ADMIS News
COTTON FUTURES
July cotton closed lower on Friday but spent the week inside a relatively narrow 1.61-cent range. The recent US drought monitor showed some improvement in west Texas last week. Much of the region remains under moderate to severe drought, but conditions are much improved over a year ago. The 6-10 and 8-14-day forecasts call for mostly normal to some below normal chances of rainfall over west Texas.
COCOA FUTURESWith the market already overbought and having a significant spec long position, the cocoa market is vulnerable to a corrective break. July cocoa experienced a new 28-month high Friday before a negative daily key reversal. For the week, July cocoa finished with a gain of 27 points which was a fourth positive weekly result over the past 5 weeks. A negative shift in global risk sentiment going into the weekend was a source of early pressure on cocoa prices. When the euro, British pound, European and US equity markets all turned lower, the cocoa market saw a wave of profit taking and addition long liquidation.
COFFEE FUTURES
The market will start this week with prices more than 15% above the late March low. If global risk sentiment can regain a positive tone, coffee should extend its upside breakout. For the week, July coffee finished with a gain of 9.80 cents which was a second sizable weekly gain in a row. A negative shift in global risk sentiment weighed on coffee prices as that may weaken out-of-home consumption demand. Expectations that Brazil’s upcoming 2023/24 Arabica crop will come in higher than last season also weighed on coffee prices. With the La Nina event ending, Brazil’s growing areas should see normal weather in the second quarter than will benefit Arabica trees.
SUGAR FUTURES
While sugar prices were able to extend their rally last week, they went into the weekend well below last Wednesday’s 11-year high. With Brazil’s Center-South harvesting and crushing underway, sugar may need more carryover support from key outside markets to avoid a correction. For the week, July sugar finished with a gain of 28 ticks and a fourth positive weekly result in a row. India’s production is widely expected to come in below last season’s output with their top producing state of Maharashtra only having 6 mills in operation early in April. This has underpinned sugar prices as their government is more likely to prevent any further sugar export tranches during the rest of this season.
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