ADMIS News
COCOA
There were updated forecasts that have increased the chances for a new La Nina weather event to start later this year, and that weighed on cocoa prices as that usually results in an uptick in West African rainfall. There have been forecasts in recent weeks that Ivory Coast and Nigeria will both have sizable declines in production during the 2021/22 season, so the prospect of above-average rainfall during the first quarter of 2022 may help to soothe concern with their upcoming main crop output.
COFFEE
After starting September within a fairly tight consolidation zone, coffee prices have slid to the downside. Although the market continues to have a bullish supply outlook, coffee may need to see improved demand prospects in order to regain upside momentum. The International Coffee Organization (ICO) adjusted their forecast for a 2020/21 global production surplus from 2.01 million up to 2.63 million bags, which compares to a 5.09 million bag surplus during the 2019/20 season.
COTTON
December cotton experienced somewhat bearish technical action on Wednesday, and then follow-through selling yesterday, and the close below 93.68 is a bearish technical development. Open interest is at the highest level since June of 2018 so a big surprise for the report could spark significant volatility. The results of the USDA report will set the tone for the market into next week.
SUGAR
Sugar prices have been pressured by sluggish outside markets, but also from bearish supply developments in Brazil and India. As a result, sugar may need to see bullish results from key supply-side data to form a short-term low. March sugar broke out of its August/September consolidation zone to the downside and reached a new 4 week low.
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