ADMIS News
COFFEE
December Coffee rallied sharply overnight to its highest level since July 25. The 50% tariffs on Brazilian imports have arrived, and the trade may be willing to set that aside as a market driver for the moment. Perhaps they sense that US consumers may cause enough of a backlash against higher prices for the Trump administration to allow some sort of carve-out for coffee. Perhaps some support is coming from the sharp decline in ICE certified stocks, which have fallen to their lowest level since May 2024 this week, dropping another 7,804 bags yesterday to 743,240. The Brazilian President is apparently in no rush to try to appease Trump on the tariffs. The tariffs will raise prices in the US and encourage US importers to look to other suppliers. They will also send Brazilian exporters looking for buyers. Coffee trading in Vietnam has slowed to a standstill, as they are at the end of the their crop season and stockpiles are low. A rally in the Brazilian real this week lowers the urgency for Brazilian roasters to sell. Some colder weather was expected to move into Brazil overnight, but no widespread frost damage was expected.
COTTON
December Cotton was lower overnight and fell to its lowest level since April 7, which was the day after the market put in its low following the initial “liberation day” tariffs. The 50% tariffs on India do not help US cotton export prospects, as India was the seventh-largest buyer of US cotton in 2024/25. Any nation that faces a loss of textile sales to the US may not need as much cotton to produce said textiles. US growing conditions remain favorable to a strong crop. This week’s US Drought Monitor showed only 3% of US cotton production is in an area experiencing drought. This is back to where it had been since June 17 after briefly climbing to 5% last week. If anything, the crop could use a little more heat. Yesterday’s export sales report, as of July 31 and the final one of the 2024/25 marketing year, showed net cancellations of 17,172 bales for the 2024/25 marketing year and net sales of 109,300 for 2025/26 for a total of 92,128. This was down from 110,807 the previous week.
SUGAR
October Sugar is higher this morning, and it appears to have rejected the 16-cent level for the moment. The market his been in a steady downtrend since March, but it did find support in early July off concerns about lower Brazilian production. Brazilian government data this week showed the nation exported 3.59 million tons of sugar in July, down 5% from the same month last year. However, we already knew Brazilian production was down sharply in June due to heavy rains that interrupted harvest. As of June 30, Brazilian Center-South production for 2025/26 was down 14% from a year ago. The pace improved to 10% lower in most recent UNICA report covering the first half of July. During that period production was 15% higher than last year as conditions turned dry and more conducive to harvest and crush. The dry trend has continued into this month, so we expect production to have remained strong. The report for the second half of July will be released around the 15th of the month. Production typically peaks during the second half of July, but the strong pace may extend into August owing to the delay in June. The question is the extent to which last year’s drought hurt this year’s production.
COCOA
December Cocoa extended this week’s gains overnight and traded to its highest level since July 1. The market is recovering from a selloff that culminated in low 2nd quarter grinding stats. Cocoa stocks in US warehouses reported by ICE fell 14,661 bags yesterday to 2.284 million, their lowest since July 3. World Weather Service said a mix of rain and sunshine will occur through the next week from Ivory Coast through southern Benin and that all areas will receive multiple rounds of rain during the period, with the periods of dry weather long enough to allow some areas to dry down while the greater rain falls to the north of most cocoa areas. This may counter some of the concerns over cool and dry conditions that emerged last week. Cameroon’s trade minister is optimistic about than nation’s cocoa prospect. Speaking at the launch of the 2025/2026 cocoa season, he said domestic traded volume for the season from August 1, 2024 to July 15, 2025 rose 16% to 309,518 tons metric tons, up from 266,710 tons the previous season. Data from their National Cocoa and Coffee Board (NCCB) showed that before the last season, the country has consistently exported between 200,000 tons and 295,000 tons annually, with a peak of 295,163 tons in 2021/22. The trade minister also expressed optimism that the country’s output could may increase to 600,000 metric tons in 2026/27, up from 309,518 tons in 2024/25 provided there is a timely supply of inputs to farmers, such as high yielding seedlings.
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