Sugar Prices Steady
Cocoa prices have benefited from improving global risk sentiment and bullish supply/demand news as they were able to climb above their 200-day moving average for the first time since late October. While global demand concerns have not been fully resolved yet, cocoa should still be able to extend this recovery move.
While global demand concerns are likely to continue well into next year, this week’s early developments could lead to significant improvement in restaurant and retail shop consumption. As market focus shifts from Brazil’s 2020/21 “on-year” crop to their upcoming 2021/22 “off-year” crop, coffee is in a good position to extend this current recovery move.
December cotton closed sharply higher yesterday ahead of the USDA report today which could dictate near-term direction. The market was buoyed by an announcement by Pfizer that vaccine is more than 90% effective in preventing COVID-19 and that intends to seek emergency use authorization by the end of the month.
Sugar prices remain in close proximity to 2 1/2 year highs and have traded at or above the 15.00 cent level in 5 of the past 10 sessions. They have not closed above that price level during this current upmove, which may be some evidence that the market is fairly close to a near-term top. Huge gains in the energy markets provided sugar with early carryover support as that may help to improve Brazilian domestic ethanol demand.