The soft commodities sector includes futures on world sugar, Arabica coffee, cocoa, cotton, and frozen concentrated orange juice traded on the Intercontinental Exchange. The price of all five soft commodities declined in Q4. In my Q3 Barchart report on the soft sector, I concluded with the following:
I remain bullish on sugar and cotton prices at the current price levels, but will leave plenty of room to add on further declines, as picking bottoms can be dangerous. Meanwhile, expect volatility in the soft commodities sector, which has gone from the leader of the asset class in 2024 to the laggard in 2025. The weather in critical growing areas, crop diseases, trade issues, and geopolitics can cause significant price variance in the tropical commodities. Meanwhile, cotton tends to move to annual highs during Q1 and Q2 as the uncertainty of the annual crop peaks. Given the price level below 66 cents per pound, cotton could be the best candidate for a price recovery from its current level.
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