Softs this morning are mixed with Oct sugar +0.12 (+0.86%), Dec coffee +0.90 (+0.67%), Dec cocoa +17 (+0.87%), and Dec cotton -0.41 (-0.59%). Softs on Tuesday settled mixed: Oct sugar -0.27 (-1.89%), Dec coffee +3.20 (+2.43%), Dec cocoa +17 (+0.88%), Dec cotton -3.00 (-4.16%). Oct sugar on Tuesday closed lower on ample supplies after Unica reported that Brazil 2017/18 Center-South sugar production through Aug was 23.2605 MMT, up +3.37% y/y. Oct sugar had posted a 1-week high the Brazilian real rose to a 5-1/2 month high against the dollar, which reduces incentive for Brazil's sugar producers to boost exports. Oct sugar rose to a 5-week high Aug 31 after gasoline prices surged to a 2-year high, which benefits ethanol prices and gives incentive to Brazil sugar mills to boost ethanol production at the expense of sugar supplies. Oct sugar on Jun 28 fell to a 1-1/2 year nearest-futures low as signs of robust supplies have hammered sugar prices. India's Meteorological Department recently reported that monsoon rains were normal from Jun 1-Aug 2 in India, which should benefit India's sugar crop, the world's second-largest. 2017/18 India sugar output is expected to increase by +23% y/y to 25 MMT, the first gain in 3 years. Researcher F.O. Licht recently cut its global 2016/17 sugar deficit estimate to -4.2 MMT from a prior estimate of -5.5 MMT and raised its 2017/18 global sugar surplus estimate to 4.6 MT from a May forecast of 2.7 MMT, due to an unexpected surge in Pakistan sugar production. In addition, ISO projects a global 2017/18 sugar surplus of 3 MMT from a 2016/17 deficit of -6.465 MMT. Researcher Wilmar predicts Thailand 2017/18 sugar production may climb to a record 12 MMT.

Dec coffee prices on Tuesday rose to a 3-week high on Brazil crop concerns with no rain forecast for Brazil's Minas Gerais, Brazil's biggest arabica bean growing region, for the next 2-weeks. Another supportive factor was Monday's data from Cecafe that showed Brazil Aug arabica coffee exports fell -21.4% y/y to 2.09 million bags. Coffee prices had posted a 2-1/2 month low last Wednesday on signs of robust supplies as ICE-monitored coffee inventories have moved steadily higher this year and rose to a 1-1/2 year high Monday of 1.756 million bags. Also, recent data from the Green Coffee Association showed U.S. Jul coffee inventories rose +17.5% y/y to a 23-1/3 year high of 7.413 mln bags. Dec coffee on Aug 8 jumped to a 4-1/2 month high on Brazil coffee crop concerns after Somar Meteorolgia said rainfall had been well below normal in Brazil’s coffee-growing regions. The ICO recently hiked its global 2016/17 coffee production estimate to a record 153.9 mln bags from a prior estimate of 151.6 mln bags. Dec coffee on Jun 22 plunged to a contract low and nearest-futures (N17) sank to a 1-1/2 year low on signs of robust supplies. ICO data shows that global coffee exports from Oct-Jun are up +5.6% y/y to 92.29 mln bags. However, supplies may tighten up since Confab said it sees Brazil's 2017 coffee output falling as much as 15% to 43.7 mln bags from 51.4 mln bags in 2016 as crops are in their lower-yielding half of their 2-year cycle. Also, Carafe predicts that Brazil 2017 coffee exports will fall -5.9% y/y to 32 million bags due to a lower-yielding coffee crop.

Dec cocoa prices on Tuesday closed higher on signs of tighter supplies after ICE-monitored cocoa inventories fell to a 5-month low Monday. The upside in cocoa appears limited on signs of adequate current cocoa supplies as Ivory Coast farmers sent 1.97 MMT of cocoa beans to ports from Oct 1-Sep 10, up +25.9 y/y. Also, Ghana, the world's second-biggest cocoa producer, recently reported its 2016/17 cocoa crop had risen to 919,000 MT as of Aug 17, a 6-year high. Demand remains weak, too, as data from Barry Callebaut, the world's biggest cocoa processor, shows global chocolate sales down -0.6% y/y in the 9 months through April. Also, Q2 North American cocoa grindings unexpectedly fell -1.1% to 123,125 MT, weaker than expectations of a +2.2% increase to 127,170 MT. Q2 European cocoa processing rose +2.1% y/y to 331,850 MT, weaker than expectations of +3.0% y/y, and Q2 Asian cocoa processing rose +9.9% to 160,878 MT, weaker than expectations of +12% y/y. The ICCO on Friday raised its 2016/17 global cocoa production estimate to a record 4.7 MMT from 4.692 MMT in Jun, and lowered its global 2016/17 surplus estimate to +371,000 MT from a 382,000 MT estimate in Jun, still the biggest surplus in 6-years.

Dec cotton on Tuesday plunged to a 2-week low and settled limit-down on a bearish USDA WASDE report. The USDA unexpectedly raised its U.S. 2017/18 cotton production estimate to a 12-year high of 21.76 mln bales, higher than expectations of no change at 20.6 mln bales. The USDA also unexpectedly hiked its U.S. 2017/18 cotton ending stocks estimate to a 9-year high of 6.0 mln bales, higher than expectations of a cut to 5.7 mln bales. The USDA also raised its global 2017/18 cotton production estimate to a 5-year high of 120.75 mln bales, above expectations of 117.8 mln bales, and unexpectedly raised its global 2017/18 cotton ending stocks estimate to 92.54 mln bales, above expectations of a cut to 89.9 mln bales. Dec cotton had rallied to a contract high and nearest-futures (V17) cotton posted a 3-month high Friday on concerns that heavy rains from Hurricane Irma will damage U.S. cotton crops that had already seen huge rains from Tropical Storm Harvey. U.S. cotton supplies have tightened after ICE-monitored cotton inventories fell to a 2-1/3 year low of 8,402 bales on Monday. Strength in U.S. exports is drawing down cotton stockpiles, led by exceptional Chinese demand, as China Jan-Jul cotton imports are up +38% y/y to 728,000 MT. Foreign demand for U.S. cotton is on fire as USDA export data shows U.S. cumulative cotton exports this marketing year through Jul 27 up +64.6% y/y. Monday's USDA Crop Progress report showed 63% of the U.S. cotton crop in good-to-excellent condition as of Sep 10, down -2 points w/w, but up +16 points from the same time last year.