Softs this morning are higher with May sugar +0.26 (+2.03%), May coffee +0.05 (+0.04%), May cocoa +7 (+0.29%), May cotton +0.98 (+1.18%). Softs on Wednesday settled mixed: May sugar -0.66 (-4.91%), May coffee -0.50 (-0.41%), May cocoa +2 (+0.08%), May cotton +0.43 (+0.52%). May sugar on Wednesday closed lower on signs of bigger global supplies after India's SMA raised its 2017/18 India sugar production estimate to a record 29.5 MMT and said India may boost its sugar exports to a 4-year high of 2 MMT because of the record output. Also, researcher Green Pool Commodity Specialists raised their 2017/18 global sugar surplus estimate to 11.4 MMT from a prior estimate of 10.3 MMT and predicted the global sugar surplus will continue into 2018/19 with a surplus of 5.4 MMT. May sugar had posted a 3-week high Friday on speculation Brazil's sugar mills will divert more sugar supplies toward ethanol production after Brazil's ethanol prices rose to their highest since 2010. May sugar last Wednesday fell to a 2-1/2 year low and nearest-futures (H18) slumped to a 6-1/2 month low as signs of robust supplies sparked fund selling. Citigroup raised its global 2017/18 sugar surplus estimate to 10.8 MMT from a prior view of +6.4 MMT and data from Unica showed Brazil's Center-South 2017/18 sugar output in the crop year through mid-Feb up +1.62% y/y at 35.836 MMT. ISO projects a global 2017/18 sugar surplus of +5.03 MMT following the global 2016/17 deficit of -6.465 MMT. The USDA's Foreign Agricultural Service (FAS) on Nov 17 raised its 2017/18 global sugar surplus estimate to 10.73 MMT from a May forecast of 8.07 MMT and raised its global 2017/18 sugar production estimate to a record 184.95 MMT from a May view of 179.64 MMT. On the positive side, researcher Sucden predicts global 2018/19 sugar production may fall -3.3% to 141 MMT.

May coffee prices on Wednesday fell to a 1-1/2 week low on reduced Brazil coffee crop concerns after Somar Meteorolgia reported 108% of the historical average of rainfall over the past week in Brazil's Minas Gerais region, Brazil's largest arabica-bean producing area. May coffee last Friday had posted a 2-week high on coffee crop concerns in Minas Gerais due to a lack of rains. Another positive is signs of tighter supplies after ICE-monitored coffee inventories fell to 1.891 mln bags on Feb 23, a 4-1/4 month low. ICE-monitored coffee inventories in Jan had climbed to a 2-1/4 year high of 2.017 mln bags. May coffee on Feb 22 posted a contract low nearest-futures (H18) slumped to an 8-1/2 month low as signs of robust supplies encouraged fund selling. Cooxupe, Brazil's largest coffee cooperative, said it sees Brazil's 2018/19 arabica coffee crop rising +20% y/y to 42 mln bags. Also, researcher Terra Forte predicts Brazil 2018/19 coffee output may climb +23% y/y to 59.2 mln bags. In addition, Vietnam said it expects its 2018 coffee exports to rise +9% y/y to 1.55 MMT. Supplies remain ample as ICO data shows global 2016/17 arabica coffee exports rose by +5.4% y/y to 76.23 mln bags, and 2017/18 global coffee exports from Oct-Jan are up +3.1% y/y at 40.74 mln bags. The ICO projects global 2017/18 coffee production will climb +0.8% y/y to a record 158.93 mln bags. The ICO projects a global 2016/17 coffee ending stocks surplus of 2.38 mln bags, the first surplus in 3 years. On the positive side, Brazil reported its Jan coffee exports fell -4.9% y/y to 2.33 mln bags, the lowest level for a Jan in 5-years, and Columbia, the world's second-biggest arabica bean producer, said its Jan coffee output fell -11% y/y to 1.13 mln bags. The USDA on Dec 15 projected that global 2017/18 coffee ending stocks will fall -8.6% to a 5-year low of 29.3 mln bags.

May cocoa prices on Wednesday closed little changed as they consolidated recent gains. May cocoa on Tuesday posted a 1-1/4 year high as excessive dryness in the Ivory Coast has raised crop concerns and spurred fund buying of cocoa futures. A recent report from Speedwell Weather said that over the past month the Ivory Coast has received less than 75% of normal rainfall. Also, the ICCO projects 2017/18 global cocoa production will fall -2.3% y/y to 4.638 MMT with a global cocoa surplus falling to +105,000 MT from a 300,000 MT surplus in 2016/17, a 6-year high. Current supplies are tighter after data showed Ivory Coast farmers delivered 1.387 MMT of cocoa beans to Ivory Coast ports from Oct 1-Mar 4, down -1.4% y/y. Another supportive factor is signs of stronger global demand. Recent data from Barry Callebaut showed global chocolate sales rose +3.1% in the three months through Oct and the European Cocoa Association reported European Q4 cocoa processing rose +4.4% y/y to 353,286 MT, higher than expectations of +3.4% y/y and the most for a Q4 since the data began in 1999. However, Q4 Asia cocoa grindings rose +4.2% to 196,476 MT, below expectations of +8% y/y, and Q4 North American cocoa grindings unexpectedly fell -1.3% to 116,080 MT, weaker than expectations for a +2.5% increase. The Ivory Coast on Dec 21 boosted its 2017/18 main cocoa crop forecast to 1.40 MMT to 1.45 MMT from a prior forecast of 1.35 MMT. The ICCO projected 2016/17 global cocoa production at a record 4.748 MMT with a 6-year-high surplus of +300,000 MT. Ghana said its 2016/17 cocoa production rose +25% y/y to 969,438 MT, a 6-year high, although the ICCO projects Ghana's 2017/18 cocoa production will fall -7% y/y to 900,000 MT.

May cotton on Wednesday closed higher but remained below Tuesday's contract high. May cotton posted that contract high and nearest-futures (H18) posted a 3-3/4 year high after the NWS forecast warmer-than-normal temperatures with limited precipitation over the next month for the drought-stricken southern Plains. Also, expectations are for the USDA in Thursday's WASDE report to cut its estimates for U.S. and global cotton ending stocks. Cotlook projects a global 2018/19 cotton deficit of -583,000 MT from a 2017/18 surplus of +160,000 MT. Cotton prices posted a 9-1/4 month nearest-futures high Jan 12 on expectations of increased foreign demand for U.S. cotton. Chinese cotton demand has been robust as China's 2017 cotton imports rose +28.9% y/y to 1.15 MMT and China Jan cotton imports rose +15.9% y/y to 133.7 MT. The Pakistan Textile Mills Association on Dec 6 said Pakistan may need to import 2.5 mln bales of cotton in 2018. Recent foods in Pakistan, the world's fourth-largest cotton producer, may reduce its cotton crop and prompt it to import as much as 1 mln bales this year, according to researcher Rose Commodity Group. The USDA projects global 2017/18 cotton use will climb to 120.5 mln bales, a 10-year high. The Cotton Advisory Board recently predicted 2017/18 cotton production in India, the world's biggest cotton producer, will climb +9.3% y/y to a 3-year high of 37.7 mln bales.