Brazil Rain Slows Coffee Harvest

COFFEE

September Coffee reversed higher on Monday after falling through technical support on Friday. World Weather Inc. said another round of rain fell early in the weekend from northern Parana to Sul de Minas, Brazil, which may have raised concerns about more harvest delays. Some areas have seen frequent rain recently and would welcome drier conditions, which they may get Tuesday and Wednesday. Periodic rain will maintain favorable soil moisture in parts of Central America, southern Mexico, Vietnam and Ethiopia. Rain in other areas will be more sporadic and light; including west-central Africa, Indonesia, the Greater Antilles, Peru and parts of Mexico. Brazil’s harvest is still behind, but it has been advancing. ICE certified arabica stocks fell 4,566 bags on Friday to 311,317, their lowest since February 21, 2024. Stocks fell 21,628 bags last week.

SUGAR

October Sugar was lower early Monday and was coming close to taking out Friday’s low. Sharply lower crude oil prices today are pulling support from sugar on ideas this will lessen the incentive for cane crushers to focus more on ethanol production at the expense of sugar. The market drew support earlier this month on concerns about Europe’s beet crop in the wake of extreme heat and a lack of rain there, but it has not sustained that rally despite reports of wildfires and evacuations in Spain and France. Heavy rains in June slowed the cane harvest in Brazil and lowered sugar output as well. Drier conditions have returned to some degree, which may have help harvest and crushing activity advance, but the trade awaits the latest update

COTTON

December Cotton was slightly lower early Monday following a modest decline at the end of last week. The market has been in a general uptrend since early June but the move has been choppy. Persistent dry conditions in West Texas have provided underlying support, but it is important to keep in mind that it is not too late for some timely rains to  boost expectations substantially, and El Nino could bring needed moisture in August. Last weeks export sales report was poor for the second straight week, and that seemed to spark the selling on Thursday. China emerging as the second largest buyer may have been the one highlight of the report. Sharply lower crude oil is negative for cotton as it makes polyester cheaper to produce, and the sharply higher dollar today is negative for cotton because it US exports more expense on the global market.

COCOA

September Cocoa lower early Monday as the market continued to drift away from the seven-month highs from early in July. El Nino still poses a threat to global production in 2026/27, but the 2025/26 mid-crop in Africa appears to be coming in strong. World Weather Inc. says some rains were concentrate over the northern areas of Ivory Coast and Ghana over the weekend, but the central and southern received only a few brief showers and thunderstorms with poor coverage. This is not unusual for this time of year. They look for rain to be erratic in cocoa country from Ivory Coast to Cameroon and Nigeria during the next week to ten days. Some showers and thunderstorms will develop in parts of the region each day and all areas will eventually be impacted at one time or another by early next week. All of the rain will be welcome, but most of the greater amounts will stay north of the most important production areas. Rains would normally return in late August and September, and the trade will be anxious to see if El Nino hinders that occurrence.

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