Sharp Drop in Brazil Output Supports Coffee
The cocoa market finished last week by following through on Monday’s wide-sweeping outside day higher. Although global demand prospects will remain a concern well into 2021, the market can extend this recovery move into year-end.
Coffee was able to shake off last Monday’s washout and will start the final trading week of 2020 in close proximity to 3 1/2 month highs. While demand continues to be diminished by COVID shutdowns, coffee has several supply issues that can help the market maintain upside momentum through year-end.
Cotton prices are on-track for a seventh positive monthly result in a row and are near 20-month highs. While the market was able to bounce back from last week’s pullback, it may not be as resilient going into final trading week of the year.
Sugar is on track for an eighth monthly and third quarterly gain in row. This would normally leave the market vulnerable to long liquidation during the final trading week of the year. Sugar prices were able to maintain upside momentum going into the holiday weekend, and they can benefit from a near term bullish supply setup today.
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