ADMIS News
COCOA
Cocoa’s pullback on Wednesday resulted in the first negative daily result since April 25th, but the market will start today’s action with a gain for the week and month. Ongoing concern with near-term demand continues to pressure the market after 2 of the 3 major grindings regions had negative year-over-year results for the first quarter.
COFFEE
Coffee prices continue to hold their ground above the March and April lows and are starting to see signs of improving global demand. With a positive shift in risk appetites after Wednesday’s close, coffee may be able to extend a recovery move. Reports that upcoming Vietnamese production will be negatively impacted by a lack of fertilizers have provided underlying support. Although Vietnam’s output is primarily Robusta coffee, they are the second largest coffee-producing nation and have seen few supply issues over the past few seasons. Brazil and Colombia are expected to have issues with their upcoming production, and that has strengthened coffee prices this week.
COTTON
After a one-day setback, July cotton is back into new contract and multi-year highs. The market has posted contract highs for the fifth straight session. It has also closed higher for six of the past eight sessions. Nearby futures are at their highest level since July 2011. The dollar was down sharply, which lent support to cotton and other commodities. Crude oil was higher, which is supportive to cotton because higher priced oil raises the cost of man-made fibers.
SUGAR
While it continues to find support from key outside markets, sugar has been unable to regain upside momentum as a long liquidation trend continues. The sharp drop in open interest from the April 13th key reversal suggests a long liquidation trend and managed money traders were still net long 205,047 contracts in the last COT update. As a result, the sugar market could remain on the defensive.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
