ADMIS News
COCOA
Cocoa’s 3-day downdraft has taken the market down to its lowest price level since mid-December. For the week, July cocoa finished with a loss of 75 points (down 2.9%) which was a third negative weekly result over the past 4 weeks as well as an outside-week down. Global risk sentiment remains negative in the wake of last week’s FOMC and Bank of England policy meetings, which has pressured cocoa prices as that is likely to weaken near-term demand prospects. Europe also has to deal with Russia’s invasion of Ukraine which has dampened this year’s travel outlook (a key source of chocolate purchases), while Asia continues to deal with China’s series of COVID lockdown which are weighing on the region’s near-term demand outlook.
COFFEE
Coffee prices have been unable to sustain upside momentum in over a month and are on the verge of falling to their lowest levels since early November. While the supply side of the Arabica market remains generally bullish due to potential production issues in Brazil and Colombia, coffee needs to see clear improvement in near-term demand prospects. For the week, July coffee finished with a loss of 11.65 cents (down 5.2%) which was a third negative weekly result over the past 4 weeks.
COTTON
July cotton closed sharply lower for the second day in a row on Friday after trading to the lowest level since April 27. The market has gotten increasingly volatile as it has repeatedly made new contract highs. Another steep selloff in the equity market and a higher dollar raised concerns about demand. The 1-5-day forecast calls for rainfall of up to 1/4 inch in west Texas, which is an improvement from yesterday’s forecast. However, the 6-10 and 8-14-day forecasts call for below normal chances of rain and above normal temperatures, which could only make the drought situation worse.
SUGAR
The market may need to see bullish supply-side news in order to extend a recovery move. For the week, July sugar finished with a gain of just 1 tick. RBOB gasoline and crude oil extended last week’s rallies on Friday, which in turn provided sugar with carryover support as they can strengthen ethanol demand in both Brazil and India. There are already indications that Brazil’s Center-South mills have shifted part of their crushing over to ethanol production, which could be confirmed by the upcoming Unica supply report for the second half of April.
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