Rains Help Coffee Crops
With Brazil’s 2020/21 harvest complete, a shift in focus toward upcoming production in Brazil and Colombia may help the coffee market extend its recovery move. For the week, December coffee finished with a gain of 2.60 cents (up 2.4%) which was a second positive weekly result over the past 3 weeks. The prospect that a La Nina weather event will keep Brazil’s major Arabica growing regions drier than normal provided significant support to coffee prices as their 2021/22 “off-year” crop was already expected to have a sharp decline from this season’s near-record high total.
Cocoa prices finished last week on a downbeat note in spite of stronger key outside markets as global demand concerns remain a front-and-center issue for the market, and the short-term weather carried a bearish tilt. Critical demand-side data late this week could be a source of pressure over the next few sessions.
With new highs for the fourth session in a row, traders are clearly concerned over significant hurricane damage from the recent heavy rains in the US. This, along with a sense of strong demand has helped to keep the market in a steady uptrend. Production fears may peak soon with the supply/demand report and the expected impact of Hurricane Delta to US Gulf coast.
Sugar prices continue to maintain upside momentum as they have been supported by a bullish shift in Brazilian weather conditions. March sugar reached a new 7-month high before finishing Friday’s outside-day trading session with a moderate gain.
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.