ADMIS News
COCOA
Cocoa prices are holding within their June consolidation zone and are benefiting from an improving demand outlook and bullish West African supply news. If global risk sentiment continues to strengthen, cocoa prices should lift further away from their late May lows. Strength in European and US equities as well as a rebound in the British Pound provided carryover support to the cocoa market as that can help to soothe near-term demand concerns in both Europe and North America.
COFFEE
If near-term demand concerns can be soothed, coffee should extend this recovery move further up into new high ground. Major Brazilian growing areas saw below normal rainfall last week, which adds to the weather issues that Brazil’s coffee trees have faced over the past 2 years. Although this season will produce an “on-year” crop, Brazil’s 2022/23 Arabica harvest is behind last season’s pace and the historic average. A rebound in global risk sentiment gave a boost to coffee prices early this week, as that may help to improve out-of-home consumption levels.
COTTON
December cotton closed higher yesterday after trading inside Friday’s range. July cotton closed lower. The dollar was stronger, which may have pressured the nearby contract more, which is more focused on near term demand concerns. West Texas has received rainfall of 1 inch or more over the past week, which may have had a part in improving crop conditions there.
SUGAR
The market remains in a short-term consolidation pattern. While continued strength in energy prices has provided carryover support to the sugar market, both crude oil and RBOB gasoline fell from new highs for the move into negative territory by Monday’s close. This may put pressure on sugar, while a lukewarm Brazilian currency could also weigh on sugar prices.
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