Cotton Lower Post USDA Supply/Demand Update
Cocoa prices were able to put some brakes on their 3-session losing streak, but they remain well below last Wednesday’s 3-month high. With a positive shift in global risk sentiment and a bullish longer-term demand outlook, however, cocoa can turn back up.
Coffee’s abrupt change in fortune was able to break a 6-session losing streak with an out-side-day up. Although near-term European demand may remain an issue well into the second quarter, coffee’s bullish supply outlook for next season can help the market maintain upside momentum.
May cotton closed down the 400-point limit yesterday and closed at its lowest price level since February 5. Limits expand to 500 points today. The monthly USDA supply/demand report was bearish against expectations, but the selloff started early in the session and was already near limit down at the time of its release.
Sugar prices have had a tough time this week with key outside markets remaining under pressure. Although it has a bullish longer-term supply/demand outlook to provide support, sugar may see further downside price action before it can find its footing.
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.