ADMIS News
COCOA
Cocoa prices have followed through on last Wednesday’s positive daily reversal and climbed well above their 2021 and 2022 lows. If global risk sentiment continues to mend, cocoa should be able to extend this current recovery move. Stronger global equity markets combined with rebound in the Eurocurrency and British Pound early this week provided carryover support to the cocoa market as that should help to improve near-term chocolate demand prospects. In addition, news that Mondelez will purchase Clif Bar Company for nearly $3 billion bodes well for chocolate’s longer-term demand outlook.
COFFEE
While high inflation levels in many areas of the world will weigh on near-term demand prospects, coffee will find support from what continues to be a bullish supply outlook. A positive tone to global risk sentiment provided coffee with early strength as that should help to improve out-of-home consumption prospects. In addition, a nearly 1% rebound in the Brazilian currency provided the coffee market with carryover support as that may ease pressure on Brazil’s farmers to market their current coffee supply to foreign customers.
COTTON
December cotton remains in a steep downtrend and further weakness in outside market forces overnight has kept sellers active. The selling has pushed the market down to the lowest level since March 29th. The market was pressured by a steep selloff in the grains after the weather forecast turned less threatening in the Midwest. Ironically, the forecast showed the extreme conditions moving into the Deep South, which is where cotton is grown.
SUGAR
Sugar prices have had trouble following through on last Thursday’s positive daily reversal, but they continue to lift clear of their May and June lows. Crude oil and RBOB gasoline regained upside momentum after last week’s downdraft, and that provided carryover support to the sugar market as it should help to strengthen near-term ethanol demand.
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