Softs Report 08/07/2026

World faces fresh food price surge, FAO warns – Reuters News
By Balazs Koranyi
05 Aug 2026 05:08:57 AM
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• Food inflation likely to accelerate towards the end of the year
• Farm margins falling on surging costs
• El Nino may exacerbate inflation
FRANKFURT, Aug 5 (Reuters) – The world is on the verge of another bout of food inflation as wars in Iran and Ukraine along with El Nino create a perfect storm of higher costs and lower crop yields, the chief economist of the United Nations Food and Agriculture Organization said.
Food prices were a key driver of the 2022 global inflation surge but have been relatively benign so far this year, even tempering in some places the surge caused by high energy costs.
This calm is likely to be temporary, however, as higher crude oil prices, the loss of fertiliser from the Gulf region, the shortage of diesel in some parts of the world and extreme weather are feeding through to costs and will show up in consumer prices, even if with a delay.
COSTS SEEN ACCELERATING BY YEAR-END, NEXT YEAR
“I expect that commodity prices will start to increase more now … and food prices will start increasing by the end of the year, and next year for sure they will increase more,” Maximo Torero told Reuters in an interview.
“The transmission from the commodity to the final food price is around three to six months,” he said.
Although some commodity prices, such as wheat Wc1, maize EMAc1 and rice RI-INBKN5-P1 have increased in recent months, most still reflect relatively good harvests, rather than likely difficulties in the coming year.
“The Strait of Hormuz is a problem that affects all the inputs of agricultural commodities, agricultural systems,” Torero said. “Brent oil, because it’s used for pumping, packaging, processing, and transportation. And natural gas because it’s used for fertilisers.”
Meanwhile the damage inflicted by Ukraine on Russia’s oil and gas infrastructure curtails the export market for diesel and natural gas, both of them key inputs in food production.
Since commodity prices are global, this inflicts pain across the world, even if richer countries have more cash to buffer producers.
“You’re hearing this in Europe, in the U.S., Brazil and in Asia,” Torero said. “Tight margins are putting stress in planting decisions.”
Indeed, even in the U.S., which is self-sufficient for most key inputs, without federal assistance farmers growing nine principal crops may lose $32 billion in 2027, the American Farm Bureau Federation, an industry lobby group, said.
On a per-acre basis, every crop analysed is projected to remain below breakeven in 2027, it said.
Global wheat and corn planting was already cut in the first three months of the Iran war and some U.S. producers have shifted to soybeans, because they require lower fertilizer inputs.
Australia, one of the world’s top crop exporters, recently said that winter crop production is seen down by 21% in part because of a significant increase in both fuel and fertiliser prices and uncertainty over the availability of key inputs.
Meanwhile this year’s El Nino weather phenomenon is likely to be especially strong, significantly shifting rainfall patterns, likely impacting commodity prices and potentially pushing tens of millions into acute food insecurity.
The monsoon in India is already delayed and below-average rainfall is seen this month, a potential hit for rice production that could impact global commodity costs.
(Editing by Mark John and Tomasz Janowski)
(( Balazs.Koranyi@thomsonreuters.com ; +49 30 220 133 623; Reuters Messaging: balazs.koranyi.thomsonreuters.com@reuters.net ))

COTTON
General Comments: Cotton was little changed yesterday as ideas of lower yields and weather stress continue and as demand was solid in the USDA reports. USDA showed that conditions are still well behind year ago levels and showed deterioration last week with the crop in the squaring and setting bolls phase. Progress is about average, with bolls being set and squaring proceeding at a normal pace. Forecasts and reports of scattered to isolated showers in Cotton areas continue for the Delts, and the Southeast. Temperatures will be warm to hot. Trends are mixed on the daily and are up the weekly charts.
Overnight News:
Chart Trends: Trends in Cotton are mixed. Support is at 77.10, 75.50, and 74.50 December, with resistance of 84.30, 86.20 and 88.10 December.

FCOJ
General Comments: Futures were lower yesterday and trends are turning down on the daily charts but could be topping out for the short term. It is still dry in Florida. The weather for the next crop is dry but seasonal and some rains are now being reported. The weather is considered good for production in Mexico but it is dry in Brazil. Scattered showers are still reported in eastern Brazil but many areas are drying out seasonally.
Overnight News:
Chart Trends: Trends in FCOJ are mixed to down. Support is at 144.00, 140.00, and 135.00 September, with resistance at 167,00 174.00, and 176.00 September.

COFFEE
General Comments: New York and London were lower and trends are mixed on the daily charts. The harvest delays in Brazil continue but coffee is more and more available and the increased offer was responsible for the selling. The next crop is developing well in South America amid scattered to isolated showers. Brazil has been hot and dry Indonesia is now about 80% harvested. Asian conditions are called good. Other world production conditions are generally good. Mexico is in good condition, but Central America is dry. Deliverable stocks are below 300,000 bags and are well below last year.
Overnight News: The ICO average price is 280.22 ct/lb.
Chart Trends: Trends in New York are mixed. Support is at 307.00, 300.00, and 296.00 September, and resistance is at 346.00, 352.00 and 357.00 September. Trends in London are mixed. Support is at 3740, 3690, and 3620 September, with resistance at 3930, 4130, and 4180 September.
SUGAR
General Comments: New York and London were higher again yesterday. The Iran war made bio fuels less valuable again, and Sugar has been slow to respond to rallies in petroleum products anyway. Drought in Europe and Brail are a major concern. The hot and dry weather is causing losses Sugarbeets production. There have been some rains in center-south Brazil causing some harvest delas, but generally dry weather is now forecast. The Iran war has been paused as both sides signing a memorandum of understanding and continuing negotiations in Geneva. Trends are mixed on the daily charts in both markets. There are good supplies for the market from good growing conditions for cane and beets around the world. Drier weather in parts of Brazil and India has been good for the harvest.
Overnight News: 2
Chart Trends: Trends in New York are mixed. Support is at 1500, 1480, and 1440 October and resistance is 1590, 1620, and 1650 October. Trends in London are mixed. Support is at 480.00, 471.00, and 460.00 October, with resistance at 490.00, 496.00, and 502.00 October.

COCOA
General Comments: New York and London were lower again yesterday. Daily chart trends are turning fown again and weekly trends are mixed. A big main crop harvest has arrived in West Africa and rains have been positive for the next crop. There are still reports of increased production potential in other countries outside of West Africa, including Asia and Central America. The market feels that there is less demand due to the high prices seen last year but demand has started to increase. Ghana’s cocoa production is expected to fall by at Ghana’s cocoa production is expected to fall by at least 16% in the 2026 to 2027 season, market regulator COCOBOD said, citing weather effects, the crop’s natural fruit-bearing cycle and disease, The weather is also hurting crops in Ivory Coast.
Overnight News:
Chart Trends: Trends in New York are mixed to down. Support is at 5360, 3760, and 3660 September, with resistance at 6220, 6480, and 6600 September. Trends in London are mixed. Support is at 4020, 3660, and 3540 September, with resistance at 4570, 4820, and 4940 September.

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