Too Much Rain in Columbia

COFFEE

September Coffee is lower this morning and is approaching last week’s 7 ½ month low. The market has been under pressure recently from an active harvest and a lack of a freeze threat in Brazil and a looser robusta supply Brazil’s 2025/26 arabica crop is expected to be down from last year, but it has been revised higher this spring.  Vietnam’s National Statistics Office said the nation exported 943,000 metric tons of coffee from January through June, up 4.1% from the same period last year. June exports totaled 119,000 tons, up 53% from a year ago. One supportive factor could be reduced production out of Colombia later this year due to the excessive rains the nations has been seeing recent. The head of Colombia’s national coffee federation (FNC) told Reuters on Friday that the rains are expected to lower the country’s 2025/26 crop 1 to 1.5 million bags. This would likely impact coffee harvest between October and December. Colombia, is the world’s third-largest coffee producer after Brazil and Vietnam and the second largest arabica producer. Brazil exported 133,863 tons of green coffee in June versus 203,278 for the same period last year. World Weather Service says mild to warm weather is expected to prevail in Brazil coffee production areas during the coming week to ten days with no risk of crop threatening cold through the middle part of next week. Colombia is expected to see periodic showers and thunderstorms during the next week to ten days, which could keep traders on edge in light of the news from the FNC head.

COCOA

September Cocoa extended Thursday’s losses slightly overnight to its lowest since April 17, as the market is influenced by its break below the 200-day moving average on Friday. A lack of weather problems in West Africa is boosting expectations for the 2025/26 main crop, which officially begins October 1. Last week, Commodity Risk Analysis forecast a 325,000-ton global cocoa surplus for the upcoming 2025/26 season, which they said was the first surplus in three years. They credited investments in cocoa production in Ecuador, Peru, Nigeria and Brazil in the wake of higher prices. There  were also reports last week that Ghana may start its main crop sales in August this year and raise prices paid to farmers in a bid to deter smuggling. World Weather Service says West African rain has been shifting northward recently but that this is typical for this time of year. Central and northern production areas saw “impressive” rain over the weekend, with a few areas reporting 38 to 113 millimeters and most of the southern precipitation lighter, varying from 8 to 32 millimeters. More rain is expected over the next week to 10 days, which should be sufficient to support crops.

COTTON

West Texas could use some more rain and heat, but overall, crop conditions are generally favorable. As of last week’s conditions report, 51% of the US crop was rated good/excellent, the same as a year ago and ahead of the 5-year average of 46% for that point in the season. The new report is due out this afternoon. World Weather Service said most of the tragic, flooding rain in Central Texas missed cotton areas. The NWS 6-10 and 8-14 days forecast call for near or above normal temps and near to above normal chances of rain across the state. The US Drought Monitor showed approximately 3% of US cotton production was within an area experiencing drought as of July 1, unchanged from the previous week and down from 16%-18% a year ago.

SUGAR

At last week’s low, October sugar had declined 22% from the March high and 30% from the contract high in 2023, which left it vulnerable short covering, and after weeks of reports of strong monsoons reaching India and southwest Asia, we had some reports of drier conditions in some areas. World Weather Service says that some of Thailand’s sugarcane areas are experiencing net drying and that rain is needed but not much is likely for a while. India’s monsoon arrived early, and the central, some northern and eastern parts of the nation saw the heaviest rains recently and have more expected. However, net drying occurred in parts of Maharashtra and Tamil Nadu, both major sugar producing areas. The European Union will cut imports of Ukrainian sugar to 100,000 tons versus 400,000 in 2022/23 and 500,000+ in 2023/24, due to complaints from EU farmers. Prior to the war the quota for Ukrainian was 20,000 tons. Brazil exported 3.36 million tons of sugar in June, up from 3.19 million a year ago, according to government data.

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