ADMIS News
COCOA
Cocoa prices have been in a wide-sweeping coiling price pattern since late June as demand concerns have left the market unable to sustain upside momentum. Cocoa has held its ground above the mid-July lows, however, so a positive turnaround in global risk sentiment could become a catalyst for cocoa to have an extended rebound. Major West African growing nations continue to have a lack of fertilizers for their upcoming 2022/23 main crop production, and that provided a boost to cocoa prices.
COFFEE
Coffee prices have staying in a coiling pattern since posting an 11-month low in mid-July, but each pullback over that timeframe has posted a higher low. If the market can find some relief from near-term demand issues, coffee may be able to rally above and beyond its 3 major moving averages. Brazil’s main Arabica growing regions saw little to no rainfall last week, which strengthen coffee prices as that could extend their current production issues into the 2023/24 season. On the other hand, growing areas in Sao Paolo state and the south of Minas Gerais may see an uptick in rainfall over the next few weeks.
COTTON
December cotton closed moderately lower yesterday after spending the session inside Friday’s range. More ships leaving port in Ukraine pressured the grains, and some of this pressure spilled over to cotton. The Texas drought has persisted through the summer, and there are expectations for a large abandonment rate in Texas. This notion seems to be well founded given the results of the weekly Crop Progress report Monday afternoon. The report showed 31% of the US cotton crop was rated good/excellent as of August 7, down from 38% the previous week and below the 10-year average of 50%.
SUGAR
Sugar prices have started August with 5 positive daily results during the first 6 sessions of the month. If key outside markets remain strong, sugar prices should lift clear of its late July/early August consolidation zone. Crude oil and RBOB gasoline were able to lift clear of their recent lows, which provided the sugar market with carryover support as that can help to strengthen ethanol demand in Brazil and India.
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