ADMIS News
COCOA
Cocoa prices had a lukewarm finish to last week’s trading, but will start this week’s action nearly 90 points above last Tuesday’s 3 1/2 month low. While near-term demand will continue to be a source of concern, cocoa seems to be in position for at least an oversold bounce. For the week, however, July cocoa finished with a gain of 13 points (up 0.5%) which broke a 2-week losing streak and was a positive weekly reversal. A rebound in the Eurocurrency and British Pound provided cocoa with carryover support.
COFFEE
Coffee prices have been unable to sustain a recovery move since early February as they continue to be pressured by near-term demand concerns. With South American production issues likely to continue through much of this year, however, coffee may be able to bounce. For the week, however, July coffee finished with a loss of 5.05 cents (down 2.2%) which was a second negative weekly result over the past 3 weeks.
COTTON
July cotton closed lower on Friday after trading to a new contract high for the second straight day and the key reversal is seen as sign of a possible short-term top. The market had gotten short term overbought after the sharp rally last week, so it was not surprising to see a pullback. Prior to the selloff on Friday, the nearby contract reached its highest level since July 2011. The bulls had been encouraged by a strong export sales report on Thursday and ongoing concerns over the US crop.
SUGAR
For the week, July sugar finished with a loss of 6 ticks (down 0.3%) and a third negative weekly result in a row. A rebound in crude oil prices and the Brazilian currency were both sources of carryover support, as that combination should help to improve near-term Brazilian ethanol demand. In addition to a slow start to 2022/23 Center-South harvesting and crushing, the latest Unica supply report showed mills increasing ethanol’s share of crushing from last year’s levels. In addition, Center-South domestic ethanol sales are on-track for a second month in a row with a year-over-year increase, which also reflect ethanol demand improvement.
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.
