Cocoa Higher, Most Softs Lower
Cocoa will continue to face demand concerns until virus restrictions are reduced or eliminated. Strength in several key outside markets reflect optimism that will occur in one major region by the end of this year, and that has helped cocoa prices to grind their way to the upside.
Coffee’s updraft has lifted prices nearly 14.00 cents above their mid-June contract lows (up 14.6%), which provides additional evidence that a longer-term low has been put in. September coffee busted out of its recent consolidation zone and reached a 9-week high.
The outside day down yesterday is a bearish technical development and suggests a further downside correction below Monday’s low may be in order. Traders are nervous with the China/US trade relations and if trade tensions escalate, traders are nervous that some US cotton on the books with China could get canceled.
Sugar prices are holding their ground within the near-term consolidation zone, but have not able to climb back towards the upper end of their June/July trading range. With a bearish 2020/21 supply output remaining a front and center issue for the market, sugar will need much more carryover support from key outside markets to lift clear of its recent lows.
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