ADMIS News
SOFTS MARKETS FUNDAMENTALS:
Cocoa prices have had a difficult time over the past 3 1/2 months overcoming demand concerns created by global coronavirus restrictions. While they will not be fully soothed for some time, there is evidence to suggest that global demand has held up better than expected, and that may help the market break out of its recent consolidation zone.
The Coffee market will start this week squarely on the defensive after the July, September and December contracts reached new contract lows on Friday. The market is now well into “bargain” price territory. For the week, July coffee finished with a loss of 7.30 cents (down 7.0%) which was a sixth negative weekly result over the past 7 weeks. While the Brazilian currency regained 1.2% in value, that provided little carryover support to coffee.
For Cotton, the clash of strong export sales and some threatening weather with the outlook for huge ending stocks in the US “if” the weather is anywhere near normal has kept the trade choppy since May 13th. July cotton closed higher on Friday after trading to its lowest level since May 12th. For the week, the market was down 2 points as some consolidation continues.
Sugar prices have managed to hold its ground within its recent consolidation zone and above their 50-day moving average for the past 1 1/2 weeks, but that has been due in large part to carryover strength from key outside markets. Even if a global economic recovery from lower coronavirus restrictions improves demand prospects, the supply outlook remains firmly bearish which leaves the sugar market vulnerable to a sizable pullback.
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