ADMIS News
COCOA
While the market has been focused on demand prospects, a bullish supply-side development has helped cocoa prices to lift decisively clear of last week’s lows. A negative shift in global risk sentiment may weaken the global near-term demand outlook, however, so cocoa may have a bumpy ride ahead. Cocoa’s rebound yesterday came in spite of sizable losses in the Eurocurrency, British Pound and US equity markets that normally would have a source of carryover pressure on the cocoa market.
COFFEE
Coffee has been unable to sustain upside momentum. A bullish supply outlook and improving demand prospects remain intact, so coffee prices should be closing in on a near-term low. The Brazilian currency fell back from Monday’s 3 1/2 month high, which in turn fueled additional long liquidation as an extended pullback could encourage Brazilian farmers to market their remaining 2020/21 coffee supplies.
COTTON
Outlook for tightening ending stocks fails to support; Weak December cotton moved down to the lowest level since April 30th overnight as the collapse in equity and energy markets helped to spark long liquidation selling. The USDA report showed US and world ending stocks for the 2021/22 marketing year coming in below expectations and below 2020/21 but this news failed to support new buying and the US dollar rallied sharply to add to the bearish outside market forces.
SUGAR
A key reversal for July sugar from a multi-year high combined with the collapse in equity and energy markets suggests a short-term peak is in place. With the overbought technical condition of the market, long liquidation is also a threat.
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