Super El Niño Threat Looms Over Cocoa and Soft Commodity Markets

A forthcoming Super El Niño weather event is casting a shadow over several soft commodity markets, according to a market commentary published on 2 October 2026 by ADM Investor Services (ADMIS) analyst Mark Bowman. The phenomenon is expected to peak in November and extend into February, with analysts warning it could reduce moisture availability at a critical time for West African cocoa crops.

Cocoa

December cocoa futures were higher early on Friday after bouncing off a spike low recorded the previous session, according to Bowman. He attributed recent downward pressure to demand concerns following a lower sales report from Swiss chocolate maker Lindt & Sprüngli, as well as expectations that global supplies remain adequate given what he described as a global surplus for the 2025/26 season. However, Bowman noted that the market can still draw support from less-than-ideal growing conditions in West Africa, where rainfall has been lighter than normal. He warned that the approaching Super El Niño "threatens to limit moisture this fall and winter as well, which can lower output as the season progresses."

Coffee

December coffee futures were higher early Friday and approaching the three-week high reached on Wednesday, according to the commentary. Bowman noted that prices had declined approximately 22% from an August 25 peak following reports of strong Brazilian export volumes, leaving the market technically oversold. He flagged quality concerns in parts of Brazil's crop due to heavy summer rains. On the supply side, the surge in Brazilian exports has eased a very tight supply situation, as evidenced by a rise in ICE-certified arabica stocks that had previously fallen to what Bowman described as "26-year lows."

Cotton

December cotton was testing a three-month low early Friday and trading around its 200-day moving average, Bowman wrote. US crop conditions improved slightly in the prior week, though he noted it is too late in the season for weather to materially alter the production outlook. Heavy rains in Texas and other key growing regions were said to threaten open bolls, adding concern over US export prospects. The US Dollar Index reaching its highest level since April 2025 was also cited as an additional headwind for US exports. A Thursday export sales report was described as decent but insufficient to support prices.

Sugar

March sugar futures were higher early Friday after Brazil's Agriculture Ministry released data late Thursday showing significantly lower centre-south sugar production for the first half of September. According to the ministry's figures cited by Bowman, production totalled 2.12 million metric tons, representing a 41.6% decline from the same period the prior year. The production figure was in line with an S&P Global poll of analysts that had an average estimate of 2.12 million tons. Cane crushing for the period totalled 30.16 million tons, down 34.2% from 2025, against an expected 29.8 million tons. Ethanol production reached 1.72 billion litres, down 27.2%, versus an expected 1.89 billion litres. Bowman indicated that further rain-related delays are expected in the coming weeks.

This report is a market commentary published by ADM Investor Services International Limited. It is provided for informational purposes and does not constitute investment advice.