Sugar Markets Rebound
Cocoa prices have been unable to shake off concern over global demand as the market has fallen well below its early June consolidation zone. September cocoa started out the week squarely on the defensive as it reached a new 8-week low.
Coffee’s bearish supply outlook has kept a lid on prices during June even as there were some modest signs of improving demand. September coffee broke out to the downside and posted a new contract low. A more than 2% selloff in the Brazilian currency weighed on coffee prices as it gives more incentive to Brazil’s farmers to market their near-term supply to foreign customers.
December cotton pushed under the key uptrend channel off of the April 2nd contract low, but managed to close slightly above it yesterday. A close below 58.35 today would be considered bearish and turn the trend down. Even with some harsh weather, the crop conditions stayed steady in the past week. With rain in the forecast for West Texas, the market looks vulnerable to a further selloff.
Sugar has been resilient as it rebounded from early pullbacks for 2 sessions in a row. Carryover support from a key outside market and improved risk sentiment helped sugar to find its footing, but the market may need additional bullish supply/demand developments to extend its June rally.
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