Choppy Trade Continues For Coffee
While it has received bullish supply developments since the beginning of December, cocoa continues to be pressured by an uncertain demand outlook and negative key outside markets. While global risk sentiment is showing signs of improvement, cocoa may see more downside price action before finding a near-term floor.
Bullish supply news continues to provide the market with underlying support. With European demand about to see a positive shift, coffee may be heading for a retest of the late November highs. Near-term supply issues in Central America following 2 major storms last month continue to be a source of underlying support to coffee prices, which was underscored by reports that Guatemala’s October-November coffee exports were more than 16% below last year’s totals.
March cotton is consolidating ahead of a key USDA report. The dollar was higher Tuesday, but so was the stock market, so outside forces were mixed. There were reports of traders moving to the sidelines ahead of Thursday’s USDA supply/demand report.
Sugar prices have slowed their descent from their mid-November highs, but have now closed below their 50-day moving average for 3 sessions in a row. In spite of notable carryover support coming from its key outside markets, sugar may be on the verge of a sizable downside move.
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