ADMIS News
SUGAR
October Sugar extended its rally early Wednesday to reach its highest level since August 15, 2025. Lower production out Europe due to drought, lower production out of Brazil, and high prices in India have helped drive this market higher. The rally in crude oil also supports sugar on ideas it will induce more crushing for ethanol, but that has to be weighed against higher sugar prices. Recent dry weather in Brazil should help their production recover after a setback in June when rains interrupted harvest and crushing activity, which mean more sugar supply could be coming soon. India is considering restricting the amount of sugarcane used for ethanol in the 2026/27 season that begins in October to boost sugar output. The government has already banned sugar exports. Last week. Brazil reported July sugar exports at 2.922 million metric tons, down from 3.589 million for the same period a year ago. UNICA data last week showed cumulative sugar production for the 2026/27 marketing year, which began in April, had fallen to 12% behind year ago as of July 1 versus being 2% behind on June 1. Weather forecasts continue to point to above-normal temperatures and limited rainfall in Europe, further lowering prospects of their beet crop. India’s move to expand sugar production could provide relief to tight supplies, and the rally world prices could also induce Brazilian crushers to increase their sugar mix relative to ethanol. Europe’s crop could be beyond repair.
COFFEE
December Coffee was higher early Wednesday but inside Tuesday range. The market rallied sharply on Tuesday on the news of a devastating earthquake in Colombia that, among other things, has suspended coffee exports out of that country. The president of a coffee exporters’ association said Colombian coffee exports were practically paralyzed after the earthquake disrupted operations at the country’s main port and caused blockades on key roads. Buenaventura, Colombia’s primary coffee export port, is virtually inaccessible. The earthquake occurred near an important producing and processing region as well as a key port. World Weather Inc. says not much precipitation is expected in Brazilian coffee production areas over the next ten days. Temperatures will remain very warm with daily highs in the upper 20s through the middle 30s and low temperatures at night slipping to the teens and lower 20s. These conditions are favorable to harvest and not threatening to trees.
COCOA
December Cocoa was near unchanged early Wednesday and in the bottom half of Tuesday’s range. The market was lower on Tuesday, apparently on a ideas of a strong setup for the upcoming (2026/27) main crop in West Africa. West Africa remains dry, which is typical for this time of year, but rains need to return soon, or traders will start to worry that El Nino will keep things dry and lower crop prospects. Ivory Coast cumulative arrivals since for the 2025/26 crop have reached 1.992 million tons, up from 1.643 million last year at this time and the highest for the period since 2023. It is also above the five year average of 1.954 million. ICE warehouse stocks fell 10,641 bags on Tuesday to 3.345 million, their lowest since July 24.
COTTON
December Cotton was approaching Monday’s three-month high early Wednesday ahead of the USDA supply/demand report. The damage to the US crop from an extended hot and dry pattern in Texas and the Delta has traders expected USDA to ultimately lower its production forecast, even if it doesn’t do so in today’s report. World Weather Inc. has reiterated that west Texas and the Texas Blacklands need rain in unirrigated fields to support the best production potential. The Delta is also not expected to see much rain either, which could also lead to crop moisture stress. Dryland crops in West Texas will be most stressed, despite showers late this week. Recall that US crop conditions fell to 40% G/E this week from 42% last week and 47% on average, while Texas fell to 24% from 28% last week and 34% average. A higher bias in crude oil and weaker dollar this week are also viewed as supportive to cotton.
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