Softs this morning are higher: Mar sugar +0.14 (+1.08%), Dec coffee +0.45 (+0.40%), Dec cocoa +16 (+0.76%), and Dec cotton +0.67 (+0.87%). Softs on Thursday closed higher: Mar sugar +0.07 (+0.54%), Dec coffee +1.00 (+0.89%), Dec cocoa +9 (+0.43%), Dec cotton +0.01 (+0.01%). Mar sugar on Thursday closed higher but remained below Wednesday's 7-month nearest-futures high. Sugar rallied to that 7-month high on smaller Brazilian sugar output after Unica reported Brazil's Center-South 2018/19 sugar output through Sep was down -24.8% y/y at 22.273 MMT, with the amount of sugar converted to ethanol at 24.386 mln liters, up +25.1% y/y. Also, recent strength in the Brazilian real spurred fund short-covering after the real rallied to a 2-month high against the dollar on Tuesday. Mar sugar on Sep 27 fell to a contract low and nearest-futures (V18) sank to a 10-year low on concern about bigger global supplies after India's government approved 55.38 billion rupees ($762 million) in subsidies to its sugar farmers, which may boost India's sugar exports by 5 MMT in the year starting Oct 1. Sugar prices have been hammered into late-Sep on signs of abundant global sugar supplies. ISO forecasts global 2018/19 sugar production will rise +0.6% y/y to a record 185.2 MMT and projects a global 2018/19 sugar surplus of 6.75 MMT, down from surplus of +8.6 MMT in 2017/18. The USDA's Foreign Agricultural Service (FAS) projects a record 2017/18 global sugar surplus of 10.73 MMT and record global 2017/18 sugar production of 184.95 MMT. The Indian Sugar Mills Association (SMA) projects 2018/19 sugar production in India, the world's second-largest sugar producer, will climb 10% to a record 35.5 MMT. The Thailand Office of Cane and Sugar Board reported Thailand 2017/18 sugar production rose to a record 14.47 MMT. Conab forecasts Brazil 2018/19 sugar production will fall -9.6% y/y to 34.25 MMT, a 3-year low. Brazil Aug raw-sugar exports dropped -33% y/y to 1.44 MMT, the lowest for an Aug in 10-years.

Dec coffee on Thursday closed higher but stayed below Wednesday's 3-1/4 month nearest-futures high. Coffee prices rallied to that 3-1/4 month high on fund short covering after the Brazilian real climbed to a 2-month high against the dollar, which reduces incentive for Brazil's coffee producers to boost exports. Coffee prices have been hammered over the past four months as Dec coffee fell to a contract low Sep 18 and nearest-futures (U18) sold-off to a 12-3/4 year low on signs of robust supplies. ICE-monitored coffee inventories rose to a 4-year high of 2.414 mln bags on Wednesday. The ICO reported global coffee exports from Oct-Aug were 112.5 mln bags, up +1.6% y/y. Conab raised its Brazil 2018 coffee production estimate to a record 59.9 mln bags from a prior estimate of 58 mln bags, up +33% y/y, as crops are in the higher-yielding half of their biennial cycle. The USDA on Jun 15 projected global 2018/19 coffee production will climb +7.1% y/y to a record 171.166 mln bags and global 2018/19 coffee ending stocks will increase by +11.6% to a 3-year high of 32.812 mln bags. Also, Vietnam coffee exports this year from Jan-Sep are up +19.6% y/y at 1.456 MMT. On the positive side, the USDA projects that global 2018/19 coffee consumption will climb +2.9% to a record 163.219 mln bags. Also, U.S. Aug green coffee inventories fell -8.3% y/y to 6.663 mln bags. In addition, ICO recently raised its global 2017/18 coffee deficit estimate to -3.5 mln bags from a previous estimate of -2.7 mln bags.

Dec cocoa prices on Thursday closed higher but remained below Wednesday's 1-week high. Signs of tighter supplies had boosted cocoa prices to that 1-week high after the Ghana Cocoa Board said the 2017/18 cocoa crop in Ghana, the world's second largest, was 899,209 MT, down -7.2% y/y. Dec cocoa last Monday sank to a 7-3/4 month nearest-futures low on harvest pressures from the Ivory Coast and Ghana main crops. Demand concerns remain after Barry Callebaut, the world’s biggest cocoa processor, warned that high cocoa prices will curb global cocoa demand in Q3. Q2 North American cocoa processing data released Jul 20 showed an unexpected decline of -3.1% y/y to 119,301 MT, weaker than expectations for a +0.3% y/y gain. Q2 Asia cocoa grindings rose +15.2% y/y to 185,394 MT, and European Q2 cocoa processing rose +7.3% to 356,109 MT, a Q2 record high in data going back to 2001. Nearest-futures (U18) cocoa prices rallied to a 2-year high in May on signs of stronger global demand along with concern excessive dry conditions in West Africa would reduce Ivory Coast and Ghana cocoa yields. ICCO projects that 2017/18 global cocoa production will fall -2.0% y/y to 4.645 MMT and that the global cocoa surplus will fall to +31,000 MT from 2016/17's 6-year high surplus of 296,000 MT.

Dec cotton on Thursday closed higher on tighter global supplies after the USDA in Thursday's WASDE report unexpectedly cut its global 2018/19 cotton ending stocks estimate to a 7-year low of 74.45 mln bales, less than expectations of an increase to 77.58 bln bales. Gains were limited after the USDA also unexpectedly raised its U.S. 2018/19 cotton ending stocks estimate to an 11-year high of 5 mln bales, more than expectations of a cut to 4.65 mln bales. Dec cotton on Tuesday posted a 1-week high on concern Hurricane Michael may damage cotton crops in the U.S. Southeast. Another positive factor is concern about lower cotton production in India, the world's biggest cotton producer, after researcher Kotak Commodity Services said 2018/19 cotton production in India, may fall 4% y/y to 35 mln bales after India' monsoon rains were 9% below normal this year. India's 2017/18 cotton production rose to a 3-year high of 36.5 mln bales, according to data from the Cotton Association of India. Cotton prices fell to a 7-1/2 month low last Monday on bearish factors that included (1) the action by Cotlook to cut its global 2018/19 cotton deficit estimate to -739,000 MT form a prior estimate of -1.14 MMT, and (2) ongoing China/U.S. trade tensions after China canceled a purchase of 90,200 bales of U.S. cotton. There is also concern about the Turkish financial crisis, which has dampened expectations for cotton demand from the third biggest buyer of U.S. cotton supplies. China Jan-Aug cotton imports were up +20.6% y/y at 980,000 MT, although trade tensions between U.S. and China may limit China's demand for U.S. cotton going forward. The USDA projects that global 2018/19 cotton use will climb to a record high of 127.76 mln bales. Tuesday’s USDA Crop Progress report showed that 25% of the U.S. cotton crop was harvested as of Oct 7, +7 points ahead of the 5-year average.