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Solid Uptrend For Sugar Futures


If global risk sentiment and key outside markets can regain a positive tone, cocoa should extend its July/August recovery move. Global risk sentiment has remained subdued early this week due in part to reports of rising new COVID case counts in the US and China, but the prospects for longer-term global demand improvement once COVID restrictions are relaxed in many regions has been able to underpin cocoa prices.


Coffee continues to hold within a tight price range. December coffee was able to shake off early pressure yesterday with an outside-day trading session and a sizable gain. A pullback to a 1-month low in the Brazilian currency weighed on coffee prices early in the day as extended currency weakness will give more incentive for Brazil’s farmers to market their coffee to foreign customers.


With improving crop conditions, bearish outside market influences and expectations for increasing ending stocks for the USDA update, the cotton market looks vulnerable to a corrective break from the overbought condition. The market closed sharply lower on the session yesterday with weakness in energy markets, a collapse in gold and weakness in other agricultural markets helping to pressure.


The sugar market remains in a solid uptrend, but a very rough day for commodities spilled over to the sugar market to trigger some selling pressures on Monday. The market is trading sharply higher this morning. The bearish tone for sugar was centered on the sharp break seen in energy prices, as this could reduce ethanol demand.

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