ADMIS News
COTTON
July cotton closed around unchanged on Friday after spending the session in the bottom portion of Thursday’s big range-down move. The dollar was lower, crude oil was higher, and the stock market was higher, all of which should be supportive to cotton. The market saw pressure late last week on increased chances of rain in West Texas, an area that suffered debilitating drought last year and has only seen moderate improvement this year. The trend appears to be turning wetter, which could put additional pressure on cotton this week.
COCOA
While two of the 3 major regions saw year-over-year grinding increases, a disappointing result from North America showed that near-term demand concerns have not been fully resolved. While the market continues to have a bullish longer-term supply/demand outlook, cocoa remains vulnerable to a near-term pullback. For the week, July cocoa finished with a gain of 86 points (up 3.0%) and a fifth positive weekly result over the past 6 weeks. A rebound in European and US equity markets provided cocoa with carryover support as that may help to improve the second quarter demand outlook. West African near-term supplies remain tight, with this season’s Ivory Coast port arrivals running behind last season’s pace, and that continued to underpin cocoa prices.
COFFEE
Coffee’s April rally appears to have run out of steam as focus is shifting back to the supply side of the market. Unless a “risk on” mood redevelops in global markets early this week, coffee prices are likely to remain under pressure. For the week, July coffee finished with a minimal loss of 0.05 cent, which broke a 2-week winning streak and was a negative weekly reversal. Global risk sentiment remains subdued, which weighed on coffee prices as that may weaken near-term demand prospects. In addition, the likelihood that Brazil’s upcoming Arabica crop will come above the previous season’s output total also weighed on coffee prices.
SUGAR
Last Friday’s pullback resulted in sugar posting a fourth negative daily key reversal so far this month. With the market still extremely overbought going into the early stages of Brazil’s Center-South cane harvest, there is an increased chance that sugar prices could see extended downside follow-through early this week. For the week, July sugar finished with a gain of 88 ticks (up 3.8%) and a fifth positive weekly result in a row. The USDA forecast China’s upcoming 2023/24 sugar production would see an 11% increase from this season’s output, which weighed on sugar prices as that may limit their imports during the second half of this year. Brazil’s 2023/24 Center-South cane harvest is underway which will bring fresh supply to the global export marketplace.
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