ADMIS News
COCOA
After a lukewarm start to the week, cocoa prices have regained upside momentum and are back to within striking distance of a new high for the move. With global risk sentiment remaining volatile, cocoa remains vulnerable to a pullback. A recent shift towards wetter weather over West African growing areas has pressured the cocoa market as that may improve the outlook for the region’s upcoming mid-crop production. A rally in the Eurocurrency and British Pound provided carryover support to cocoa prices and helped to lift them back into positive territory late in the day. Hershey will report their quarter earnings and guidance early in today’s session while Mondelez will report their earnings and guidance after today’s close, both of which will provide a gauge on the North American demand outlook.
COFFEE
Coffee’s choppy price action so far this week has kept the market above its 3 major moving averages. A pullback in London Robusta coffee from multi-year price highs put limited carryover pressure on the New York Arabica market. ICE exchange coffee stocks remain on-track for a third monthly decline in a row after being unchanged for the second time in 3 sessions on Wednesday. This gave a boost to coffee prices as it indicates that near-term supplies are not building up as demand is continuing to improve.
COTTON
July Cotton closed moderately lower yesterday after spending the session inside Tuesday’s big range down. Declines in crude oil, the stock market, and commodities in general pressured the market. The dollar was weaker after making a new low for the move, which should be supportive to export commodities like cotton. The June Dollar Index is approaching the April 14 low at 100.42, and a move below there would take the nearby contract to its lowest level in over a year. Perhaps that could improve traders’ outlook regarding US exports. Traders will be hoping for an improvement in the weekly USDA Export Sales report on Thursday.
SUGAR
Sugar prices made their fifth negative key reversal over the past three weeks on Wednesday. With critical supply data during today’s action, the sugar market could see significant downside follow-through. A sharp selloff in energy prices was a source of pressure on sugar prices as that is likely to weaken near-term ethanol demand. Expectations that Brazil’s Center-South sugar production will increase this season have pressured the sugar market this week. The latest Unica Center-South supply report will be released at midsession, with expectations that their cane crush during the first half of April will be several times the size of last year’s crushing total.
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