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Brazil Supply Issues Help Support Sugar


In contrast to many other commodities, cocoa had a fairly modest 2021 price gain as concern over near-term demand continued to shadow the market throughout the year. With better demand prospects and a bullish supply outlook to provide support, cocoa should start out the New Year on an upbeat note. For the week, March cocoa finished with a gain of 47 points (up 1.9%) which was a second positive weekly result over the past 3 weeks. Last season’s record production from Ivory Coast and strong output from Ghana has been a source of headwinds for cocoa as well.


While the threat of year-end profit-taking and additional long liquidation may have passed, coffee prices remains vulnerable this week due to the annual commodity index fund rebalance. With near-term demand concerns easing while the supply outlook remains firmly bullish, coffee should remain relatively well support on near-term pullbacks.


March cotton closed lower on Friday after the market failed to follow through on Thursday’s rally to its highest level since November 24. The market is showing solid gains early today and has been following the stock market.


Sugar prices have been unable to lift decisively clear of their early December lows, but they have held their ground above the 200-day moving average over the past few weeks. With a positive turnaround in key outside markets and expectations of a second global supply deficit in as many seasons, sugar may start out the new trading year with a rally. For the week, March sugar finished with a loss of 26 ticks (down 1.9%) which was a second negative weekly result over the past 3 weeks.

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