ADMIS News
COCOA
Cocoa was an exception to the second-quarter commodity rally in that it was weighed down by bearish supply/demand factors. With the market reaching an eight-month low last week, cocoa is well into “bargain” territory and may be ready to begin a longer-term recovery move.
COFFEE
After starting the month with a wide-sweeping key reversal, coffee prices appeared to have found their footing late last week. Although the recent frost did not reach the major Arabica-growing regions, Brazil’s current crop will come in well below last season’s output total which should help to underpin coffee prices this week.
COTTON
December cotton closed at its highest level since June 11th, but did not take out last Tuesday’s high. The dollar was weaker, and the Dollar Index closed at its lowest level since June 29, which was supportive to cotton. With the threat to the Texas crop diminished, the trade seems to be focused on demand issues, particularly export sales, which showed improvement on Friday.
SUGAR
Sugar prices finished last week on a 4-session losing streak as it fell more than 1.20 cents below a multi-year high on July 1st. If energy prices remain well supported during the third quarter, Brazil’s Center-South mills are likely to shift more of their crushing towards ethanol production. The Center-South cane crop has already dealt with dry conditions since last year, so this could lead to a very large drop in their sugar production from last year.
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