ADMIS News
Hope for a Cease Fire Dimming
April 7, 2026
COFFEE
May Coffee was sharply low early Tuesday and managed to barley take out last week’s low. A brokerage firm projected a large global surplus for 2026/27 based on strong production expected out of Brazil, Vietnam, and Uganda. They conditioned the forecast on how well the Brazilian harvest progresses, which usually begins in May. Honduras’ exported 1.4 million bags of coffee in March, up from 1 million for the same period last year, according to data from the Honduran Coffee Institute. The US has accounted for 36.5% of cumulative shipments this year, followed by Germany at 16.1% and Belgium at 12.4%. Honduras is the largest coffee producer in Central America and the sixth largest in the world. World Weather Inc. expects waves of rain to impact coffee areas in Brazil during the next week to ten days with most areas impacted at one time or another and many getting it multiple times. Sufficient rain will fall to maintain excellent late season coffee development potential. The arrival of El Nino, which is expected during the second half of the northern hemisphere summer, could bring dry conditions to many coffee production areas, including Central America, Colombia, Indonesia, Central Africa, and the Caribbean. Much will depend on the strength of the event. Some articles describe the potential for a “record,” but it is too early to tell.
COCOA
May Cocoa was lower early Tuesday, as the market continued in its narrow trading range. Drier conditions in west Africa this week may provide some support after the generally good growing conditions there in recent weeks. Ivory Coast farmers interviewed by Reuters on Monday said that no rain fell in most of the nation’s cocoa-growing regions last week and that more moisture was needed to boost development of the mid-crop. They also said that harvesting, which is currently modest, was expected to pick up from next month. World Weather Inc. says less frequent and less significant rain is predicted for west-central Africa this week. Traders are looking ahead to the first-quarter grind data on April 16. Dealers have told Reuters they look for Europe’s grind to be down 2% to 4% and North America’s down 10% to 12% from last year. ICE cocoa stocks increased 42,135 bags on Monday to 2.417 million, their highest since September 5, 2024.
SUGAR
May Sugar extended its correction from the March 30 high early Tuesday despite higher crude oil and reduction ins Indian production estimates last week. The market had drawn support from the rally in crude oil on ideas it would encourage cane crushers to focus more on ethanol this season, but much of that may have been baked into the market already. Private forecaster Skymet said they expected India to receive below-normal monsoon rainfall in 2026, due to the arrival of an El Nino weather pattern in the second half of the June–September rainy season. They expect monsoon rainfall to be 94% of the long-period average of 868.6 millimeters for the four-month period. The state-run India Meteorological Department (IMD) has yet to issue its first forecast for the monsoon season. A below normal monsoon could reduce the cane crop. There were also reports that sugar consumption in India is declining due to a shortage of commercial gas cylinders, which has forced restaurants to scale back operations during the summer holidays. Indian trade officials told Reuters last week that they expect the nation’s sugar production to fall below consumption for a second straight year because lower cane yields due to excessive rainfall have forced mills to close faster than usual this year.
COTTON
May Cotton extended its two-month old rally early Tuesday to reach its highest level since last April. Persistent dry conditions in US cotton growing areas have raised concerns about the upcoming crop despite a prospective plantings report last week that came in higher than expected. Persistent dryness could discourage plantings in dry or marginal areas, though the market is doing its part to encourage farmers to plant. The weekly Crop Progress report showed Texas was 6% planted as of Sunday, versus 8% a year ago. With only two states reporting, 4% of the US crop has been planted versus 5% a year ago.
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