ADMIS News
COCOA
Cocoa prices fell back on the defensive yesterday as global risk sentiment turned sour, but recent bullish supply developments helped the market bounce late in the day. With a positive turnaround in risk appetites after cocoa’s close, it may be able to see a recovery bounce. The Russian invasion of Ukraine weighed heavily on cocoa prices as that will negatively impact European near-term demand prospects.
COFFEE
After a 2-day break, coffee prices restarted their correction from multi-year highs as a “risk off” mood fueled additional long liquidation and profit-taking. With the market continuing to have a bullish supply outlook, the market seems set to find a floor soon. Ongoing Ukraine/Russian tensions weighed on the coffee market as that is likely to reduce out-of-home consumption, particularly in Europe.
COTTON
May cotton experienced an outside day down yesterday and took out four days of trading range to close at the lowest level since January 25. The early rally challenged the contract high, but the market remains under the negative technical influence of the February 4 key reversal. The chart pattern looks bearish, the surge higher in the US dollar was seen as a negative force and traders remain concerned that a major conflict in the Black Sea region could hurt the global economy, and might spark lower demand for cotton. A surge in the US dollar was also seen as a negative force.
SUGAR
While it is likely to find carryover pressure from key outside markets, sugar should remain fairly well supported on a near-term pullbacks. A sharp rally in energy prices to new 7-year highs boosted the sugar market as that should strengthen ethanol demand. However, crude oil finished yesterday more than $3.00 a barrel off of the highs and that is a source of early carryover pressure. In addition, a more than 2% pullback in the Brazilian currency pressured sugar prices late in the day as that may encourage Center-South mills to favor sugar in their 2022/23 crushing.
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