Harvest Delays Lift Cocoa

COCOA

December Cocoa was higher early Thursday and appeared to be breaking out to the upside from triangle pattern formed over the past 6-7 weeks, perhaps supported by concerns expressed by Ivory Coast’s regulator, the Coffee and Cocoa Council (CCC) over harvest delays for the upcoming main crop. Sources told Reuters that they CCC expects congestion at the key cocoa ports of Abidjan and San Pedro in November and December, as exports rush to beat the EU deforestation regulations that go into effect at the end of the year. They said the main cocoa crop had been delayed by 8-10 weeks due to difficult weather conditions, insufficient farm maintenance and the strength of the mid-crop, which delayed development of the main crop.  The group expects total arrivals from the September-February main crop to be no more than 1.4 million tons. About 900,000 tons are expected to reach the ports between October and December, compared with 1.1 million in the same period last year. World Weather Inc. says scattered showers and thunderstorms are expected to persist in west-central Africa through the next week.  A boost in rain is expected Friday into the middle of next week when most areas see multiple rounds of light to moderate rain. This could counter some latent concerns that El Nino would spark a delay in the return of seasonally wet weather.

COTTON

December Cotton approached last week’s contract highs overnight as the market continued to draw support from declining crop conditions in the US. World Weather Inc. says showers in Oklahoma, West Texas and the Texas Blacklands over the next few days will bring some temporary relief from the hot and dry weather, the relief will be temporary, with more heat and dryness likely this weekend and into next week. The Delta has been too hot and dry recently, but some partial relief is possible over the next few days. The nearby Dollar Index is working steadily higher this week after falling to its lowest level since the middle of May last week, which does raise concerns about US competitiveness on the global market, but the 30% increase in cotton prices since February may outweigh changes in the currency. The export sales report will be released today. Last week’s report showed US cotton sales for the week ending August 13 at 209,360 bales for the 2026/27 (current) marketing year and 64,856 for 2027/28 for a total of 274,216. Aside from the transition week from the old to new crop years, that was the second strongest sales week since early June. Cumulative sales for 2026/27 had reached 4.236 million bales, up from 3.233 million at this time last year but below the five-year average of 5.032 million.

COFFEE

December Coffee sold off sharply Wednesday and early Thursday after failing to take out last fall’s contract highs on Tuesday. Cooxupe, Brazil’s largest coffee cooperative, said on Wednesday that its farmers had harvested 87.5% of their 2026 crop as of August 21, up from 81.1% the previous week but down from 91.3% at this point last year. The Brazilian harvest has been running behind a year ago, but these numbers suggest it is getting closer to completion. The selloff suggests more Brazilian supplies are hitting the market. One story claimed that most warehouses in Brazil were no longer accepting new coffee supplies as space was getting filled and that farmers, who had been holding back in hopes of higher prices, were having starting to sell. ICE robusta coffee reached a 9-month high on Tuesday, adding to pressure on the market. ICE certified arabica stocks are still falling. They were down 800 bags on Wednesday to 224,617, their lowest since December 4, 2023. World Weather Inc. say enough rainfall could hit Brazilian coffee areas next week to induce a few pockets of flowering, especially since additional follow-up showers are possible during the latter part of next week and into the following weekend.

SUGAR

October Sugar was higher early Thursday in a manner that suggests it may make a run at last week’s spike high at 18.26. The market may have drawn support off ideas that Brazilian sugar production for the first half of August will show another decline relative to last year.  A survey of 11 analysts conducted by S&P Global Energy’s Platts unit has Brazil center-south sugar output in the in the first half of August at 3.39 million metric tons, down from 3.63 million for the same period last year. This is despite expectations that cane crush will be around 48.73 million metric tons, up from 47.81 million tons a year ago. Ethanol output (including corn) is expected to reach 2.52 billion liters, up 15.2% from the 2.19 billion liters a year ago. In the same period last year, 55% of cane went to sugar and 45% went to ethanol, this year they expect 50.6% going to sugar and 49.4% going to ethanol. World Weather Inc. pointed out the very strong to “super” El Nino events of the past have tended to produce above normal precipitation in southern Brazil during their winter, spring and a part of summer. This year’s winter weather has been plenty wet in the south of Brazil, which could benefit sugarcane development.

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