More Harvest Pressure Coming?

COFFEE

Like the cocoa market, September NY Coffee has stalled at the 50% retracement of the recent selloff, in this case from a contract high in late April to a low earlier this month. Up until the recovery, the market had been under pressure from an advancing harvest of the robusta crop in Brazil and reports of progress in Indonesia as well. As of last week, the Brazilian robusta harvest was estimated to be around 40% complete, while the arabica harvest was around 21%, both slightly below average but not in a big way. There are also reports that Brazilian robusta growers are actively selling. Brazil’s 2025 arabica crop is expected to be down from 2024 but not by as much as feared earlier this year. ICE certified arabica stocks fell 4,400 bags yesterday to 816,269, their lowest since April 30, when they were at 813,668. Stocks are down for eight straight sessions.

COCOA

On Friday, September Cocoa completed a 50% recovery of its selloff from the May 20 high to the May 29 low, but it has not managed to move through that level since. Recent weather in West Africa has been mostly conducive to crop development, but arrivals to Ivory Coast continue to disappoint. (Arrivals were estimated at 18,000 metric tons for the week ending June 8, down from 22,000 the previous week and 29,000 a year ago. Cumulative arrivals for the 2024/25 marketing year, which began in October, reached 1.642 million tons, up from 1.537 million a year ago but the second lowest for this point in the season in at least five years.) Farmers interviewed by Reuters this week presented a mixed outlook. Some said that soil moisture is helping the mid-crop develop across most of Ivory Coast’s main growing regions and that they hoped for a mix of rain and sunshine to boost growth even more. However, others said that rains were below average last week and that the weather was often cloudy and overcast, causing them to be concerned about a drop in quality. World Weather Service reported beneficial rains over the weekend for Ivory Coast and Ghana. ICE exchange stocks increased 20,711 bags yesterday to 2.260 million, their highest since September 17, when they were at 2.262 million.

COTTON

December Cotton is lower this morning but still inside the range of the past four weeks. The generally upbeat attitude about the US-China trade talks in London, which are in their second day, provides some support, but the US crop does not appear particularly threatened, despite slow plantings in the Delta. The weekly Crop Progress report released yesterday afternoon showed 49% of the US cotton crop was rated good/excellent as of June 8, unchanged from the previous week, down from 56% a year ago, but still ahead of the five-year average for this date of 48%. Texas was 37% G/E , down from 38% last week and 45% a year ago but ahead of the five-year average of 32%. Georgia was 67% G/E, which was in line with the five-year average of 66%. Arkansas was 69% G/E versus a five-year average of 80%, and Mississippi was 55% versus 70% on average. The report also showed 76% of the US crop was planted versus a five-year average of 78% for this date. Texas was 72% planted, right on the average. Mississippi was still about 19 days behind at only 65% planted versus 93% on average. World Weather Service reported heavy rain from east-central Mississippi to central Alabama over the weekend, of 1.5 to 4 inches or more. Rainfall in West Texas over the next ten days should be sufficient to support dryland cotton planting and early development, but some areas will need more rain than others. Wet conditions in the Delta continue to delay plantings, especially in Mississippi.

SUGAR

July Sugar was higher for a second straight session overnight, but was still under the influence of a downtrend off the March highs. A early start to monsoon rains in India and Thailand have boosted expectations for their crops, even if Brazil’s harvest has gotten off to a slow start. Growers and industry officials interviewed by Reuters said India is set to produce a sugar surplus for at least two consecutive years, due to increased area under cultivation and ample rainfall expected from this year’s monsoon. This could allow the India to increase exports in 2025/26. The ample rainfall this year should benefit 2026/27 production as well. UNICA is expected to release its bimonthly report on Center-South Brazilian sugar production later this week. This report will cover the second half of May and is expected to show an improvement over the first half on the idea that drier conditions allowed for more intensive harvest and crushing activity. The last report had cane crush for the period -6% from a year ago and sugar production -7%. Cumulative crush was down -20% and sugar production was -23%.

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