Texas Hot Forecast
The cotton market has been drawing support from the hot and dry conditions in west Texas, but we question whether some additional damage to the crop there will offset the bearish developments from last week’s USDA reports. US 2020/21 ending stocks are now projected at 7.6 million bales, which is the highest they have been since the 2007/08 marketing year.
Cocoa’s abrupt change in fortune on Friday may be symptomatic of its overbought status, but it also reflects the impact of sluggish global risk sentiment on its near-term prospects. While bullish supply developments provide some support, the market may see early downside action this week until stronger risk appetites emerge.
December coffee pushed lower overnight, through last Friday’s lows, yet it comes into the week well above last Tuesday’s 3-week low. It finished last week with a loss of 1.45 cents (down 1.2%) which was a second negative weekly result in a row.
October sugar broke out above its August consolidation zone last week on bullish supply news. However, the market remains on track for a large production surplus for 2020/21 and may be starting to get top heavy.
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