Demand Data For Cocoa This Week
Cocoa has received some bullish near-term supply developments over the past few weeks, but they have been more than offset by concern over global demand prospects that started at the beginning of the second quarter. Until the market has a chance to digest critical demand-side data later this week, cocoa will have a tough time regaining upside momentum.
Coffee price continue to hold their ground above the 2 1/2 month low from earlier this month. While there have been bearish near-term developments from both the supply and demand sides of the market, coffee is showing more signs that a longer-term low may be in place. While major Brazilian Arabica-growing regions have rain in the forecast through the weekend, precipitation totals are being dialed back which provided the coffee market with support.
There is still no technical sign of a peak and the weekly cotton conditions report did not give the market much in the way of the impact on the crop from the hurricane. Too much rain for the India and US crops are a key supportive force. The 1-5 day forecasts call for some rainfall (1/4 inch or less) in Louisiana, Arkansas and Mississippi, while the 6-10 day forecast calls for above normal rainfall across east-central Texas, the Delta and parts of the southeast, so those areas that were hit by heavy rainfall from the hurricane may not be out of the woods yet.
Sugar prices were able to avoid significant long liquidation yesterday after Monday’s negative price action. While there have been some bullish near-term supply developments to provide support, sugar may have trouble reaching a new high for the move again with a wide-sweeping outside-day down session on Monday. Stronger energy prices provided sugar with carryover support as they may help to strengthen Brazilian domestic ethanol demand.
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.