ADMIS News
COCOA
While cocoa continues to be pressured by negative global risk sentiment, the market continues to receive bullish supply/demand developments that have underpinned prices well above the early April lows. If risk appetites can regain a stronger tone, cocoa can extend a recovery move. For the week, however, July cocoa finished with a loss of 38 points (down 1.4%) which broke a 3-week winning streak.
COFFEE
Coffee’s 3-day losing streak has taken prices nearly 14.00 cents (down 5.9%) below last Tuesday’s 6-week high. The market continues to have a bullish supply outlook, however, and that can help coffee prices find their footing before they retest the late March lows. Production issues in Brazil and Colombia due to La Nina provided the coffee market with early support, which were underscored by the US Climate Prediction Center’s monthly update which said that La Nina had a 59% chance to continue through the June-August window. La Nina brings drier than normal conditions to Brazil’s major Arabica-growing regions while it brings heavier than normal rainfall that could increase the chance of flooding in Colombia’s coffee growing regions.
COTTON
There is still no confirmation of the key reversal from an 11 year peak on Wednesday, but with the overbought condition and volatile outside market forces, we can’t rule out a short-term correction. July cotton will need to see selling pressure under 139.34 in order to confirm a short-term peak. News that India will allow duty-free imports in order to offset production shortfalls in the country helped to provide support. There is almost no rain in the five day forecast for West Texas with some chances of less than 1/10 of an inch.
SUGAR
On Wednesday, July sugar experienced a sweeping key reversal from a multi-year high and an extremely overbought level. On Thursday, the market experienced follow-through selling below Wednesday’s low to confirm the key reversal and that should keep sugar on the defensive. For the holiday-shortened week, July sugar finished with a loss of 24 ticks (down 1.2%) which was a third negative weekly result over the past 5 weeks.
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