Tight Consolidation Range in Sugar
Cocoa continues to have trouble sustaining upside momentum as near-term demand concerns remain a front-and-center issue for the market. Since falling back from a 4-year high in late of November 2020, cocoa has consistently found support in this price area and may be closing in on at least a temporary low.
Since reaching a new multi-year high on June 1st, coffee prices have been unable to climb further into new high ground in spite of a bullish supply outlook. The market may be setting up for a near-term pullback, but coffee is likely to see much higher price levels before their second quarter upmove finally runs out of steam.
December cotton traded to its highest level since February 25th and closed at its highest level since February 24 yesterday. Traders will be awaiting two events on Thursday, the weekly USDA Export Sales Report and the monthly WASDE Report. Last week’s export sales report showed net sales of 279,556 bales of cotton old and new crop combined, the highest weekly number since April 1.
In spite of choppy action, sugar prices have held within a relatively tight consolidation range so far this month. An inability to break out to new high ground may set up the market for a near-term pullback, but sugar should find solid support. Expectations that today’s Unica supply report for the second half of May will show Brazil’s Center-South sugar production falling further behind last season’s pace provided the market with early support.
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