Smaller Than Expected Cotton Production
With bullish supply developments combined with a bullish longer-term demand outlook, the cocoa market should stay fairly well supported. December cocoa reached a new 12-week high.
Coffee prices will start today on a 4-session winning streak. Reports that shipping container shortages have restricted Brazilian exports provided underlying support as that added to that nation’s recent supply woes. There appears to be little doubt in the market that Brazil’s upcoming 2022/23 Arabica production will be severely impacted by last month’s frost conditions, and that continues to underpin coffee prices.
December cotton posted contract highs for the third session in a role as the USDA supply/demand report showed bullish surprises. With the weather in Texas, traders expected higher harvested acres, better yield and increasing ending stocks. However, the USDA lowered harvested acres and lowered yield.
Sugar prices have consolidated most of Tuesday’s multi-year high. This week’s Unica supply report reflected a sizable decline in Brazil’s Center-South cane crushing and sugar production from last season, due to very dry conditions since last year and July’s frost event, and that continues to underpin sugar prices.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.