Explore Special Offers & White Papers from ADMIS

Sugar Vulnerable to Swift Pullback


Sugar prices have benefited from an upsurge in key outside markets early in October, but the market continues to deal with an overall bearish supply outlook. As a result, sugar prices may have risen “too far, too fast” and are vulnerable to a swift pullback this week. For the week, March sugar finished with a gain of 100 ticks (up 5.7%) which was a second positive weekly result in a row. A sizable rally in crude oil prices provided the sugar market with carryover support as that should give a boost to ethanol demand in both Brazil and India. Brazil’s Center-South mills have shifted some of their crushing from ethanol production to sugar production in recent months, however, and may avoid further large adjustments until Brazil’s Presidential run-off election is completed later this month.

sugar cubes


Cocoa prices have fully recovered from their late September downdraft and held up fairly well in the face of a “risk off” mood across global markets. While recent bullish supply developments should help to underpin cocoa prices, an uncertain fourth quarter demand outlook may limit further upside. For the week, December cocoa finished with a gain of 42 points (up 1.8%) which was a second positive weekly result in a row. Early indications that this season’s West African production will see little if any improvement from last season continues to fuel cocoa’s recovery move. Both Ivory Coast and Ghana increased their minimum purchase prices this season, which was also seen as a positive development for cocoa prices. Starting today, there is daily rainfall in the forecast for West African growing areas. While that may cause delays with harvesting, drying and transporting cocoa beans, it will also benefit the region’s late main crop and early mid-crop production.


December cotton closed higher on Friday after trading to its lowest level since September 2021 earlier in the session. The market attempted to follow through on its declines from Wednesday and Thursday, but the selling appeared to dry up. This was the fourth straight weekly decline, as traders continued to fret about demand. The dollar recovered after plunging earlier in the session, which contributed to concerns about US export prospects. The rally in crude oil provides some support. For the USDA monthly supply/demand report on Wednesday, the average trade expectation for US 2022/23 production is 13.34 million bales, with a range of expectations of 12.80 to 13.65 million and compared to 13.83 million in the September report. US exports are expected to come in around 12.48 million (range 12.20-12.60 million), down from 12.60 million in September.


Coffee has seen whipsaw price action over the past few weeks as near-term demand concerns have kept the market from sustaining upside momentum. Coffee continues to receive bullish supply news, however, and that may fuel an upside move if and when global risk sentiment can improve. For the week, December coffee finished with a loss of 3.45 cents (down 1.5%). There were reports that coffee trees in Brazil’s top-producing state of Minas Gerais were damaged by heavy rainfall and hail, which helped the coffee market regain strength Friday. A September update showed that Colombia’s annualized production pace has reached an 8-year low, which provided additional support to the coffee market. A mild rebound in the Brazilian currency was another source of strength.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started