CONAB Increases 2025 Output Forecast

COFFEE

Brazil’s CONAB put their nation’s 2025 coffee output at 55.7 million bags, which is a 7.5% increase from their January estimate and 2.7% higher than the 2024 crop, thanks primarily to a stronger conilon (robusta) crop. The arabica crop is expected to come in around 37 million bags, which would be down 6.6% from last year but still up from the January forecast of 34.7 million bags. While lower than recent forecasts by Rabobank and Safras & Mercado, CONAB’s revisions higher from the January forecasts are notable and suggest that the crop is better than previously expected. This also suggests that last month high price may have been overdone. Fieldwork is already occurring in robusta areas, and the arabica harvest usually begins in May or June. Earlier this week it was reported that Vietnam exported 167,000 metric tons of coffee in April, up 11.4% from a year ago, but January-April exports totaled 663,000 tons, down 9.8% from last year. ICE certified stocks increased by 6,252 bags yesterday to 838,385, their highest since February 13. Stocks have increased in 12 of the last 13 sessions.

COCOA

July Cocoa is inside a two week trading range that is more or less defined by the 100-day and 50-day moving averages. The West African mid-crop condition is looking less dire than it was a few weeks ago, as increased, seasonal rainfall has been seen as beneficial. Weekly arrivals at Ivory Coast have picked up the past couple of weeks, and growers have turned more optimistic. Grind numbers have held up better than expected in the face of record prices, but global economic uncertainty has bulls on edge. ICE certified stocks increased by 16,099 bags yesterday to 2.100 million, the highest since October 1.

COTTON

July Coffee extended this week’s rally overnight to trade to its highest level since April 25, the day it put in a two-month high. News that trade representative from the US and China would meet in Switzerland over the weekend supported equities, crude oil and cotton, as this was seen as the first concrete evidence that the two sides are negotiating. The cotton market’s fate is tied to exports and to global economic health. World Weather Service said that this week’s rain in West Texas was one of the most uniform rain events to impact the region this season and that it will improve planting conditions. However, they added that the lower US Delta will experience flooding rain through Friday, with rainfall of 2 to 5+ inches possible. Louisiana, southern Arkansas and parts of Mississippi will be most impacted, but crop damage potential should be low except in low-lying areas.

SUGAR

July Sugar gapped lower overnight, and it is approaching last week’s three-month lows  this morning. Yesterday, the USDA Foreign Ag Service put India’s 2025/26 sugar production at 35.25 million metric tons, up from 28.00 million in 2024/25 and the highest since 2022/23. The 2024/25 production was revised down from 35.50 million in the USDA’s official update in November. The market is back approaching last week’s lows, which came after the UNICA report showing a stronger than expected Brazilian Center-South production for the first half of April and CONAB forecast a 4% increase in Brazilian production this year.

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