ADMIS News
COCOA
After falling more than 200 points over 5 sessions, cocoa appeared to find its footing late last week. While near-term demand is a source of concern, cocoa has fallen into what appears to be bargain price territory. For the week, March cocoa finished with a loss of 82 points (down 3.2%) which was a second negative weekly result in a row.
COFFEE
After last week’s bumpy ride, the coffee market may be ready to begin a longer-term upside move. For the week, March coffee finished with a loss of 2.00 cents (down 0.8%) which was a second negative weekly result in a row. Outside market volatility has risk appetites fluctuating, but last Friday’s sizable rebound in US equities provided coffee with carryover support. Brazil’s biannual coffee crop cycle makes 2022/23 an “on-year” for their Arabica production, but drier than normal conditions since mid-2020 have lowered expectations for the upcoming season.
COTTON
March cotton closed higher on Friday after breaking out of its recent rally and trading to another new contract high. The market has closed higher for eight weeks in a row, and the nearby contract has traded to its highest level since July 2011. The export sales report was strong last week, but traders are concerned that the higher prices could hurt short term demand. A move in the dollar index to its highest level since July is also a concern for exporters.
SUGAR
Sugar prices will start this week on a 7-session losing streak as market focus has shifted towards major Asian producing nations. Trade fears too much supply in India and slow Brazil demand. Given the recent strength in key outside markets, however, sugar prices are relatively cheap at current levels and should find their footing soon. For the week, March sugar finished with a loss of 70 ticks (down 3.7%) which broke a 2-week winning streak. Sugar remained on the defensive Friday in despite another move to new contract highs in crude oil and RBOB gasoline, both of which would normally lend support on ideas that it would boost ethanol demand and pull cane crushing operations away from sugar.
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