ADMIS News
COCOA
Cocoa’s pullback on Wednesday resulted in the first negative daily result since April 25th, but the market will start today’s action with a gain for the week and month. Ongoing concern with near-term demand continues to pressure the market after 2 of the 3 major grindings regions had negative year-over-year results for the first quarter.
COFFEE
Coffee prices continue to hold their ground above the March and April lows and are starting to see signs of improving global demand. With a positive shift in risk appetites after Wednesday’s close, coffee may be able to extend a recovery move. Reports that upcoming Vietnamese production will be negatively impacted by a lack of fertilizers have provided underlying support. Although Vietnam’s output is primarily Robusta coffee, they are the second largest coffee-producing nation and have seen few supply issues over the past few seasons. Brazil and Colombia are expected to have issues with their upcoming production, and that has strengthened coffee prices this week.
COTTON
After a one-day setback, July cotton is back into new contract and multi-year highs. The market has posted contract highs for the fifth straight session. It has also closed higher for six of the past eight sessions. Nearby futures are at their highest level since July 2011. The dollar was down sharply, which lent support to cotton and other commodities. Crude oil was higher, which is supportive to cotton because higher priced oil raises the cost of man-made fibers.
SUGAR
While it continues to find support from key outside markets, sugar has been unable to regain upside momentum as a long liquidation trend continues. The sharp drop in open interest from the April 13th key reversal suggests a long liquidation trend and managed money traders were still net long 205,047 contracts in the last COT update. As a result, the sugar market could remain on the defensive.
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