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Volatile Uptrend in Cocoa Continues


Although this year’s Halloween will be much more subdued than normal, cocoa is finding fresh supply/demand support that can help prices find their footing. US equities found their footing, but that followed losses in Europe and Asian that was a source of early carryover pressure yesterday. However, it was a sharp selloff in the Eurocurrency that fell to a new 8-week low that provided the largest source of selling as Euro zone grinders account for over 30% of global cocoa production without a domestic source for cocoa beans.


Coffee prices remain on the defensive as they have fallen over 21.00 cents in valued (down 16.4%) during the 7-session losing streak. While still higher for the quarter, bearish supply development may continue to fuel additional long liquidation.


December cotton closed higher yesterday with a small range and an inside trading day. This was despite pressure from a stronger dollar, reflected in the Dollar Index trading to a two-month high. Traders are watching Tropical Depression Beta, which is bringing heavy rains and flooding along the Texas coast.


Sugar prices have been resilient in the face of lukewarm carryover support and a still-bearish global supply outlook. Bullish near-term weather developments are fueling upside momentum but with 6 sessions left in the third quarter and the market on-track for a fifth monthly gain in a row, sugar remains vulnerable to long liquidation.

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