Cocoa Demand Outlook Improves
Cocoa’s abrupt change in fortune has lifted prices well clear of their mid-December lows. If global risk sentiment can finish an eventful and turbulent week with a positive tone, cocoa can extend its recovery move.
Coffee was able to break a 3-session losing streak that started out the year. News that last year’s Colombian coffee production came in at 13.9 million bags provided support to the market as it showed that their output pace has fallen back over the past few months.
The market experienced follow-through technical selling below Wednesday’s low which helps to confirm the key reversal and may suggest that a significant near-term top is in place. March cotton closed lower for the second day in a row.
Sugar’s 11-session winning streak lifted prices up to multi-year highs and into overbought territory, and that left the market vulnerable to a near-term technical correction. While stronger global risk sentiment can provide some measure of support, sugar is within striking distance of a negative weekly key reversal and will need to find carryover support from its key outside markets in order to avoid further downside price action.
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