Dollar Strength, El Niño, and Supply Shifts Weigh on Soft Commodity Markets

Soft commodity futures came under broad pressure on 23 September 2026 as a firmer US dollar weighed on export competitiveness and weather forecasters flagged evolving crop conditions across South America, West Africa, and South and Southeast Asia, according to a market commentary published by ADM Investor Services (ADMIS) analyst Mark Bowman.

Cotton

December Cotton futures fell in early Wednesday trading, surrendering a two-session recovery that had been supported by hopes of a US–China trade agreement and a reported decline in US crop conditions. ADMIS noted that the US export pace remains slow and that a sizeable speculative long position increases the market's vulnerability. According to Bowman, "The US dollar reaching its highest level since late July does not help the export outlook."

Coffee

December Coffee extended Tuesday's losses, touching its lowest level since 30 June. ADMIS cited increasing exchange stocks and an encouraging start to Brazil's 2027 crop as the primary bearish drivers. World Weather Inc., as quoted by ADMIS, reported that Brazil's main growing areas were receiving beneficial rainfall this week following recent rains that induced flowering. Growers for Cooxupé, described by ADMIS as Brazil's largest cooperative, were "98.6% harvested as of September 1." In Colombia, rainfall was described as "below normal in much of southwestern Colombia and in a part of the far north Colombia and western Venezuela over the past 10 days," though ADMIS characterised the situation as not critical given recent timely rainfall in those regions.

Cocoa

July Cocoa was lower early Wednesday but remained within Tuesday's trading range. ADMIS reported that recent rainfall along the West Africa Coast had eased concerns about El Niño disrupting the current season's production. World Weather Inc. forecast "a routine occurrence of showers and thunderstorms from Ivory Coast to Cameroon and Nigeria during the next ten days," with ADMIS noting that "a close watch on southern Ivory Coast and southwestern Ghana is warranted since recent rain in those areas was erratic and light." Separately, ADMIS reported that Ghana Cocoa Board (Cocobod) "has returned to positive equity after a government-backed debt restructuring and cost-cutting measures eased years of pressure on the regulator's balance sheet."

Sugar

March Sugar futures were higher on Wednesday after rejecting a move to a four-week low the previous session. ADMIS described a broadly bullish supply backdrop, noting lower expected output from multiple key producers. European beet production is down due to drought, Indian output is expected to be lower owing to an uneven monsoon, and Brazil's sugar production is reduced as "crushers focus more of their efforts on ethanol output." Thailand's output is also expected to fall, with ADMIS noting that "growers favoring cassava" has contributed to the decline. El Niño was cited as an additional threat, though rainfall patterns in Thailand had so far remained adequate. ADMIS noted that El Niño "is expected to peak in November and linger into February, which has implications for global output."

The ADMIS commentary carries a standard risk disclaimer and notes that the views expressed are those of the author and should not be construed as advice from Archer Daniels Midland Company.