ADMIS News
COCOA FUTURES
Cocoa remains on-track for a second negative monthly result in a row as concern over near-term demand has kept the market under pressure. While bullish supply-side developments can provide some measure of support, cocoa needs to see demand-side improvement before it can sustain a recovery move. Multi-decade high inflation levels are leading to consumers in many developed economies pulling back on their discretionary spending and vacation travel, and that has weighed heavily on cocoa prices over the past few months.
COFFEE FUTURES
The market continues to receive bullish supply news that can help coffee prices move higher if the negative demand tone were to ease. Updated forecasts are calling for lower than normal rainfall over major Brazilian growing regions over the next 7 days, which provided the market with underlying support. Brazil’s south Minas Gerais have dealt with drier than normal conditions for close to 2 years now and have a La Nina weather event that may extend those conditions through late this year.
COTTON FUTURES
July cotton surged higher on the session yesterday from a deeply oversold short-term condition. Talk of some commercial fixations against the July contract may have sparked some buying and short covering. The short-term demand tone remains quite bearish. Chinese demand looks sluggish with the lockdowns, and global demand could take a short-term hit as consumers are paying sharply higher energy and food costs, and this leaves less discretionary income. Traders will monitor export sales news with last week’s data sluggish. The 6-10 day forecast models show normal to slightly above normal temperatures and above normal precipitation.
SUGAR FUTURES
Since reaching a 1-month high last week, sugar prices have been unable to extend the rally and have seen choppy action. The market continues to receive bullish supply developments and carryover support from key outside markets. Forecasts for record high production and exports from India this season have weighed on the sugar market, as their export limit of 10 million tonnes would be 2.8 million above their previous record high last season.
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