Brazil Cane Prospects Slipping?

SUGAR

October Sugar was higher overnight in a possible reversal of last week’s decline. The market may be finding some support from crude oil, which has turned higher as the optimism about a peace deal between Russia and Ukraine has faded. Another supportive factor for sugar is the apparent slowdown in cane field productivity in center-south Brazil. Yesterday the sugarcane technology company CTC said yesterday that productivity fell to 81.3 metric tons per hectare in July from 86.1 tons the previous year,  a 5.6% decline. Recoverable sugar declined 4.8% to 140 kilograms per ton. The UNICA report on Friday had second half of July production falling to 0.8% below year ago levels after being 15% above during the first half, which also suggests that Brazil’s 2025/26 production could continue to lag year-ago.

COFFEE

December Coffee is lower this morning but inside yesterday’s range-up move. The Brazilian coffee cooperative Expocacer said yesterday that the cold snap earlier this month reduced the size of the 2026/27 coffee crop in Brazil’s Cerrado Mineiro growing region by around 412,000 60-kg bags. This represents about 1% of Brazil’s total arabica production for 2025/26, currently estimated at around 40.9 million bags.  Of the nearly 13,000 hectares evaluated by Expocacer, 1,173 showed frost-related damage. They also said damage assessments will continue.  Cooxupe, Brazil’s largest coffee co-operative, said on Tuesday that its farmers had harvested 86.1% of their 2025 crop as of August 15, up from 80.4% the previous week. World Weather Service says warmer-than-normal weather continues to build up across Brazil and that coffee areas will become warmest later this week and into early next week. The heat and dryness may stress a few crops, but the situation is not unusual for this time of year. Seasonal rains usually begin in the second half of September as scattered periodic showers and thunderstorms.

COCOA

December Cocoa was lower overnight but inside yesterday’s range, as the market appears to have found support at the 200-day moving average. Dealers told Reuters yesterday that the market was underpinned by concerns about dry weather in West Africa. The rains have shifted north of the main growing regions since late July. World Weather Service says this is not unusual for this time of year and that the rains typically return in late August/early September. They did warn that the greatest amounts may be a slow in returning, which may raise concern about the crop. Most of the precipitation expected during the next week will be light and sporadic, leaving some production areas in a drying trend. Growers this week spoke of satisfactory pod development and plenty of large, near-ripe pods on trees. Some complained about it being too cool.

COTTON

December Cotton is higher this morning but inside the range of the past two sessions. The market got a shot in the arm last week from the USDA report that showed smaller than expected US plantings and lower than expected ending stocks for 2025/26. The limiting factor has been the dismal pace of export sales, which are the slowest in a decade. Yesterday’s report that India has suspended an 11% import duty on cotton until September 30 may improve attitudes about US export prospects. This move is seen by some as a signal to the Trump Administration that the Indian government is willing to address US concerns about agricultural tariffs. It also eases pressure on India’s garment industry. India’s apparel sector faces tariffs of nearly 60% on shipments to the United States from later this month. President Trump earlier this month announced an extra tariff on Indian goods as punishment for New Delhi’s purchases of Russian oil, doubling the total duty to 50%. India is the 15^th largest buyer of US cotton so far for the 2025/26 marketing year at 45,436 bales (out of a total of 3.127 million). The largest buyer is Vietnam at 589,307. The recent weekly export sales report showed India was the sixth largest buyer for the week ending August 7 at 9,227 bales. World Weather Service says West Texas rainfall is expected to be limited over the next ten days to two weeks, which will lead to net drying. Temperatures should be seasonable. US crop conditions are above normal, and Texas conditions are much above normal. However, the dryland crop needs moisture, especially in the southwest part of the region.

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