Steep Downtrend For Coffee Prices
The market remains in a steep downtrend off of the early September high. After falling over 25.00 cents (down 19.1%) over the past 14 sessions, coffee is approaching price levels seen in June and July at a time when global demand was on the mend and Brazil had already reached “peak supply”.
The cocoa market will have to clear 2 major demand hurdles over the next month, third quarter grindings totals from the 3 major regions and the Halloween holiday at the end of October. While the market has started the fourth quarter on the defensive, cocoa is receiving bullish near-term supply news that can help prices find their footing.
The market remains in a choppy and consolidation trading pattern in the last few weeks. Demand remains strong and the traders believe there was some damage done by the storms. The US dollar fell to its lowest level in more than a week, which lent underlying support for cotton.
With a sizable net spec long position and a bearish global supply outlook, sugar remains vulnerable to significant long liquidation. March sugar found early support and rallied up to match a 6 1/2 month high before finishing with a moderate gain.
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