Explore Special Offers & White Papers from ADMIS

Big Cocoa Supply Short-Term


While cocoa is dealing with lukewarm near-term demand, the market continues to have a bearish near-term supply outlook. With fresh evidence of record high global production, cocoa is likely to remain on the defensive. The turning point yesterday came when the International Cocoa Organization (ICCO) released their quarterly supply update, which featured an increase in their 2020/21 global production forecast by 117,000 tonnes to a record high 5.141 million.


Since the start of the third quarter, coffee prices have twice climbed above the 200.00 level, an area the market had not reached since late in 2014. Given these comparable lofty price levels, it has not taken much in the way of bearish supply news to put some brakes on coffee’s upside momentum.


December cotton broke out below a week-long consolidation yesterday, and also penetrated a steep uptrend channel support to turn the chart pattern more bearish. The selling pushed the market down to the lowest level since August 24. It appears that Hurricane Ida had little effect on cotton growing regions in Texas, and this realization may have been disappointing to the bulls.


Sugar prices came within 2 ticks of a new multi-year high yesterday before a lower close. A bullish supply outlook remains intact, however, so sugar prices should remain well supported on a near-term pullback. A rally in the Brazilian currency to a new 3 1/2 week high provided sugar with carryover support as that eases pressure on Center-South mills to produce sugar for export.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started