Dry Weather Aids Harvest

COCOA

March Cocoa was trading in a narrow range early Wednesday. World Weather Inc. said on Tuesday that dry and favorable conditions for harvesting occurred in much of the region and that a restricted rainfall pattern will continue through the next week. This will be good for harvesting and drying. Recent unseasonable rainfall is believed to have benefited later-season production, but it also slowed harvest and may have also contributed to the slowdown in Ivory Coast port arrivals. ICE cocoa stocks fell another 9,298 bags on Tuesday to 1.627 million, their lowest since March 12. Stocks have declined for 17 straight sessions.

COFFEE

March NY Coffee was lower early Wednesday, as the market consolidated last week’s declines. London prices appear to have a slightly positive bias after reports this week with Vietnamese farmers were reportedly reluctant to sell at current prices, and it is possible this could lend support to the NY contract as well. World Weather Inc. says a high pressure center in Brazilian growing areas through the weekend and into early next week will keep rain potentials subdued, although some showers are expected. The precipitation that falls through early next week will be limited and warmer temperatures. After the recent rainfall, a period of warm/dry weather should not pose a significant threat, provided it does not last too long or the heat is not too severe. ICE certified coffee stocks increased by 9,781 bags on Tuesday to 453,764, the largest since October 23. They have increased in nine of the last ten sessions.

SUGAR

March Sugar pushed through its December high early Wednesday and reached its highest level since October 24. Tuesday Commitments of Traders Report showed managed money traders were net buyers of 10,987 contracts of sugar for the week ending December 16, reducing their net short to 166,702. This is up from a net short of 205,988 in November, but it is still historically large and leaves the market vulnerable to heavy short covering if resistance levels are taken out. The next COT release is scheduled for December 31 and should bring the reports up to date. Safras & Mercado said on Monday that it expects Brazil center-south region sugar production to reach 38 million metric tons in the 2026/27 season, which would be down 5% from the 2025/26. They expect cane crushing to increase slightly to 600 million tons from 595 million in 2025/26, but they also expect mills to allocate 47% of their cane to sugar production, down from 49% in 2025/26, as demand for ethanol is expected to grow. The rally in crude oil this week improves the economics of crushing cane for ethanol.

COTTON

March Cotton was near unchanged early Wednesday following a rally on Tuesday off a strong export sales report. That report showed US cotton sales for the week ending December 11 at 304,689 bales for the 2025/26 (current) marketing year and 14,960 for 2026/27 for a total of 319,649. This was up from 153,606 the previous week and was the strongest since November 6. It was also the second time above 300,000 this marketing year. Shipments recovered to 134,371 bales, the highest since November 6 and up from 101,577 the previous week. Cumulative sales for 2025/26 have reached 55% of the USDA forecast versus a five-year average of 71% for this point in the marketing year. The slower than normal pace may eventually move the USDA to lower its export forecast for 2025/26, thus leading to a more burdensome ending stocks setup.

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