ADMIS News
SUGAR
Sugar’s coiling price action over the past 2 weeks has resulted in a more than 1.10 cent pullback (down 4.4%) as the market has shifted focus from south Asia towards Brazil. With a key Brazilian supply gauge coming out at midsession, sugar prices may remain on the defensive. Continued strength in crude oil and RBOB gasoline prices has failed to provide sugar with much support. The latest Unica Center-South supply report will released today, which may have fueled profit-taking and long liquidation. There are trade forecasts expected for today’s report (which covers the first half of May) to show Center-South sugar production to come in roughly 30% above last year’s total, due in part to drier weather allowing for cane harvesting and crushing to return to full speed.
COCOA
While cocoa prices have posted three negative daily results in a row, they continue to hold above last week’s lows as this week’s pullback has been met with buying support. With the market receiving fresh bullish supply news, cocoa may be able to regain and sustain upside momentum. A negative tone to global risk sentiment continued to weigh on cocoa prices as that is likely to weaken near-term demand prospects. In addition, the Eurocurrency and British Pound reached new 2-month lows which put carryover pressure on the cocoa market. A report that Nigeria’s April exports were more than 20% below last year and more than 46% below their March export total provided a late boost to cocoa prices. There is daily rainfall in the forecast for West African growing areas through early June which may cause fresh delays to harvesting and drying mid-crop cocoa beans.
COFFEE
Coffee’s coiling price action has started to tighten, which may set the market up for a breakout move from its consolidation zone. While near-term demand prospects and Brazil’s upcoming production remain uncertain, coffee has received bullish supply developments that can help lift prices. A “risk off” mood among many global markets was a notable source of pressure on the coffee market, as that could have a dampening effect on restaurant and retail shop consumption. The USDA forecast Vietnam’s 2022/23 coffee production (which is mostly Robusta) at 29.75 million bags, which is a 6% decline from last season’s output, and they also said that Vietnam’s coffee stocks have fallen sharply. London Robusta prices reached a new 15-year high this week due in large part to tight Vietnamese supply this year, and that continues to provide carryover support to New York Arabica coffee prices.
COTTON
The market remains in a short-term downtrend. July cotton closed sharply lower on the session yesterday and back under the 100-day moving average as traders see demand struggling, and traders also see improving weather for the new crop season. The market has closed lower for three sessions in a row and closed under the 50% mark of the March 24 to May 19 rally. The very strong US dollar and a break in the stock market were seen as bearish forces. The market failed to find much support from the higher energy prices as the short-term weather carries a bearish tilt.
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