Brazil Weather Gradually Improving

COFFEE

Brazil is seeing a gradual improvement in rainfall, but it is not out of the woods yet. World Weather Service reports that rain is slowly returning to some of the coffee areas in Brazil and that this will continue for the coming 7-10 days. However, the totals for the entire 10-day period ending March 29 will be lighter than usual, leaving need for greater rain. Temperatures will be warm, although not hot, which is an improvement over recent trends. Expectations are already low for the 2025/26 crop but the market already reached all-time highs in February when weather concerns were at their highest. The trade expects the arrival of Vietnam’s crop to ultimately relieve tight robusta supplies. The Brazilian real reached a new high for the move yesterday, its highest level since November 7. The strong currency reduces the incentive for Brazilian growers and roasters to sell for export. ICE certified arabica stocks fell 3,032bags yesterday to 787,609, their lowest since March 5. They are down 14,688 since last Thursday.

COTTON

May Cotton lost its upward momentum when it failed to close above the 100-day moving average this week. Yesterday, S&P Global lowered its U.S. 2025 all-cotton plantings forecast to 10.2 million acres, down 250,000 acres from its estimate in January and down nearly 1 million acres from last year. This is slightly higher than the USDA Outlook Forum forecast of 10.0 million and goes against some traders’ expectations that actual plantings will be lower still. The dollar higher overnight after falling to its lowest level since October 15 yesterday, but its downside momentum has slowed. Crude oil was initially lower in the wake of news of a limited cease-fire in Ukraine but bounced after both sides appeared to break it. Moisture deficits in Texas and the Carolinas could delay plantings, but the 8-14 day forecast shows above normal chances in south Texas, an area that is in dire need of rain for planting. The trade will be anticipating tomorrow’s Export Sales report to see if sales and exports have continued their recent relatively strong pace. Last week’s report showed net sales of 271,814 bales for the 2024/25 (current) marketing year and net sales of 110,176 for 2025/26 for a total of 381,990 for the week ending March 6. Sales were the highest since January 16. Cumulative sales were only 418,000 behind a year ago, the narrowest margin so far. Shipments at 403,461 bales were the highest for the marketing year so far.

SUGAR

May Sugar has positive momentum with its move above the 20-cent level this week, but it also has a heavy period of consolidation above there from last fall to work through. There are ongoing concerns that India’s production will be lower than expected in the wake of early mill closings, and traders doubt that sugar producers will reach their export quota of 1 million tons this year. Dry weather in Brazil has also raised concerns about their upcoming cane crop after their unimpressive rainy season, but it is too early to tell. The Brazilian real reaching its highest level since October also lowers the incentive for crushers to sell. The new season begins April 1, and crushing normally begins by now. There are also indications that Brazilian crushers may have an incentive to boost ethanol production at the expense of sugar. Comments from the Brazilian Minister of Mines and Energy this week touting a 30% ethanol mix in gasoline has raised speculation that the official mandate could be increased from the current 27%. The recent UNICA report showed Brazilian Center-South 2024/25 ethanol production was up 3.2% from a last year as of March 1, despite a 5.0% decline in cane crush. Sugar production was down 5.6%.

COCOA

Reuters reported yesterday that pod counters and exporters they interviewed were estimating Ivory Coast’s midcrop at 280,000 to 300,000 metric tons, down 40% from 500,000 last year and a 10-year average of 550,000. They blamed an unusually long dry season and limited, patchy rainfall in the main production regions. They said that larger pods should be more prevalent by now, that there were mostly flowers and small pods (cherelles) on trees. The exporters warned that the slow development of the crop will delay arrivals. The mid-crop season officially begins on April 1. In their recent update, ICCO put Ivory Coast’s total production for 2024/25 at 1.850 million tons, up 176,000 from last year, an 11% increase. Weekly arrivals usually start to pick up by now, and they tend to peak in mid-May. Last week’s arrivals were estimated at 14,000 tons versus a five year average of 22,000. The five-year average peak at 41,800 on or around May 18. World Weather Service says rainfall in recent weeks has been sufficient to support a good start to the cocoa development season in Ivory Coast and Ghana. Rain farther to the east has been more sporadic and light with some need for greater rain. Some of the greatest rain was reported over the past week in Ivory Coast and Ghana, but rain during the next week will be lighter and more sporadic. Ivory Coast’s cocoa grind totaled 52,461 tons in February, down 4.7% from a year prior, according to exporter association GEPEX. The total for 2024/25 has reached 298,010 tons, down 0.3% from 2023/24. Ivory Coast has a total grinding capacity of 712,000 tons. ICE certified cocoa stocks increased 21,113 bags yesterday to 1.758 million, their highest since November. Stocks have increased for nine straight sessions and are up 324,099 since March 5 The World Cocoa Foundation meets for its annual partnership meeting today and tomorrow in in Sao Paulo, Brazil.

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