ADMIS News
SUGAR
With key outside markets relatively weak, sugar needs to find fresh bullish supply news to have any chance of sustaining an uptrend. Energy prices continued to slide with crude oil and RBOB gasoline both posting heavy losses, which pressured the sugar market as that should further weaken near-term ethanol demand. Energy prices remain under significant pressure which should weigh heavily on the sugar market. The major trade house Louis Dreyfus said that with very large soybean and corn crops, Brazil’s sugar exports may be restricted by loading delays.
COCOA
The cocoa market has not fully shaken off near-term demand concerns which were given a fresh boost by surprise upticks in Euro zone CPI readings earlier this week. With a “risk off” mood gaining strength late on Wednesday, cocoa could remain under pressure. July cocoa was unable to hold onto early support as it fell to a 3-week low before finishing yesterday’s trading session with a moderate loss. Global risk sentiment remained subdued in front of the FOMC meeting decision, which pressured cocoa prices as they may weaken near-term demand prospects.
COFFEE
With global risk sentiment turning more negative, coffee is vulnerable to further downside price action. A rebound in the Brazilian currency provided coffee with early carryover support as that should ease pressure on Brazil’s farmers to market their remaining coffee supply. Global risk sentiment remained subdued in front of the FOMC meeting results, and then deteriorated further late on Wednesday. This should put additional pressure on coffee prices during today’s action as a “risk off” mood may weaken out of home consumption prospects.
COTTON
July cotton sold off sharply yesterday, for the second day in a row, giving up last week’s gains in the process. Crude oil was down sharply for the second day in a row, to its lowest level since March 27. Weaker crude oil prices mean cheaper polyester. Export sales improved last week, and traders will be anxious to see if the trend will continue this week. The weather pattern in west Texas is getting wetter, which will be welcome to cotton growers in the region but could be bearish for new crop.
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