Brazil Harvest Picking Up

COFFEE

Safras & Mercado reported today that Brazilian producers sold 31% of their 2025/26 coffee crop as of July 9, up from 22% the previous month but below the five-year average of 38% for the period. Arabica coffee sales hit 29% of the expected output, and robusta sales were estimated at 35%. The new 50% tariff on Brazilian imports would severely impact Brazilian coffee shipments into the US, driving up prices in the US while leaving extra coffee on the world market. Some 33% of the coffee the US consumes comes from Brazil. In the meantime, ICE exchange certified stocks will be in high demand, which could drive the futures higher. World Weather Service expects warmer than usual in temperatures in Brazil coffee areas, with rains limited to the coast. This should support harvest. Indonesia and Vietnam rainfall is expected to trend a little lighter and more sporadic than usual. Satellite imagery suggested much of central and northern Colombia and western Venezuela received rain and thunderstorms Friday through Sunday. Northern Colombia and western Venezuela were wettest with some moderate to heavy rain suggested in a few areas. Colombia’s production has been hit with too much rain this season.

COCOA

Ivory Coast port arrivals totaled 12,000 metric tons last week, down from 18,000 the previous week 18,000 for the same week a year ago. Cumulative arrivals since the marketing year began on October 1 have reached 1.64 million tons, up from 1.63 million a year ago. This is the closest the cumulative total has been to year ago levels since October 13, and the possibility of falling behind last year’s already low levels is looking more and more likely. World Weather Service said rains have been trending the north of many cocoa production areas, which is normal for mid/late July. This pattern tends to continue into August, with seasonal rains will retuning later in August and September. They added that the dry weather should favor the mid-crop harvest and that this year’s rainfall was more than sufficient to support a good start to the main season crop, although some hot and dry weather for a while earlier this year may have had a negative impact on some of the mid-crop development and production.  Two years ago, excessive rains caused problems with disease.

SUGAR

UNICA will release their report on Brazilian Center-South sugar production for the second half of June this morning. A survey conducted by S&P Global showed an average expectation for sugar production to come in at 2.95 million metric tons, which would be down 9.8% from the same period last year. Cane crushing is expected to come in around 44.24 million tons, which would be down 9.7%. Recent dry conditions in Brazil may have supported harvest, but they may have not come in time to support production in the second half of June. There are also concerns that the cold snap last month may have damaged cane production. Friday’s USDA WASDE report put US sugar production for 2025/26 at 9.19 million short tons, down 59,000 from the June report, due to smaller beet sugar output. US sugar consumption was lowered by 165,000 tons to 12.16 million. It also lowered consumption for 2024/25 by 165,000 tons, saying industry demand for sugar has faltered. World Weather Service says rain prospects for southern India are improving for late this week through all of next week. Thailand has been drying out recently, and this trend will continue for a little while longer before there is opportunity for rain to resume. Some crop stress is expected, but the situation is not critical. Timely rain is predicted for the weekend and next week.

COTTON

Friday’s USDA Supply/Demand report had a bearish tilt, and December Cotton made a new low for the day in its wake, but it recovered back to Friday’s high overnight. The USDA report put US 2025/26 cotton production at 14.60 million bales versus an average trade expectation of 14.21 million and 14.00 million in the June update. Planted area was increased to 10.12 million acres, based on the June 30 Acreage update, but yield was lowered to 809 pounds per acre from 820 in June. The abandonment rate was lowered to 14.4% from 17% previously.  Lower abandonment in the Southwest was partially offset by higher abandonment in the Southeast, and the reduced abandonment in the Southwest implied an increase in the harvest of lower-yield acres. US 2025/26 exports were unchanged at 12.50 million bales versus 12.47 million expected. Beginning stocks were lowered by 300,000 bales due to an increase in 2024/25 exports by the same amount. 2025/26 ending stocks came in at 4.60 million bales versus at 4.33 million expected and 4.30 million in June. This put the stocks/use ratio at 32.4% versus 30.% in June, 30.4% last year, and a five-year average of 26.6%.

The dollar has firmed up over the past few weeks, which is a bearish influence on US export prospects, but the tariff back and forth is probably a bigger factor at the moment. In the latest round of threats, Mexico is in the spotlight. As of last week’s export sales report, Mexico was the sixth largest buyer of US cotton so far for 2024/25 at 656,000 bales. Vietnam was the largest at 2.956 million. World Weather Service expects west Texas cotton areas to see a drier and warmer bias over the next couple of weeks, which should help improve crop development rates.

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