ADMIS News
Cocoa’s whipsaw price action has been due in large part to the ebb and flow of global near-term demand prospects and volatility in key outside markets. The near-term supply outlook has remained bullish, however, and that has helped to keep cocoa above its 50-day moving average and on-track for a positive weekly result that will break a 3-week losing streak.
Coffee prices continued to be pressured by a bearish demand outlook and the prospect of record high Brazilian production as the market finally gave up on holding longer-term chart support and reached a new contract low. A sizable pullback in the Brazilian currency was a notable source of pressure, but it has been Brazil’s “on-year” 2020/21 crop that continues to weigh on the market.
The lower close with supportive outside markets may be a sign of a top for cotton. Concerns about the prospects for US cotton exports to China in the wake of the Chinese government’s recent action on Hong Kong has helped to pressure. China’s parliament has decided to move ahead with the national security legislation that would illegalize certain freedoms of speech and civil protests Hong Kong. President Trump responded by saying the US would react very strongly against these moves.
The global supply outlook for sugar remains bearish, so prices remain top-heavy at their current levels. The catalyst for sugar’s turnaround yesterday came from a rebound in crude oil and gasoline prices that should help to improve near-term ethanol demand, and more than offset a sharp selloff in the Brazilian currency.
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