26 West African main crop suggested there is unlikely to be a significant recovery in production next season, but nothing specific was cited. Conditions in were exceptionally dry this winter, which has raised concerns about the mid-crop and the upcoming main crop, and a slowdown in Ivory Coast arrivals this week has sparked renewed concerns about the mid-crop. Ivory Coast growers also expressed concerns about recent spotty rainfall, mentioning that they need heavier rain to support the latter half of the mid-crop. World Weather Service said light to locally moderate rain fell on a large part of Ivory Coast Tuesday and that isolated to scattered showers occurred from Ghana into southeastern Nigeria where similar amounts of rain were suspected. They expect sporadic rainfall through the next week, with some areas getting significant amounts. The overnight maps show a few areas receiving rain over the past 24 hours, nothing widespread.

COTTON

July Cotton saw a sharp rally on Monday in the wake of a better than expected result from trade talks between China and the US over the weekend, but the market quickly backed off from that high. The pause in retaliatory tariffs may not be enough to help US cotton sales, as it still leaves a 10% duty on US exports to China in place. The USDA supply/demand report this week forecast an modest increase in US ending stocks for 2025/26, with world ending stocks mostly steady. The US stocks/use ratio is slightly lower at 36.6% versus 37.5% last year, but this is still well above the 10-year average of 28%, suggesting that the projected supply will remain “ample.” World Weather Service says West Texas planting prospects improved due to the rains earlier this month but more is needed, especially in the dryland areas of the southwest. Field conditions in the Delta are a little too wet, and more rain is coming. The southeastern corner of the US received some needed rain during the weekend and Monday, although south-central and some southwestern Georgia and eastern South Carolina locations did not get very much moisture. The export sales report could support a turnaround in the market if it shows an improvement over the dismal sales of last week, which showed net sales of 65,764 bales for the 2024/25 (current) marketing year and 37,376 for 2025/26 for a total of 103,140. This was the lowest combined total since October and the lowest 2024/25 sale since June. China has canceled sales for nine weeks straight.

SUGAR

Speakers at an annual sugar conference in NY this week forecast global surpluses of 400,000 to 1.53 million metric tons for 2025/26 versus deficits of 4.7 to 7.0 million in 2024/25. For the most part,  Brazilian production is expected to increase 4%-5% this year, although one firm called for a 2% decline. India’s production is projected to increase 24%-25% from 2024/25, with Thailand’s expected to be up 11%-14%. Speaking at the conference yesterday, a representative from Datagro said Brazil’s growing conditions are favorable despite a slow start to the harvest and that cumulative rains from October to April in the center-south region were near the best in the last five years. The UNICA report this week had Brazil’s center-south cane crush for April down 33% from the same period last year and sugar production down 39%, perhaps due to above average rainfall in the second half of the month. April 1 was the beginning of the 2025/26 marketing year. India’s weather office is forecasting the monsoon rains to hit the southern coast on May 27, five days earlier than usual and the earliest in at least five years. A strong monsoon would be beneficial for the cane crop.

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