ADMIS News
COCOA
A sizable rally in European and US equity markets helped cocoa prices to stabilize. This may help to shore up near-term demand prospects in both regions. A new multi-year low for the Eurocurrency was a source of early pressure on the cocoa market as extended weakness in that currency could make it more difficult for Euro zone grinders to acquire near-term supply. Of the 12 nations who are expected to grind 100,000 tonnes or more of cocoa during the 2021/22 season, only Canada is forecast to see a decline from their 2020/21 grindings total.
COFFEE
Coffee has been unable to sustain upside moves for longer than 2 sessions in a row since reaching a multi-year high in mid-February. A more than 30.00 cent selloff over that timeframe should significantly reduce coffee’s net spec long position which can help the market find a near-term low soon. A more than 2% rebound from a new 2-week low in the Brazilian currency provided the coffee market with early carryover support as that can help to ease pressure on Brazilian farmers to market their remaining near-term supply.
COTTON
May cotton closed sharply lower yesterday after an almost mirror image of Monday’s sharply higher day. It was an inside day, but the close back under 119.67 is a bearish technical development. This was despite another sharply higher day for crude oil, which traded to its highest level since May 2011. Traders blamed profit taking for the selloff in cotton.
SUGAR
Sugar prices have gained more than 1.00 cent in value so far this week (up 5.9%) as they continue to benefit from the updraft in energy prices following Russia’s invasion of Ukraine. While this leaves the market vulnerable to a near-term pullback if energy prices swiftly turn to the downside, bullish supply/demand factors can help sugar to hold its ground above its February consolidation zone.
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.
