ADMIS News
COCOA
Cocoa continues to have a bullish longer-term demand outlook that should be confirmed by third quarter grindings results later this week. There are ample near-term supplies at the start of the 2021/22 season, and that has led to a negative shift in tone early this week. Lukewarm European and US equity and a mild pullback in the Eurocurrency were sources of carryover pressure on cocoa prices early this week.
COFFEE
Coffee’s longer-term uptrend has been fueled in large part by Brazilian supply issues that could impact the market until the 2023/24 season. Other major Arabica producing nations have had supply issues as well, and they were the catalyst for coffee’s abrupt turnaround early this week. Reuters is reporting that there may be delivery defaults on as many as 1 million bags of Colombian coffee, and that provided a sharp boost to coffee prices early this week.
COTTON
The market experienced follow-through selling below Friday’s low yesterday which helps to confirm the key reversal from Friday. However, the market surged higher overnight and is already testing resistance. The dollar was stronger, which is negative for export commodities like cotton, but we suspect trader caution ahead of the monthly USDA supply/demand report today has contributed to profit taking after the sharp run-up the cotton market has experienced since mid-September.
SUGAR
Sugar prices were able to extend their recovery move through the weekend and in spite of a negative shift in global risk sentiment maintained a positive tone. Although the market may remain in a coiling price pattern early this week, sugar should still find underlying support from bullish supply factors.
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