ADMIS News
COFFEE
Coffee prices continue to see coiling action that has kept the market from breaking out of its recent consolidation zone. Recent supply/demand news has been supportive, however, and that should help the coffee market hold its ground above the 50-day and 200-day moving averages. Tight near-term Robusta supplies continue to provide carryover support to the New York coffee market, as Vietnamese near-term stocks have been nearly depleted, while Brazil’s newly harvested Robusta crop will not see sizable exports until the third quarter.
COCOA
Cocoa saw little upside follow-through from last Friday’s outside-day higher close as near-term demand concerns remain a source of headwinds for the market. The supply side outlook remains bullish, however, and that should help cocoa remain well supported on pullbacks. The likelihood that an El Nino weather event later this year will have a negative impact on West’s Africa’s 2023/24 cocoa production may provide underlying support. However, lukewarm global risk sentiment early this week has weakened the demand outlook for discretionary items such as chocolate. In addition, daily rainfall in the forecasts for West African growing areas through the end of May weighed on cocoa prices as that should improve the prospects for late harvested mid-crop beans.
COTTON
The short-term selling pressure may continue as the market absorbs a major shift in the weather for West Texas. The market has received better rains recently, and the forecast for the next two weeks shows more rain. The more normal soil conditions might help improve the outlook for Texas crop production. A rally in the US dollar has added to the negative tone. Talk of recent firmness in energy prices may provide support.
SUGAR
Sugar prices were able to benefit from bullish supply news and a rebound in key outside markets, but the market remains well below their recent highs. The International Sugar Organization (ISO) downwardly revised their 2022/23 global production surplus forecast from 4.15 million down to 854,000 tonnes, due in large part to a reduction in global production from 180.4 million down to 177.4 million tonnes. Crude oil and RBOB gasoline were able to regain strength after the weekend, and that provided carryover support to the sugar market as it may help to improve ethanol demand. The Brazilian currency put together a moderate rebound that should ease pressure on Brazilian mills to produce sugar for export.
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