Cocoa Demand Outlook Improves
Cocoa’s abrupt change in fortune has lifted prices well clear of their mid-December lows. If global risk sentiment can finish an eventful and turbulent week with a positive tone, cocoa can extend its recovery move.
Coffee was able to break a 3-session losing streak that started out the year. News that last year’s Colombian coffee production came in at 13.9 million bags provided support to the market as it showed that their output pace has fallen back over the past few months.
The market experienced follow-through technical selling below Wednesday’s low which helps to confirm the key reversal and may suggest that a significant near-term top is in place. March cotton closed lower for the second day in a row.
Sugar’s 11-session winning streak lifted prices up to multi-year highs and into overbought territory, and that left the market vulnerable to a near-term technical correction. While stronger global risk sentiment can provide some measure of support, sugar is within striking distance of a negative weekly key reversal and will need to find carryover support from its key outside markets in order to avoid further downside price action.
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.