Steady Demand For Cotton
Cocoa’s near-term demand outlook remains uncertain as the spread of the Delta COVID variant continues to push a full reopening of many of the world’s economies even further into the future. As a result, cocoa is likely to take direction from the ebb and flow of global risk sentiment.
The market has stabilized over the past three days. As the market receives a clearer picture of Brazilian frost damage, coffee may be able to turn back up. However, the spread of the Delta COVID variant has kept further gains in check as that could lead to reduced operations by restaurants and retail shops.
It is impressive to see December cotton close higher for the third session in a row yesterday in the face of sharply lower stock market, a significant jump in the US dollar and a sharp break in crude oil prices. Traders believe demand is strong but the current export pace does not suggest any change by the USDA for the August report.
While sugar prices have yet to regain much of the lost ground from the July month-ending pullback, they remain well clear of the June and July lows. If global risk sentiment and key outside markets can regain strength, sugar prices could climb above the late July highs.
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