Brazil Weather Favorable for Strong Cane Crop

SUGAR

July Sugar is lower this morning following a disappointing close yesterday. Brazilian weather appears favorable for a strong cane crop. World Weather Service said today that in Center-South Brazil rain is predicted for the next ten days in most areas, leaving soil conditions saturated or nearly saturated going into May. Drying is expected in early May as monsoonal precipitation finally winds down. The 2025/26 Brazilian marketing year officially began April 1, and the UNICA update on sugar production for the first half of April should be released next week. Sugar production for the second half of March was up 10% from a year prior. The McDougall Global View Sugar Report stated that Thai liquid sugar was still entering China despite earlier blockages by the Chinese government that were officially blamed on sanitation issues.

COCOA

July Cocoa was slightly lower overnight but was inside yesterday’s range-up move. The Ivory Coast exporters’ association GEPEX reported today that the nation’s cocoa grind rose 5.6% year-on-year in March to 53,477 metric tons. The total grind since the start of the 2024/25 season in October had reached 351,487 tons, up 0.5% from the same point last season. The GEPEX data covers six of the largest grinding companies, including Barry Callebaut, Olam, and Cargill. Ivory Coast vies with the Netherlands as the world’s largest grinder. First-quarter grind stats for Europe, Asia, and North America all came in higher than expected last week. The trade had been looking for declines of 5%-7% percent, but instead they were down 2.5%-3.45%. Apparently the high prices did less damage to demand than feared, but it could also reflect an improvement in supply. World Weather Service reported active rain in Ivory Coast and Ghana over the weekend, but warmer than normal temperatures could keep evaporation rates high. This similar pattern is expected to continue. Growers have stressed the need for active rainfall to help pods develop for midcrop production. ICE certified stocks increased 13,825 bags yesterday to 1.905 million, their highest since October 18.

COTTON

July Cotton is higher this morning despite an improvement in US planting progress in yesterday’s Crop Progress report. The market could be garnering support from modest recoveries in equity and crude oil prices this morning. The Crop Progress report, which was released after the close yesterday, showed 11% of the US cotton crop was planted as of April 20, up from 5% the previous week, unchanged from a year ago, and on par with the five-year average for this date. Texas was 16% harvested, up from 8% last week and on par with a year ago and the five-year average. The previous week, plantings were running slightly behind. The dollar is higher this morning, but yesterday it fell to its lowest level in three years, which helps US cotton export prospects. The tariffs loom large as the market waits for reports of progress in trade negotiations with Vietnam and other importers.

COFFEE

July Coffee has backed off from the 50-day moving average overnight after testing that level for three sessions in a row. The market is still under the negative technical influence of the break below a two month consolidation that came in the wake of reaching new all-time highs in February. Global coffee supplies remain tight, but it appears the market has already priced that in. The Brazilian crop is expected to be lower this year, but improved rainfall this month makes the situation appear less dire. World Weather Service said most of the key coffee areas in Sul de Minas, northeastern Sao and southern Cerrado Mineiro to northern Parana will receive “restricted” rainfall late this weekend and into the early part of next week, while some areas to the north will get some moderate to heavy rain. ICE certified stocks increased 5,961 bags yesterday to 801,549, the highest since March 13.

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