ADMIS News
COFFEE
May Coffee has managed to break above a recent consolidation area early Tuesday to trade to its highest level since February 20. Ever since the market fell into a 288.65-261.80 consolidate from July, selloff the dominated the first half of February came to a halt. The weather in Brazil may be turning a bit less than ideal, with precipitation in Sul de Minas expected to become more erratic over the coming week and temperatures trending a little warmer, according to World Weather Inc. Vietnam’s coffee areas are expected to see more frequent rainfall during the coming week to ten days, which may induce early-season flowering. Another supportive factor could be the rally in the energy markets, which could raise the cost of fertilizer and other inputs. February Honduran coffee exports totaled 1,443,736 bags in February, up 82.5% from 790,596 for February 2025, according to data from the Honduran Coffee Institute (IHCAFE). The US has accounted for 39% of cumulative shipments far in 2026, followed by Germany at 16.2% and Belgium at 13%. Honduras is the largest coffee producer in Central America and the sixth largest in the world.
COCOA
May Cocoa was higher early Tuesday despite more reports of very good weather in west Africa and a revisions higher in the 2024/25 available supply. One supportive element could be the rally in the energy markets, which could increase fertilizer and productions costs. The International Cocoa Organization raised its estimate for the global cocoa surplus in the 2024/25 marketing year to 75,000 metric tons, up from 49,000 in their previous estimate last fall. They raised the 2024/25 production estimate by 30,000 tons to 4.728 million, which would be up 8.4% from 2023/24. Grindings were lowered by 2,000 tons to 4.606 million, down 4.2% from 2023/24. ICCO also increased its estimate for the 2023/24 global deficit to 492,000 tons from 489,000 previously. They did not release a forecast for 2025/26. Ivory Coast farmers interviewed by Reuters said “unusually abundant” rains across most of Ivory Coast’s growing regions have raised expectations for a larger and longer mid-crop season. The Ivory Coast regulator, the CCC has moved up the start date of the mid-crop up to March 1, which will allow them to reduce the set fixed price paid to farmers. They are expected to announce a lower price for cocoa this week.
COTTON
May Cotton extended its selloff early Tuesday, as risk-off tendencies grew with the ongoing conflict in the Middle East and what appears to be an extending timelines for an end to the war. Crude oil prices are sharply higher again, and expectations for $100 oil seem stronger today than yesterday. While high oil prices are sometimes viewed as supportive to cotton because they raise the cost of man-made fibers, there are also concerns that oil price shocks will slow economic growth. The lower stock market can reduce demand expectations, and the strong dollar makes US cotton less competitive on the global market.
SUGAR
May Sugar was back on the upswing early Tuesday and was approaching Monday’s four week high, finding support on expectations that higher crude oil prices will encourage sugar cane processors to increase their crushing for ethanol at the expects of sugar, especially in Brazil. Traders may need to see Brazil’s state-run oil firm Petrobras increases domestic gasoline prices, to confirms a shift. Iran’s response to the US/Israelis attacks have been more robust than some had hoped, and based on comments from the US President, the timeline for an end to the operation seemed to extend further the future. With the de-facto closing of the Strait of Hormuz, the trade is also concerned about its impact on the flow of refined sugar. The closing limits the ability of sugar refineries in the Gulf to import raw sugar for processing, and then re-export the refined product to other countries in the region. According to Reuters, Dubai is home to the world’s largest sugar refinery, the Al Khaleej, which buys a lot of raw sugar from Brazil, refines it and sell to neighboring countries. There were also reports that Petrobras is selling more nitrogen fertilizer domestically in an attempt mitigate supply risks from supply disruptions from the Middle East.
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