Explore Special Offers & White Papers from ADMIS

Key Reversal in Cotton Ahead of USDA Report


Cocoa prices have seen coiling price action since mid-December as near-term demand concerns have made it difficult to maintain upside momentum. The market continues to hold its ground above the mid-December lows, however, as a positive longer-term demand outlook has helped to underpin prices.


Although it will start this week firmly within its recent consolidation zone, coffee may be on the verge of an extended upside move. For the week, May coffee finished with a gain of 1.65 cents (up 1.3%) which broke a 2-week losing streak.


A key reversal from the contract high on Friday for Cotton with the sharply lower close is a bearish technical development. The reversal suggests a near term peak may be in place. Part of the rally has been based on ideas that Chinese demand will stay strong and that US ending stocks will continue to tighten.


The market pushed up to a new contract high this morning. While it clearly benefited from strength in key outside markets, sugar has also found support from bullish supply/demand factors. If global markets can sustain a “risk on” mood, sugar can climb up to multi-year highs.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started