ADMIS News
COCOA
Cocoa prices have risen nearly 300 points (up 11.8%) over the past 9 sessions as a longer-term uptrend in global demand has been matched by bullish near-term supply developments. As long as global risk sentiment remains positive, cocoa should extend this updraft further into new high ground. Indications that recent hot and dry weather is likely to negatively impact West African mid-crop production has been a source of strength to the cocoa market this week.
COFFEE
Coffee’s February rally has gone into overdrive as prices have gained more than 6.5% in value over the past 2 sessions. While this has left the market vulnerable to a correction, coffee has a bullish supply/demand outlook that should leave the market well supported on near-term pullbacks. May coffee pushed to a new 10-year high. ICE exchange coffee stocks continue to see a sharp drawdown as they fell another 24,379 bags on Wednesday to reach a new 22-year low. This continues to be a major source of strength for the coffee market as that shows tightening near-term supplies and improving demand.
COTTON
May cotton is still operating under the negative technical influence of Friday’s key reversal. USDA update did not help rationalize big price; 122.70 today . The market closed slightly lower after the bearish USDA report as weakness in the US dollar, strong gains in the stock market and strength in crude oil were all seen as positive outside market forces. The USDA supply/demand report was on the bearish side of expectations for the US data. The report put US 2021/22 cotton ending stocks at 3.50 million bales versus an average trade expectation of 3.29 million (range 3.00-3.70 million) and 3.20 million in the January report.
SUGAR
Sugar has lagged behind many Ag commodity markets over the past few months as production increases from Thailand and India have weighed on prices. With its key outside market close to or into new high ground, however, sugar should be able to extend a recovery move. Crude oil and RBOB gasoline prices regained their strength following a 2-day pullback which provided sugar with carryover support as that should help to shore up ethanol demand in Brazil and India.
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.
