Another Cold Night For Arabica Coffee
Cocoa prices remain far below their 3 major moving averages, but they have put together back-to-back positive daily results for only the second time during July. If global risk sentiment continues to mend, cocoa can extend a recovery bounce.
Another cold night for Brazilian Arabica growing areas added to this week’s frost damage, and that gave a significant boost to the coffee market as it is likely to further reduce their upcoming 2022/23 “on-year” coffee crop. Brazilian coffee trees have dealt with very dry conditions since the second half of 2020 and may have another La Nina to contend with later this year, so there was little room for any additional negative weather conditions.
December cotton closed higher yesterday after spending the day inside Tuesday’s range. The dollar was weaker, which is supportive to cotton. Furthermore, a potential outside day lower in the September Dollar Index is a negative technical development for the index, which could ultimately lend support to cotton.
While sugar has been impacted by weather issues in Brazil, the market has faced headwinds from recent weakness in key outside markets. Now that those outside markets are regaining their strength, sugar can extend its recovery move.
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