Impressive Tech Action in Sugar
While the market has been underpinned by near-term supply issues, cocoa continues to deal with an uncertain global demand outlook. March cocoa fell to a new 3-week low. A sizable early rally in the British Pound provided cocoa with carryover support.
Coffee prices have maintained their coiling price action over the past 6 sessions, but continue to hold their ground above the late November lows. While lukewarm global demand remains a concern, near-term supply issues for several major producing nations have underpinned coffee prices this week.
March cotton broke out above its recent consolidation and traded to its highest levels since November 30th. The trade apparently is more optimistic about future demand as vaccines are being rolled out in Britain and now Canada. The trade is looking for slight reductions in US and world ending stocks in Thursday’s monthly WASDE report.
Sugar prices have broken out of their late November/December consolidation zone to the upside, and did so with little carryover support from key outside markets. Although the catalyst for sugar’s turnaround was near-term bullish supply news, further upside may be difficult to find unless global risk sentiment takes a positive shift.
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