ADMIS News
COCOA
If global risk sentiment can show any sort of improvement, cocoa seems to be in position to see a continued short-term uptrend. Next season’s West African production is unlikely to have a sizable rebound from this season, which provided the cocoa market with support. Following above-average rainfall last week, many West African growing areas are forecast to have wet weather on most days through the middle of next week. Although this would benefit cocoa trees in the region, this extended wet weather may lead to slow early progress for 2022/23 main crop harvesting and drying of beans.
COFFEE
Even with an uncertain demand outlook, coffee should continue to be well supported by a bullish supply outlook. Sluggish global risk sentiment and high inflation levels have weakened the outlook for out-of-home consumption, and that has been a source of pressure on the coffee market. In addition to sluggish global equities, a more than 1% pullback in the Brazilian currency also put carryover pressure on coffee prices.
COTTON
A modest improvement in crop conditions last week, coupled with a firm dollar and an overbought condition sparked profit taking selling yesterday. Global recession is a threat and helped pressure many commodity markets. Traders know the US crop in bad shape, but they also wonder if the worst news is already priced into the market. Conditions are still hovering around record lows. As the crop matures and bolls open, additional rainfall can cause damage.
SUGAR
Sluggish global risk sentiment and weakness from key outside markets could lead to a downbeat finish to the month. October sugar found initial support to reach a new 2-week high yesterday, but fell back on the defensive. Huge selloffs in crude oil and RBOB gasoline put severe carryover pressure on the sugar market, as their pullback is likely to weaken near-term ethanol demand prospects.
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