Sugar Futures Rise

SUGAR

October Sugar was trading in the upper end of Friday’s big range higher early Monday and at time reached a new high for the move. UNICA last week showed steep declines in Brazil Center-South cane crush and sugar production for June. Cumulative sugar production for the 2026/27 marketing year, which began in April, fell to 12% behind year ago as of July 1 versus 2% behind on June 1. Sugar’s share of production running at 42.5% this year versus 51.0% at this point a year ago. Above normal rainfall in June slowed the harvest, but they should have recovered in July. Reduced beet production in Europe and tight supplies in India have added to the bullish outlook. World Weather Inc. says Europe rainfall is still expected to be restricted during the next ten days from UK through northern and central France, Belgium, Netherlands, Germany and areas east into Ukraine and southern Belarus. Any showers that evolve will be brief and light and not likely to be great enough to counter evaporation. Mainland areas of Southeast Asia have experienced a favorable rainfall distribution recently resulting in a relatively favorable environment for crops but southern Thailand and north-central Myanmar have need for more rain. Indian sugar prices have jumped 10% over the past month to a record high and  traders and industry officials told Reuters they are expected to remain elevated for at least the next three months as supplies tighten and festival demand pick up.

COFFEE

December Coffee was lower early Monday but inside Friday’s range. The market has been buoyed in recent weeks by slow exports out of Brazil due to heavy rains in June that lowered expectations for a bumper crop. Near term supplies continue to tighten, with ICE certified arabica stocks falling another 4,725 bags on Friday to 244,172, their lowest since late 2023. Stocks fell 20,007 bags last week. World Weather Inc. said Weekend precipitation across the world’s coffee growing areas were not much different last week. Much of Indonesia experienced a net loss in soil moisture while rain fell in portions of India, Vietnam, Central America and southern Mexico. Most of the rain was sporadic and light leaving a need for supplemental irrigation where available. Brazil is expected to remain seasonably dry, and the same is true for southern Ivory Coast, Southern Ghana and Benin production areas.

COCOA

December Cocoa was lower early Monday but inside Friday’s range. At last week’s low the market managed to hold above the 0.618 retracement of the late July-early August rally at , which gives the bulls some hope. World Weather Inc. says “typical” early August weather continued in west-central Africa during the past few days, with periodic showers and thunderstorms and warm temperatures. Most of the rain has been confined to northern parts of Ivory Coast and northern Gahana, which is normal but north of he key cocoa production region. The moisture was welcome and good wherever it occurred, but net drying conditions did dominate Friday through Sunday in central and southern Ivory Coast, Southern Ghana and southern Benin. Moisture normally comes back in late August and September, but El Nino sometimes disrupt the pattern, resulting in some drier than usual conditions into October. A close watch is warranted. Ivory Coast farmers told Reuters early Monday that below average rains, overcast skies, and a wave of cold weather last week threatened development of the main crop in most of the nation’s cocoa-growing regions. Complaining that plantations needed more sun to boost the crop.

COTTON

December Cotton extended its rally early Monday to reach its highest level since May 14, the day after it put in a contract high at 88.08. Hot weather and dry weather in the US Cotton Belt continue raise concerns about this year’s crop. The US dollar fell to its lowest level since June on Friday, which also lends support to cotton on ideas it improves US export prospects. World Weather Inc. says very little rain is expected in the southern US Plains from south-central Kansas into interior southern parts of Texas and the Delta over the next ten days, and crop moisture stress will continue to increase. West Texas will have some opportunity for showers, but resulting rainfall is not likely to counter evaporation very well and crop stress may continue. Dryland crops in West Texas will be most stressed by heat and dryness, despite showers late this week. Cotton in most other U.S. production areas are in varying condition with most crops suspected of doing relatively well. Xinjiang, China weather will be hot at times during the next ten days which will keep a strong demand on for irrigation. Crop conditions are favorable, though some deterioration may occur with the hotter weather over the next ten days.

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