ADMIS News
COTTON
May cotton was sharply higher early Thursday and traded to its highest level since January 30. The market may be drawing some support from crude oil, which has seen a rally this week off expectations for a US strike against Iran, but it could also be technical short covering given the large net short held by the funds. The sharp decline in the March/May spread suggests longs rolling out of the March contract into the May ahead of first notice day for March on Monday. At their annual Outlook Conference, USDA economists put US 2026/27 cotton plantings at 9.4 million acres, down from 9.75 million in their baseline projections last fall and up from 9.28 million in 2025/26. Production for 2026/27 was forecast at 13.6 million bales versus 13.9 million in 2025/26, and exports were increased to 12.2 million from 12.0 million this year. This would put ending stocks at 4.2 million bales versus 4.4 million in 2025/26 and the stocks/use ratio at 30.4% versus 32.4%.
SUGAR
May Sugar was slightly higher overnight after but still below Tuesday’s high. The move to new contract lows last week met with some modest short covering, as the market appears to be in search of a low that has yet to establish itself. The large global surplus for 2025/26 is expected to shrink in 2026/27 but not disappear altogether. Low prices are expected to reduce beet plantings this year, lower the incentive for growers to invest in cane crops, and encourage ethanol production over sugar. Heavy rains in India may have lowered their cane output. A Reuters article this week said internal estimates from five unnamed trade houses put production at 28.5-29 million metric tons for 2025/26, down from the Indian Sugar & Bio-Energy Manufacturers Association forecast of 30.95 million from earlier this month. This week’s UNICA report for the second half of January showed an increase Center South Brazil crushing from the first half of the month, but sugar production was lower because of the increased emphasis on ethanol. Crushing activity in a seasonally slow period, which means the overall impact on production volume is minimal. Still, the drop in sugar’s share of crush to 6.6% is dramatic. The US Climate Prediction Center said La Niña is still present, but it expects a shift to ENSO neutral by Spring. However, they also gave a 56% chance for the neutral conditions to continue through the Northern Hemisphere summer, which could help the Thai and Indian crops avoid a poor monsoon season.
COCOA
May Cocoa was slightly lower early Friday following another large decline on Thursday. Selling continues as a strong pace on reports of burdensome supplies in Ivory Coast and Ghana because buyers are balking at the high, fixed farmgate prices, but it may be too much to ask for the market to keep pressing lower after the steep declines this month. Ghana last week lowered its price for sales going forward, and Ivory Coast is reportedly considering a similar move. However, they have not lowered prices for crops that have already been harvested, leaving large amounts of cocoa unsold.
COFFEE
May Coffee bounced off a six-month low on Thursday and extended the recovery a bit early Friday, but it seemed to run into some resistance at the 9-day moving average. Good growing weather in Brazil has raised expectations for the 2026 crop, which traditional begins to be harvested in May or June. World Weather Inc. says scattered showers and thunderstorms are beginning to ramp back up across coffee areas of Brazil and that the rain expected over the next week will be sufficient in restoring favorable soil moisture and supporting ongoing crop development. This week the Brazilian firm Valor International suggested that too much rain could be encouraging phoma leaf spot and coffee leaf rust on arabica plantations.
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