More Long Liquidation in Cocoa
While cocoa was finally able to put some brakes on its 3-session pullback, a 75 point pullback from a midsession high will give many longs pause. Unless global risk sentiment can see significant improvement, cocoa will remain vulnerable to long liquidation.
Strength in a key outside market can help coffee prices maintain an uptrend. A more than 1.5% rally in the Brazilian currency to a new 4-month high was a significant source of strength for coffee prices as it eases pressure on Brazil’s farmers to market their near-term supply to foreign customers.
The market remains in a short-term downtrend. Not even a second straight week of respectable USDA export sales reports was able to stem the selling. US cotton export sales for the week ending November 26 came in at 277,863 bales for the 2020/21 (current) marketing year and 21,824 for 2021/22 for a total of 299,687.
Sugar prices have seen a 2-day recovery bounce as outside markets have helped to support. However, the sugar market may need to see a rebound in global risk sentiment as well to expect much more of a bounce.
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