Sugar Prices Hold
While there have been bullish supply-side developments that have provided support over recent weeks, cocoa’s second quarter recovery move has been held in check by concern over global demand prospects. With global risk sentiment and key outside markets both taking a severe negative shift, cocoa prices could stay on the defensive.
Coffee prices are being pressured by a near-term demand outlook that has been damaged by a negative shift in global risk sentiment. September coffee started out under pressure and reached a new contract low yesterday but the selling dried up.
The cotton market pushed moderately lower on the session and down to a seven session low as the bearish news from the supply/demand report was more than enough to offset positive weekly export sales news. In the supply/demand report, ending stocks were increased to 8.00 million bales from 7.70 million previously, contrary to expectations calling for 7.37 million. This is the highest ending stocks in the last 13 years.
Sugar prices continue to hold their ground within the recent consolidation zone, but face a bearish supply outlook, slumping risk appetites and negative outside markets. Unless a “risk on” mood can redevelop fairly quickly, sugar is in danger of a negative weekly reversal.
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