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Demand Prospects in Cocoa


Cocoa will continue to have concerns with global demand beyond the Halloween holiday, but the market is showing signs that it was extremely oversold at last week’s lows. With near-term supply issues providing fresh support, cocoa should be able to extend this current recovery move. A sharp rally in the Eurocurrency became a major source of carryover support for the cocoa market as it should help to improve near-term European demand prospects.


Coffee prices continue to hold their ground above the early October lows, but are finding fresh demand-side pressure that may be difficult to overcome. While the market is approaching “bargain” price levels again, coffee is vulnerable to additional selling.


December cotton remains in a steep uptrend and the buying Monday pushed the market up to the highest level since January 29. Above normal rain forecast for the southeast and Delta regions has traders increasingly worried about harvest and demand factors remain supportive.


Sugar prices have overcome sluggish global risk sentiment and lukewarm energy prices to extend their October rally even further into new high ground. While there have been some bullish near-term supply developments, it may be difficult for sugar to take out their multi-year highs from February unless there is a significant longer-term change in the 2020/21 global supply outlook.

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.

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