Cotton Short-Term Correction
Cocoa prices have seen a 187 point trading range over the past 3 sessions which resulted in its lowest closing price since mid-November. With bearish near-term supply factors outweighing a bullish longer-term demand outlook, cocoa looks to have further downside action ahead before it can find solid support.
Coffee prices continue to see downside follow-through from last Thursday’s negative daily reversal, but they remain near the top end of the April rally. While near-term demand remains uncertain, coffee has bullish supply factors than can provide the market with underlying support.
December cotton closed slightly higher yesterday after clawing back some of its losses from the steep selloff last Thursday. The dollar sold off sharply, which is supportive to cotton. The market broke last week after west Texas received some much-needed rain, and the forecasts suggest the region will have the opportunity to receive more rainfall in the next two weeks.
Although it was pressured by bearish supply news, sugar prices should remain fairly well supported on a near-term pullback. July sugar fell back from its early highs as it finished Monday’s trading session with a sizable loss.
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