Softs Market Update
While cocoa prices have fallen back from last Monday’s 12-week high, the coiling action late last week is evidence that they have found their footing. With improving global risk sentiment likely to give a boost to its demand outlook, cocoa may be in a good position to regain upside momentum.
With improving global risk sentiment and stronger key outside markets, coffee could see upside follow-through early this week. For the week, September coffee finished with a gain of 2.50 cents (up 2.5%) which broke a 3-week losing streak and was a positive key weekly reversal.
The market remains in a steady uptrend and July cotton closed sharply higher on Friday as the buying pushed the market up to the highest level since March 11th. The market continued its steady rally off the April 1st contract low last week, adding to its series of higher lows and higher highs.
Sugar prices have extended their upside breakout move as they are getting significant carryover support from key outside markets. Although the recent strength of those outside markets will have an impact on the global supply outlook, the sugar market may have gotten ahead of itself and may have limited upside.
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