ADMIS News
COCOA
Cocoa prices were unable to extend their February updraft into new high ground, but they will start this week’s action more than 300 points above their late January lows. While it may see volatile action due to the ebb and flow of global risk sentiment, a bullish supply/demand outlook should keep cocoa well-supported on any near-term pullbacks. For the week, May cocoa finished with a gain of 87 points (up 3.2%) for a second sizable weekly gain in a row.
COFFEE
Coffee’s 2-day/16.00 cent updraft last week lifted prices more than 6.7% in value and to 10-year highs, but may have been “too far, too fast” given the recent volatility in global risk sentiment. Although the market continues to have a bullish longer-term supply/demand outlook, coffee may fall further to the downside before it can find its footing.
COTTON
May cotton closed lower on Friday and near the low end of the consolidation of the previous two weeks. More importantly, the market penetrated and closed below the key uptrend channel support at 123.26 which is seen as a bearish technical development. The US dollar rallied to its highest level since February 3 (and up again this morning), and the stock market broke sharply to end the week (and is down sharply this morning). Neither of these moves are supportive to cotton.
SUGAR
While sugar prices have had trouble sustaining upside momentum over the past few weeks, they continue to hold their ground above their January and February lows. For the week, May sugar finished with a gain of 2 ticks (up 0.1%) which broke a 3-week losing streak. Energy prices rallied sharply due to increasing Ukraine/Russian tensions, and that provided a significant boost to sugar prices as that should strengthen ethanol demand in both Brazil and India. Thailand and India’s sugar production this season remains ahead of last season’s pace, however, and that is pressuring sugar prices.
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