Good Weather Lifts Cocoa Hopes

COCOA

Weather conditions in West Africa have been conducive to a cocoa production, and growers in Ivory Coast are expressing optimism for the upcoming main crop. Ivory Coast farmers interviewed by Reuters this week said ample moisture and sunny spells were boosting pod development. Some farmers said deliveries from the bush were strong last week, but a only a small number of buyers were present due to security fears linked to the presidential election this week. Ivory Coast ended up reelecting President Alassane Ouattara for fourth and third consecutive term, as expected, with 89.8% of the vote. It is possible that sales could pick up now that the election is over. Port arrivals in Ivory Coast have started out slow, with cumulative arrivals reaching just 214,000 metric tons this week, down from 285,000 (-25%) from a year ago and a five-year average of 298,000. World Weather Service says seasonal rain in West Africa continues to slowly retreat to the south, reducing rain in northern cocoa production areas. They expect periodic rain to continue, which will be welcome but so will be the net drying that occurs in northern production areas, which is normal for this time of year. Cocoa needs good rain but also needs sunny spells to avoid disease. ICE stocks fell 1,699 bags yesterday to 1.842 million, the lowest since March 31.

COFFEE

December Coffee is lower again today on ideas that the tariffs on Brazilian coffee imports will be lifted. Brazilian President Luiz Inacio Lula da Silva was very upbeat about the prospects for a trade agreement with the US in the wake of his meeting with President Trump yesterday, but Trump was a bit cagey. Lula said that Trump had “guaranteed” that the two countries would reach a deal on trade and that an agreement would be reached “faster than anyone thinks.” Trump said he had a “good meeting” with Lula, who he described as “a very vigorous guy,” but was uncertain about the prospects for a deal. Lula said he would be willing to discuss any issue with Trump and was also willing to help the United States on the issue of Venezuela. One thing of particular interest for the Trump administration would be a deal on rare earth metals, of which Brazil is estimated to have a large supply in the ground, second only to China. Trump did say on Monday that coffee is among the products included in a new trade deal with Vietnam, which would exempt it from a 20% tariff. World Weather Inc says additional showers and thunderstorms are expected most days next week in Brazilian coffee growing regions but that amounts will continue a to be little lighter than usual. Most coffee areas should get rain at one time or another next week. They added that frequency of rain will almost be more important than the quantity, though greater volumes of rain will be needed to get moisture down deep into the soil for better tree and cherry development for the 2026/27 crop. Some late season flowering may occur with the precipitation that falls late this week and into the weekend. The coffee crop in eastern Cuba is expected to see damage when Hurricane Melissa moves across the island tonight and early tomorrow. ICE certified stocks increased 2,970 bags yesterday to 450,743 after falling to their lowest since March 11, 2024. There are no bags currently pending grading.

COTTON

December Cotton was higher overnight and was working back towards yesterday’s three-week high. The framework trade agreement expected to be signed by President Trump and Chinese President Xi later this week has cotton traders hopeful that it will lead to better US cotton export sales. Even if China doesn’t buy US cotton, the possibility that an agreement would slow or stop the “trade war” between the  two countries could be good news for the global economy and for cotton consumption. Heavy rains in Indian cotton growing areas may damage or even destroy a portion of that nation’s cotton crop. World Weather Inc. says Tropical Cyclone Montha over the Bay of Bengal and another disturbance over the Arabian Sea will bring rain to a large swath of India this week. Harvesting and general fieldwork will likely be sluggish or come to a standstill in the wettest locations. Unharvested crops could see significant quality declines. West Texas cotton areas will experience frost and freeze conditions Wednesday and Thursday that will end the growing season for some areas. This is normal for this time of year.

SUGAR

March Sugar is hovering around yesterday’s contract lows this morning. The nearby contract has fallen to its lowest level since December 20 as the bulls seem to be throwing in the towel. Strong crops are expected out of Asia and Brazil this year, and the long term demand outlook is being damaged by the success of weight loss drugs. Heavy rains in India are expected to damage crops like soybean and cotton, but there has been no mention of sugar cane. Cane is usually harvested in December-March, which suggests that the rains may be good for crop development.

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