Record Cocoa Production This Season
Bullish supply factors have fueled this week’s recovery move. The near-term demand outlook remains subdued, however, and that may limit further upside. December cocoa was able to shake off early pressure and overcome sluggish global risk sentiment to finish higher yesterday.
Coffee prices are closing in on a new monthly high. Although sluggish global risk sentiment and rising COVID case counts may dampen its demand outlook, coffee should find more than enough support from a bullish supply outlook.
December cotton closed lower yesterday with a quiet inside trading sessions. There was a sharp drop in the US stock market in the wake of the bombings at Kabul Airport, and that likely pressured cotton as well. The export sales report was decent, but traders may have been disappointed by the relatively small sales to China.
A sizable pullback in crude oil and RBOB gasoline prices weighed on the sugar market yesterday as that could weaken Brazilian domestic ethanol demand prospects. Energy is back up this morning. The steep drop in the US stock market and a bounce in the US dollar added to the negative tone.
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