ADMIS News
COCOA
The cocoa market continues to suffer a loss of confidence in the wake of a steep selloff in global equity markets that has sent investors fleeing into safe-havens and has raised concerns about a global recession. Traders are also worried that higher prices for energy and basic foodstuffs will leave consumers without enough disposable income for “luxury” items like chocolate. Cocoa managed to bounce off its early lows yesterday, much like the stock market.
COFFEE
Coffee prices followed through on Wednesday’s downdraft and sold off to a three-day low yesterday, but they were able to regain upside momentum and climb into positive territory to close with a moderate gain. While Brazil’s Arabica growing areas are receiving cold weather this week, it is unlikely that they will have damaging frost. The Brazilian government agency Conab lowered their nation’s 2022/23 coffee production forecast by more than 2 million bags due to poor weather last year.
COTTON
July cotton closed higher on Thursday after trading to its lowest level since April 28 earlier in the session. The market was lower until the release of the weekly export sales report, which showed a mild improvement from the previous week. Traders also cited mill buying and a sharply lower dollar as reasons for the rally. The June Dollar Index fell to its lowest level since May 5th.
SUGAR
Sugar prices were able to recover from early pressure yesterday, but they could not hold in positive territory. The market closed lower on the session but well up from the lows. Indications that India and Thailand will have significant increase in production and exports this season have weighed on the market this week. However, a rebound in energy prices and the Brazilian currency has provided support. With strong energy prices, Brazil millers are likely to continue to shift away from sugar production towards more ethanol.
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