ADMIS News
COCOA
Cocoa continues to have lukewarm near-term demand and ample near-term supply, both of which may continue as sources of pressure into the third quarter. A positive longer-term demand outlook continues to provide underlying support. A rebound in global risk sentiment provided strength to European and US equity markets and also led to sizable recovery moves in the Eurocurrency and British Pound, all of which provided carryover support to the cocoa market.
COFFEE
If global risk sentiment can continue to improve, coffee can extend a recovery move this week. September coffee was able to rebound from a 5-week low to finish Monday’s outside-day trading session with a sizable gain. Stronger global risk sentiment coming out of the weekend gave a boost to the coffee market as that could lead to improved coffee consumption in many regions.
COTTON
The market has consolidated for two sessions as traders were probably hesitant to commit prior to the release of this week’s Crop Progress report. Trades may also be concerned that the heavy rains in the Delta over the weekend could have damaged the crops there. The Crop Progress Report showed steady improvement in crop conditions, with 52% of the US cotton crop rated in good/excellent (G/E) condition as of Sunday, up from 45% the previous week, 40% a year ago and a 10-year average of 47%.
SUGAR
Sugar prices have been able to successfully retest their late April lows, due in large part to recent negative outside markets. A bullish supply outlook continues to provide support, and that can help sugar follow-through on yesterday’s sweeping reversal. Reports that the first 3 weeks of India’s monsoon had rainfall come in more than 40% above the long-period average put early pressure on the sugar market as that could benefit both their 2021/22 and 2022/23 cane crops.
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