Will Coming Rains Save Texas crop?
Cocoa prices came under immediate pressure and remained on the defensive during yesterday’s trading session. After the 120 point gain over the previous 4 sessions, cocoa was vulnerable to profit-taking and additional long liquidation in front of critical demand data. After the close, the second quarter North American grindings total came in at 115,899 tons, down 6.29% from a year ago.
Coffee prices have lost some upside momentum following the 4-session winning streak, but are consolidating in close proximity to Wednesday’s 1 1/2 week high. The Brazilian currency has been unable to lift clear of last week’s 5 1/2 month low, and that continues to pressure the coffee market. Multi-decade highs for inflation in many developed economies have diminished restaurant and retail shop consumption, and that has weighed on coffee prices.
December cotton closed lower on Thursday after rain was added to the forecast for west Texas. Export sales improved modestly over the previous week, but they were not very impressive overall. The 6-10-day forecast is still calling for above normal temperatures in west Texas, but rainfall has increased to above normal. This could change the outlook if the crop in Texas survives the recent extreme heat and dryness.
Sugar prices continued to be pressured by key outside markets as it reached a 2-week low. A sharp selloff in crude oil and RBOB gasoline prices weighed on the sugar market as that may weaken ethanol demand in Brazil and India. In addition, a sluggish Brazilian currency continues to be a source of pressure on sugar prices.
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