July Cotton Higher Despite Lower Crude Prices

COTTON

July Cotton is higher this morning despite a lower open expected for the stock market and lower crude oil prices overnight. It may have helped that China’s factory output grew 6.1% from a year earlier in April, which while down from 7.7% growth in March beat the forecast 5.5% rise in a Reuters poll. Last week’s WASDE report had US 2025/26 ending stocks above a year ago and the stocks/usage ratio slightly lower, but both were close to last year and below the five-year averages, indicating ample supply ahead unless a crop problem develops or the is a surge in demand. US plantings are running behind average, primarily due to too much rain in parts of the Delta. Last week’s Crop Progress report showed 28% of the US cotton crop had been planted versus 32% a year ago and a five-year average for this date of 31%. Texas was on par with a year ago at 27% planted and slightly behind the 29% average. Mississippi was 25% planted versus 51% a year ago and a five-year average of 39%. More rains in the Delta last week could produce further delays in this afternoon’s update.

COCOA

July Cocoa prices have eased back this morning after widespread rains fell across Ivory Coast and Ghana over the weekend. World Weather Service said the increase in rainfall also helped to bring temperatures closer to normal. World Weather Service expects periodic rain and thunderstorms to continue to come and go across the region from Ivory Coast to Cameroon and Nigeria over the next week to ten days. All crop areas will be impacted with rain at one time or another and sufficient amounts will occur to maintain a favorable environment for tree, cherry and pod development.

COFFEE

July Coffee is trading inside last week’s range this morning as the market barely holds last week’s lows. The market has been under pressure recently from revisions higher in Brazilian crop estimates for 2025 and from what appears to be some harvest pressure emanating from Vietnam and Brazil. However, Brazil’s harvest appears to be running a bit behind due to rains, especially in robusta growing areas. Last week, Safras & Mercado reported that the harvest had reached 7% of the planted area as of Tuesday, up 5% from the previous week but below the five-year average of 10%. The robusta harvest was estimated at 11% complete versus 16% a year ago, and the arabica harvest was 4% complete versus 7% at this point last year. More rain fell in eastern Bahia and portions of Espirito Santo over the weekend, which are primarily robusta regions. The Brazilian Institute of Geography and Statistics (IBGE) said on Thursday that Brazil’s 2025 coffee output is forecast to hit 55 million bags, a 2.3% increase from its estimate last month. Arabica production is now expected to reach 37 million bags, 3.5% higher than last month’s forecast but still down 7.5% from 2024. Coffee sales have reached 16% of the expected output versus 20% a year ago. Arabica sales have reached 22% of expected output, similar to last year but below a long-term average of 31% . Robusta sales have reached 7% of expected output versus 15% a year ago

SUGAR

July Sugar tried to extend last week’s decline overnight but turned higher this morning. German farmers have reduced sugar beet plantings for harvesting in autumn 2025 by 6.6% percent on the year to around 408,500 hectares, German’s national statistics office said today. There were also reports that sugarcane crushers in Brazil and could start shifting towards more ethanol in their product mix if sugar prices continue to fall relative to ethanol. The International Sugar Organization raised its forecast for a global sugar deficit to 5.47 million metric tons in 2024/25 from a previous estimate of 4.88 million in, due primarily to lower than expected production in India and Pakistan. They put India’s 2024/25 production at 26.09 million tons, down from a previous forecast of 27.27 million and well below the 32.20 million the previous season. Pakistan’s production outlook was cut to 5.74 million tons from 6.16 million previously. Global sugar production was seen at 174.80 million tons, down from a previous projection of 175.54 million. However, an industry meeting in New York last week produced estimates for a global surplus for 2025/26 ranging from +400,000 tons to +1.53 million. Brazil’s production was expected to be up 4-5% from 2024/25, with India’s expected to be up 22-24% and Thailand’s expected to be up 11-14%. Last week’s UNICA report showed a sharply lower Brazilian Center-South production versus a year ago for the second half of April, partially attributed to rain but a bigger decline than expected.

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