Brazil Sugar Crush Surges

COTTON

July Cotton was lower overnight despite higher crude oil, as the market’s main focus appears to be on the recent rains in west Texas that may have saved the crop. World Weather Inc. said yesterday that recent rain from West Texas to the Carolinas, Georgia, northern Florida and South Texas has improved crop and field conditions – some more than others. Additional moisture is expected in West Texas during the next ten days that will further raise topsoil moisture for improved planting, emergence and establishment conditions. Crop improvements are also occurring in the southeastern states with more rain expected. Soil conditions in the Delta will remain wet for a while and some drying might be welcome. This week’s Crop Progress report showed 53% of the US crop was planted as of Sunday, up from 41% the previous week and 50% a year ago

COCOA

July Cocoa was near unchanged early Thursday after but in the upper end of this week’s range. Weather in west Africa appears to be favorable for pod development for the midcrop, despite Ivory Coast grower complaints about lower rain totals. World Weather Inc, said on Wednesday that additional showers and thunderstorms are likely throughout west-central Africa during the next week to ten days. Sufficient rain is expected to maintain good cocoa development potentials. The expected arrival of El Nino next month could eventually bring drier conditions to the area, but that may not affect output until later this year or next year. Ivory Coast port arrivals for the 2025/26 marketing year have reached 1.637 million tons, putting them some distance ahead of last year, which had reached 1.602 million at this point in the season.

COFFEE

July Coffee was higher early Thursday and was pushing up against resistance at the 21-day moving average. The last time it tested that line (on May 13), resistance held. Nearby supplies are tight, but the market is awaiting the arrival of the Brazilin crop. The harvest may have been delayed a bit by rainfall, but it appears the main growing state of Minas Gerais missed most of it. World Weather Inc. does not expect any crop-threatening cold for at least another week to ten days. A few showers will pop up daily in the coming week to ten days in at least a part of coffee country. The resulting precipitation will rarely be more than 8 millimeters with much of it staying less than 5 millimeters. There will be a few exceptions that may result in some brief disruptions to farming activity. They do not expect a widespread soaking, and they believe crop maturation, harvesting and the drying of picked beans will advance around any showers that occur. Portions of Indonesia are expected to start drying down over the next week to ten days.

SUGAR

July Sugar was sharply lower early Thursday, extending a steep selloff on Wednesday that occurred in the wake of a bearish UNICA report from Brazil and continuing a selling trend that has emerged over the past several sessions. The UNICA report on Wednesday showed Brazil Center South cane crush during the second half of April was +123% from last year and sugar production was +109%. The strong crush led sugar production higher despite a greater emphasis on ethanol output.  This was above expectations from an S&P Global poll ahead of the report and higher than an estimate  from the Brazilian Agriculture Ministry earlier in the week. Dry weather in April was ideal for harvest and crushing. Weakness in crude oil this week has not helped the sugar market, either, as high crude oil prices were supposed to spark interest in crushing cane for ethanol instead of sugar. On bullish side, it might be too much to ask for Brazil’s sugar production to maintain the current strong pace, and India is still looking at a lighter monsoon rainfall this season.

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