ADMIS News
COCOA
The cocoa market continues to deal with demand concerns (sparked by Covid) that could last well into 2022, but in the wake of the recovery on Tuesday, it is showing signs that it has found an area of support. Comments from UK Prime Minister Johnson and US President Biden did NOT include fresh lockdown measures (which have been implemented in several European nations), and that was seen a beneficial for chocolate purchases.
COFFEE
March coffee has clawed back some of its losses from Monday as an improvement in risk sentiment sparked recoveries in equities and a host of commodity markets, but the action does not look like a flat-out rejection of Monday’s low. The market still has bullish supply factors to provide underlying support, but significant quarterly and yearly gains may have left it vulnerable to bouts of long liquidation and profit-taking.
COTTON
March cotton rallied on Tuesday with an improvement in risk appetites, and the market held those gains overnight. The stock market was higher yesterday, and this lent support to cotton. Ideas that the Omicron variant, while more transmissible, produces less severe illness put the market at ease. The US EPA is assessing whether the herbicide Dicamba can be sprayed on cotton and soybean crops that have been genetically modified to resist the chemical without causing unreasonable risk to other crops. If the US EPA decides to limit its use, it could lower US cotton output.
SUGAR
March sugar has managed to recover a good portion of Monday’s selloff with a modest recovery on Tuesday and even better gains overnight. Monday’s selloff may have been the culmination of a move that began last Wednesday when the market broke below its recent consolidation and fell below the 50-day moving average. Energy prices bounced off Monday’s lows on Tuesday, which lent support to sugar on ideas it would support ethanol demand in Brazil and India.
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