ADMIS News
COCOA
September cocoa was moderately higher overnight but stayed inside Friday’s range. The market finished last week with a loss of just $1 and remained well clear of if its mid-month lows. Gains in European and US equity markets provided cocoa with carryover support on Friday in ideas that this could improve demand, and further gains in the stock market overnight could bring additional support today. Indications that West African producers will see lower production for 2021/22 continues to underpin prices.
COFFEE
September coffee was moderately higher overnight after a sharp selloff on Friday. Its 13-cent pullback last Thursday and Friday gave back all the market’s gains over the previous six sessions. Near-term demand concerns remain a source of pressure, but the market has received some bullish supply developments recently that may help it find its footing. September coffee finished last week with a loss of 4.45 cents (down 2%) for the third negative week in a row. Several forecasts for an improvement in 2022/23 Brazilian Arabica production weighed on the market going into the weekend. The USDA has raised its forecast to 41.5 million bags, and Citigroup is expecting a rebound as well.
COTTON
December cotton fell to its lowest level since January 14 overnight after closing sharply lower for the fourth straight session on Friday. Every day last week, the market opened near unchanged, sold off sharply, and closed near the low of the day. This suggests that the market is still liquidating and has not yet found a bottom. Prices were down 16% for the week. The weekly export sales report was disappointing and may have had a hand in Friday’s selloff, but improving weather in west Texas, concerns about demand, and speculators abandoning their positions have been the major factors for the recent decline.
SUGAR
October sugar bounced off Friday’s four-month lows overnight as a modest gain in crude oil and a generally positive risk tone lent support. The market has gotten extremely oversold, and if outside markets can maintain their support, sugar prices may be able see some short covering and lift clear of last week’s lows. October sugar finished last week with a loss of 42 ticks (down 2.2%) for a fifth negative week in a row. There was notable strengthening in India’s monsoon rainfall last week, which boosted the prospects for their next two cane crops, and that weighed on prices.
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