ADMIS News
COCOA
With the negative impact of high inflation on demand, it was little surprise that many traders exited their long cocoa positions in front of the FOMC meeting results. While demand concerns have not been fully extinguished, developments both during and after Wednesday’s trading could help to underpin cocoa prices going forward.
COFFEE
Coffee prices have been able to climb above last week’s high and are back to within striking distance of their 3 major moving averages. With global risk sentiment on the mend, coffee should be able to extend its recovery move. Drier than normal weather across Brazil’s major Arabica growing areas continues to be a source of strength for coffee prices this week, as those conditions should reduce their upcoming 2023/24 “off-year” crop. This season’s harvest has been slower than normal, due in part to labor shortages and to slow maturation of coffee cherries.
COTTON
December cotton closed moderately higher yesterday after trading to its highest level since July 5. The dollar was lower and crude oil and the stock market were higher, all of which should be supportive to cotton. The 6-10 and 8-14 day forecasts for west Texas call for much above normal temperatures and a mix of normal to below normal precipitation across the region. This could make the cotton crops condition even more dire during the next two weeks, especially if rainfall is light.
SUGAR
Sugar prices have remained under pressure as they are digesting bearish supply developments from Brazil, but they have been able to slow their descent this week. Events after Wednesday’s close may help sugar to rally. October sugar reached an 11 1/2 month low. The Brazilian trade group Unica said that their nation’s Center-South sugar production during the first half of July came in at 2.976 million tonnes, which was fractionally below last year’s total but higher than trade forecasts.
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