Positive Demand News Supports Cocoa
The cocoa market will continue to have demand concerns, but developments over the weekend appear to have put some light at the end of the tunnel. With supply developments adding further support, cocoa may be able to extend this upside breakout move towards a retest of the late September highs. March cocoa clearly benefited from bullish supply/demand news as it climbed to a 3-week high.
Coffee’s 13% gain in less than 2 weeks has put the market in a short-term uptrend. With several major producing nations looking at significant supply issues, coffee should be able should be well supported. Hurricane Iota is forecast to travel over Central American growing areas that were damaged by Hurricane Eta earlier this month.
December cotton rallied sharply on Monday in the wake of more positive news on the Covid-19 vaccine front, with a second vaccine showing strong results. Not only did the news spark a sharp rally in the stock market, it also renewed hopes for a recovery in demand once the vaccines are disseminated.
Sugar was finally able to sustain a breakout move above its October/November consolidation zone, and in doing so has reached multi-year high price levels. The International Sugar Organization sees a global production deficit of 3.5 million tonnes for the 20/21 season.
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