Optimism Lifts Cotton Prices

COTTON

A more optimistic economic mood today has lifted July Cotton prices to their highest level since the reciprocal tariffs were announced. President Trump has back off from threatening to fire Fed Chair Powell, and the stock market is higher today in response. Crude oil prices are also higher, and both of the factors lend support to cotton on ideas that a strong economy helps textile demand and that higher crude oil prices make man-made fibers more expensive.  The crop progress report this week showed US plantings had caught up last after starting out behind. The season is just getting started. Only 11% was planted in the US as of Sunday, but this was right on the average for this time of year. World Weather Service says West Texas will receive some needed rain during mid-week and over the weekend, which should improve planting moisture for May. Excessive soil moisture in the Delta is expected to prevail for a while and limit planting progress.

SUGAR

July Sugar reversed higher yesterday and extended its gains a bit this morning. The market has likely found support from gains in crude oil and equity markets, which came after Trump backed off on this threats to fire Fed Chair Powell and from a less combative tone from the US Treasury Secretary regarding China. The commercial director of the French group Tereos, one of the world’s largest sugar producers, said today that he expects European Union sugar beet plantings to fall 9% next season due to as slumping prices in the bloc. World Weather Service expects Center-South Brazil rain to see rain is for the next ten days, which would leave soil conditions saturated or nearly saturated going into May. Drying is expected in early May as monsoonal precipitation winds down.

COCOA

July Cocoa traded right up to the 100-day moving average this morning, building on a rally that began last late last week off better than expected grind data. Yesterday we heard that Ivory Coast grind rose 5.6% year-on-year in March to 53,477 metric tons, and last week, first-quarter grind stats for Europe, Asia, and North America all came in higher than expected. The trade had been looking for declines of 5%-7% percent, but instead they were down 2.5%-3.45%. Weekly Ivory Coast cocoa arrivals numbers suggest the mid -crop harvest is starting to get underway.  The trade is expecting a poor mid-crop after the drier than normal conditions earlier this year. Ivory Coast farmers interviewed by Reuters said rains were below average last week in most of the nation’s growing regions, but they also said that the rains they did receive were encouraging. More will be needed to boost the mid-crop, most of which is expected to be harvested in May and June. World Weather Service expects little change in the weather pattern through the next week.  Showers and thunderstorms will impact all of West Africa coffee and cocoa areas at one time or another, but amounts and coverage will vary, with some areas getting only sporadic and light rain while others get moderate to locally heavy amounts.

COFFEE

July Coffee has pushed above the 50-day moving average this morning after attempting to do so the previous four sessions, finding support from a lower forecast for Brazilian coffee production in 2025/26. Yesterday, Rabobank put Brazil’s total 2025/26 coffee production at 62.8 million bags, down 6.4% from last year. This was below Safras & Mercado’s forecast last week calling for 65-66 million and down from other recent forecasts ranging from 64-64.5 million. Arabica production is expected to come in around 38 million bags (down 13.6%) versus 40 million expected by Safras & Mercado, and robusta output is expected to come in around 24.7 million bags (+7.3%) versus Safras & Mercado’s 25-26 million. Bank Itau BBA kept its forecast unchanged at 64.4 million bags, with arabica expected to be -10% at 40.9 million bags and robusta +12% to 23.5 million. World Weather Service expects Brazilian coffee areas to see an increase in rainfall tomorrow into Saturday after a dry period during the first half of the week. ICE certified stocks increased 4,632 bags yesterday to 806,181, their highest since February 27.

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