Although the market has yet to close above its 50-day moving average, a rebound in global risk sentiment can help cocoa prices extend this recovery move. A rebound in the Eurocurrency provided cocoa with carryover support.
The coffee market continues to receive dire supply news from Brazil, with the prospect of more bad news by this weekend. Even though prices are likely to climb well above current levels later this year, the coffee market may have gotten ahead of itself and remains vulnerable to a near-term pullback.
The cotton market remains in a solid uptrend and experienced a new contract high close yesterday and pushed to new contract highs this morning. Demand factors continue to come in with a bullish tilt and a drop in the US dollar and strength in grain markets helped support. Cotton rated good/excellent as of July 25 was up 1% at 61% and now up 12% versus the 10 year average.
October sugar reached a new multi-year high but closed lower with a negative daily key reversal. While this year’s frost damage has not been as significant as that done to their nation’s coffee trees, Brazil’s Center-South 2021/22 cane crop has already been negative impacted by very dry conditions since last year.
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