Written Commentary
COCOA
While the cocoa market has a positive longer-term demand outlook, near-term demand concerns remain a major source of pressure. Unless there is a positive turnaround from key outside markets, cocoa may be heading for a retest of its mid-December lows.
COFFEE
The market may be closing in on a near-term floor. A more than 1.5% decline in the Brazilian currency as it dropped to a new 8-week low was a major source of carryover pressure on the coffee market, as a weaker Real will make Brazil’s producers more aggressive with marketing their remaining 2020/21 coffee supplies.
COTTON
The results of the report today should set the tone. For today’s monthly USDA report, US cotton 2020/21 ending stocks are expected to come in at 5.39 million bales versus 5.70 million in the December report. US production is expected to come in at 15.66 million bales (range 15.10-16.00 million) versus 15.95 million in December.
SUGAR
Sugar was able to find its footing yesterday and did so with little carryover support from its key outside markets. While Brazil’s Center-South 2021/22 sugar production should see a notable decline from this season’s output, their 2020/21 exports are on-course for a record high total.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
