Downside Trend in Sugar
The cocoa market appears to have started a technical correction on Wednesday, and the market looks vulnerable to a short-term break. Like several other physical soft commodity markets, the cocoa market came under a wave of selling potentially accentuated by a series of stop loss sell orders.
After a 3-session and more than 7.00 cents, coffee prices may have found their footing as they continue to hold their ground above the 3-major moving averages. We suspect that coffee was feeling outside selling pressure from weakness in other soft commodities, but prices obviously respected this week’s consolidation low pricing.
March cotton closed moderately lower on Wednesday after spending the day inside Tuesday’s range. Volume was low ahead of the holiday and the technical action is a bit negative with the market trend threatening to turn lower. A hefty supply outlook has been offset by supportive outside market forces. The 1-5 day forecast calls for heavy rain across the cotton belt, which could delay harvest.
Sugar prices remain squarely on the defensive as they have fallen nearly 1.00 cent below their mid-November high. The sugar market came under aggressive liquidation on Wednesday after a key failure on the charts which might have been the result of stop loss selling but the market is seeing a recovery bounce this morning.
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