Brazil Rain Pressures Coffee

COFFEE

March Coffee was inside the lower half of Tuesday’s range down action early Wednesday. The market was down sharply on Tuesday as it followed through on Monday’s break below a five month consolidation. Consistent rainfall in Brazil is pointing to a strong crop this year. World Weather Inc. expects frequently rainfall in Sul de Minas, Zona da Mata, and Cerrado Mineiro during the next week with slightly lighter rain expected later next week. The precipitation will either maintain saturated soil conditions or induce such conditions. They say coffee will stay in good condition throughout the forecast period. Variable daily rainfall is expected to continue across western Venezuela and Colombia through the next week.  All coffee areas will be impacted at one time or another, and sufficient amounts will occur to maintain favorable ongoing production outlook.

COTTON

March Cotton fell to a new contract low on Tuesday, the second time this week, and it was close to taking out that low early Wednesday. The market has traded in a general downtrend over the past several months as US the export pace has been slow, perhaps even slower than expected. Weekly export sales reports have had occasional bright spots, but they haven’t been consistent enough to change the overall picture.  Concerns remain for growing conditions in Australia and for soil moisture ahead of planting in the US. World Weather Inc. reports that temperatures in Australia have cooled in many areas. Rain is expected to fall over New South Wales from northwest to east-central parts of the state this weekend into early next week, but the precipitation will be concentrated on a narrow band, leaving other areas too dry. South Texas cotton areas are expected to stay dry for much of the next two weeks, raising concerns about planting moisture in early March. West Texas will also continue to be drier than usual. Earlier this week Cotlook lowered its global supply surplus estimate for 2025/26 to 3.86 million bales from 4.46 million  previously.

COCOA

March Cocoa was lower early Wednesday following a recovery rally on Tuesday that lifted the market off contract lows. Ivory Coast has jailed two union leaders, accusing them of making false statements regarding the amount of unsold cocoa. The selloff in cocoa last week was attributed in part to those statement. The union leaders had said that 700,000 metric tons of Ivory Coast cocoa remained unsold, but the head of the Ivory Coast’s regulator, the Coffee and Cocoa Council said that is impossible. The CCC maintains that the nation expects to harvest at total of 1.4 million tons this season ad that 1.1 million tons have already been sold (based on the weekly port arrivals data), which would mean that just 300,000 remain unsold. That 700,000 number that the union leaders cited had sparked ideas that Ivory Coast’s production this year was much higher than expected. The CCC head alleged that the union leaders were “used and manipulated” by unidentified actors attempting to weaken the sector, but he did not elaborate further. Both detained union leaders have rejected the accusations. The trade is still concerned about low demand brought on by high cocoa prices and by reports buyers are not willing to pay the official price established by the CCC.

SUGAR

March Sugar gave back some of its gains from Tuesday following a steep selloff on Friday to its lowest level since November. The market managed to hold above the November 6 contract low on the selloff, but just barely. Analysts speaking at the Dubai Sugar Conference have called for another global surplus in 2026/27 but not as large as this year. Covrig Analytics put the surplus at 1.4 million tons, smaller than the 4.7 million for 2025/26. That 2025/26 number was a revision higher than the 4.1 million they forecast a year ago. They did warn that the outlook could change if El Niño emerges later this year.

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