Positive Coffee Supply, Uncertain Demand
Demand concerns remain a front-and-center concern for the cocoa market which has lost over 9% in value (down 242 points) over the past 5 sessions. As prices are now within striking distance of a new 2021 low, cocoa needs to see a significant rebound in global risk sentiment in order to turn back to the upside.
Coffee prices were able to avoid significant downside follow-through and consolidated yesterday. While the market has bullish supply factors to provide underlying support, coffee’s near-term demand issues could push prices further to the downside before they find their footing. A moderate pullback in the Brazilian currency weighed on the coffee market as an extended period of weakness could encourage
March cotton gapped lower yesterday and closed limit down as the market continued to worry that the new Omicron variant of the coronavirus would hurt consumption. Comments by the Moderna CEO raising concerns about the efficacy of their vaccine against the variant sparked heavy selling in equities and commodities.
Sugar’s post-holiday selloff has resulted in prices losing more than 6.5% of their value in just 3 trading sessions. While the market has bullish supply factors to provide underlying support, sugar needs to see significant improvement in global risk sentiment and in key outside markets before it can sustain a recovery move.
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