ADMIS News
COCOA
Cocoa prices have put together their second winning streak of 3 sessions or more since reaching a new contract low in mid-July. The market remains in the middle of its late June/early August trading range, however, and will need a turnaround in key outside markets and global risk sentiment to soothe near-term demand concerns. Concern that a shortage of fertilizers and pesticides will negatively impact upcoming West African production provided underlying support to the market.
COFFEE
Coffee prices have had a volatile start to August, but have been unable to break a 4 session losing streak. Although its supply outlook remains bullish, coffee may need to see stronger global risk sentiment in order to sustain a recovery move. Expectations that Brazilian and Colombian production will be negatively impacted by the La Nina weather event through year-end provided early support to the coffee market, as those 2 nations account for more than half of global Arabica output.
COTTON
Bearish news of improving crop conditions pressured the market early yesterday, but the higher close suggests that traders are more nervous with the outlook for continued dryness in West Texas. December cotton closed higher on Tuesday after first pressing through Monday’ slow. The market started off weaker after Monday afternoon’s Crop Progress showed in improvement in US cotton crop conditions last week, led by Texas. The dollar reversed higher and the stock market was lower, both of which were negative for cotton.
SUGAR
Sugar prices remain down near the lower end of their July/August selloff, but they are showing early signs that a longer-term low may be in. If it can get more carryover support from key outside markets, sugar should be able to lift above its recent trading range. A more than 1% decline in the Brazilian currency put sugar prices under early pressure yesterday. While crude oil and RBOB gasoline prices climbed well clear of Monday’s lows, they gave back much of those early gains by the close which limited any carryover support received by the sugar market.
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