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Drier Weather in Brazil Boosts Sugar


Although it has found fresh carryover support to underpin price, sugar remains highly vulnerable to a wave of long liquidation if support levels are violated. Updated forecasts have dialed back daily rainfall amounts for Brazil’s Center-South cane-growing regions next week, and that gave a boost to sugar prices. Drier than expected conditions are expected to cut back on cane output and sugar production over the rest of the 2020/21 season but keep in mind that April/September Center-South sugar production was over 10 million tonnes ahead of last season’s pace.


March cocoa remains in a short-term uptrend and a close above 2469 will be seen as a positive technical development. A shift in focus towards near-term supply issues has resulted in a sizable recovery move this week.


The outside day and higher close for December coffee is a technical sign that a short-term low may be in place. The market rebounded from a new 3-month low to finish higher yesterday. Reports of additional heavy rainfall over Vietnam’s major coffee-growing areas have increased the chances of flash flooding that could damage coffee trees and delay the upcoming harvest.


The cotton market remains in a short-term uptrend but looks vulnerable to at least a technical correction over the near term. The 1-5 day weather forecast does not show much rain for key growing areas but the 6-10 day outlook calls for above normal precipitation which raises concerns about harvest progress and quality.

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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