Key Takeaways
- • Cotton futures declined amid geopolitical uncertainty and favorable growing conditions: Prices fell on news of a potential Iran MOU awaiting Trump approval, compounded by improved U.S. weather and accelerated planting progress in the Delta and Southeast regions. July support levels established at 74.80, 74.00, and 73.40, with resistance at 80.00, 81.70, and 83.90.
- • Non-commercial traders maintain significant long positions across softs complex: Cotton shows non-commercial long positions of 103,018 contracts (20.5% of open interest) against short positions of 34,847 as of May 26, 2026, reflecting cautious positioning despite mixed chart trends.
- • Coffee and cocoa markets show resilience despite broad commodity weakness: Coffee ICO average price at 245.29 ct/lb with mixed-to-down trends in New York; cocoa posted slight gains despite geopolitical headwinds, buoyed by expectations of reduced demand from last year's elevated prices.
- • Sugar open interest declined 5,149 contracts week-over-week; Iran situation and petroleum prices create ethanol diversion risk: Non-commercial traders hold net long positions, but reduced open interest signals positioning adjustment. Drier weather in Brazil and India supporting harvest conditions.
- • Frozen concentrated orange juice shows significant producer/merchant short positioning: Producers/merchants hold 3,767 short contracts versus 1,873 long positions (43.4% of open interest short), reflecting typical hedging behavior amid dry Florida conditions and dry outlook for next crop.
Summary
The softs complex weakened considerably during the week of May 26–June 1, 2026, as geopolitical uncertainty surrounding a potential U.S.-Iran memorandum of understanding awaiting presidential approval overshadowed fundamental support across agricultural commodities. The pending Iran deal announcement created risk-off sentiment across most commodity markets, though individual softs displayed varied responses based on weather patterns and regional supply dynamics.
Cotton futures retreated on the combination of diplomatic uncertainty and improving U.S. growing conditions. USDA data showed planting progress and crop emergence running ahead of historical norms, with increased precipitation benefiting the Delta and Southeast regions. Texas cotton areas continued to receive scattered showers, though temperature volatility persisted. Committed open interest declined 1,277 contracts to 501,880, with non-commercial traders holding substantial long exposure of 103,018 contracts against short positions of 34,847, representing 20.5% and 6.9% of total open interest respectively. Index traders maintained large spreading positions of 168,926 contracts long and 126,129 short. Technical support formed at 74.80, 74.00, and 73.40 July, with resistance overhead at 80.00, 81.70, and 83.90 July.
Coffee and cocoa demonstrated relative resilience despite broad-based weakness. Coffee's ICO average price settled at 245.29 ct/lb with mixed-to-down trends in New York and mixed trends in London. South American and Asian crop development proceeded favorably, with mostly dry conditions now reported in Brazil—conditions favoring harvest quality. Non-commercial traders held 37,241 long contracts against 28,825 short positions in Coffee C futures (235,416 open interest), while open interest expanded 582 contracts week-over-week. Cocoa actually advanced marginally despite geopolitical headwinds, supported by anticipation that historically elevated price levels will suppress physical demand. West African harvests proceeded robustly with positive rainfall for next-crop development, while production potential increased in Asia and Central America. Cocoa open interest expanded 11,365 contracts to 258,176, with non-commercial traders holding 24,852 long and 51,391 short positions.
Sugar futures declined alongside most softs on Iran MOU news and broader commodity weakness. The ongoing Iran conflict and closed Strait of Hormuz have elevated global petroleum prices, creating competitive demand pressure as biofuel producers may redirect feedstock allocation toward ethanol production rather than sugar-derivative compounds. Open interest contracted 5,149 contracts to 1,182,651, reflecting positioning adjustments. Non-commercial traders hold net long positions of 136,822 contracts long versus 253,966 short, while commercial hedgers maintain substantial short protection with 340,147 short contracts against 483,181 long. Global supply conditions remain adequate, supported by drier weather in Brazil and India facilitating improved harvest operations.
Frozen concentrated orange juice reflected persistent dry conditions in Florida with a dry outlook for the next crop cycle. Producer/merchant positioning reveals typical hedging behavior, with 3,767 short contracts dominating the 1,873 long positions held by this category, representing 43.4% of the contract's 8,680 open interest in short form. Swap dealers and managed money participants show more balanced exposure, though total trader count remains limited at 47 participants across all categories.
Cotton futures retreated on the combination of diplomatic uncertainty and improving U.S. growing conditions. USDA data showed planting progress and crop emergence running ahead of historical norms, with increased precipitation benefiting the Delta and Southeast regions. Texas cotton areas continued to receive scattered showers, though temperature volatility persisted. Committed open interest declined 1,277 contracts to 501,880, with non-commercial traders holding substantial long exposure of 103,018 contracts against short positions of 34,847, representing 20.5% and 6.9% of total open interest respectively. Index traders maintained large spreading positions of 168,926 contracts long and 126,129 short. Technical support formed at 74.80, 74.00, and 73.40 July, with resistance overhead at 80.00, 81.70, and 83.90 July.
Coffee and cocoa demonstrated relative resilience despite broad-based weakness. Coffee's ICO average price settled at 245.29 ct/lb with mixed-to-down trends in New York and mixed trends in London. South American and Asian crop development proceeded favorably, with mostly dry conditions now reported in Brazil—conditions favoring harvest quality. Non-commercial traders held 37,241 long contracts against 28,825 short positions in Coffee C futures (235,416 open interest), while open interest expanded 582 contracts week-over-week. Cocoa actually advanced marginally despite geopolitical headwinds, supported by anticipation that historically elevated price levels will suppress physical demand. West African harvests proceeded robustly with positive rainfall for next-crop development, while production potential increased in Asia and Central America. Cocoa open interest expanded 11,365 contracts to 258,176, with non-commercial traders holding 24,852 long and 51,391 short positions.
Sugar futures declined alongside most softs on Iran MOU news and broader commodity weakness. The ongoing Iran conflict and closed Strait of Hormuz have elevated global petroleum prices, creating competitive demand pressure as biofuel producers may redirect feedstock allocation toward ethanol production rather than sugar-derivative compounds. Open interest contracted 5,149 contracts to 1,182,651, reflecting positioning adjustments. Non-commercial traders hold net long positions of 136,822 contracts long versus 253,966 short, while commercial hedgers maintain substantial short protection with 340,147 short contracts against 483,181 long. Global supply conditions remain adequate, supported by drier weather in Brazil and India facilitating improved harvest operations.
Frozen concentrated orange juice reflected persistent dry conditions in Florida with a dry outlook for the next crop cycle. Producer/merchant positioning reveals typical hedging behavior, with 3,767 short contracts dominating the 1,873 long positions held by this category, representing 43.4% of the contract's 8,680 open interest in short form. Swap dealers and managed money participants show more balanced exposure, though total trader count remains limited at 47 participants across all categories.
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