ADMIS News
SUGAR
Sugar prices have flirted with a downside breakout this week, but they continue to hold their ground above Tuesday’s low as well as the late August and September lows. The market received a mild boost following news that Pakistan’s mills will not start crushing until next month unless the government approves the export of 400,000 tonnes of surplus sugar. The slide in the Brazilian real has incentivized Brazil’s Center-South mills to switch some of their output from ethanol to sugar, and that may continue if crude oil and gasoline extend their November selloff over the next few weeks. Brazil’s 2026/27 Center-South cane crush is now expected to fall short of last season’s crush total, and that could result in full-season 2026/27 Center-South sugar production falling by more than 4 million tonnes from 2025/26. In addition, upcoming sugar production from India and the EU has been negatively impacted by hot, dry weather, and the expected strength of the current El Niño weather event will disrupt 2027/28 global production as well.
COCOA
Cocoa prices extended their recovery move on Thursday and are closing in on a weekly reversal from Tuesday’s 4 1/2-month low. With the market still holding onto a sizable net spec short position in the latest COT report, the cocoa market could see significant short-covering going into the weekend. The US Climate Prediction Center said the current El Niño weather event continues to strengthen and will remain strong-to-very strong through the January-March timeframe. As a result, drier-than-normal conditions that West Africa normally receives during El Niño will not only intensify but also continue long enough to negatively impact the region’s 2026/27 mid-crop cocoa production. Forecasts for top-producer Ivory Coast to have as much as a 25% decline in this season’s cocoa production may not be an exaggeration, and Ghana is likely to have a severe decline in its cocoa output as well.
COFFEE
Coffee prices have pivoted sharply to the upside on Thursday and with further strength early today, may complete a weekly reversal from Thursday’s 4 1/2-month low. Coffee’s turnaround came despite the Brazilian real extending its post-Brazil election selloff to a 17-month low, which has encouraged additional selling and exports by Brazilian producers over the past 2 1/2 weeks. While Brazil’s output this season has been running ahead of last season, upcoming production from Colombia and Central America may be in jeopardy as the current El Niño weather event continues to strengthen. Vietnam’s upcoming 2027/28 Robusta crop is likely to be negatively affected by El Niño as well, as dry conditions early next year will drain reservoirs needed to replenish coffee trees. High fuel prices have hurt coffee’s out-of-home demand outlook, but it could see improvement if crude oil prices extend their pullback.
COTTON
Cotton’s coiling price action since an outside-day higher close and reversal on November 4th may be setting the market up for a trend decision. With a sizable net spec long position and bearish outside markets, cotton remains increasingly vulnerable to a week-ending downside breakout. While today’s US export sales report may provide near-term support, the Brazilian real has lost more than 11% in value in less than 3 weeks. As a result, Brazilian producers have received a significant advantage over US producers by exporting their cotton output, and that will continue to pressure cotton prices. Crude oil prices have not recovered from the November selloff, which has cheapened petroleum-based fabrics such as polyester and nylon. If crude oil extends its pullback, cotton prices will receive additional carryover pressure that could lead to a retest of the November lows.
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