ADMIS News
COCOA FUTURES
Cocoa prices have only had back-to-back positive daily results one time so far this month (May 13th and 16th) as near-term demand concerns have made it difficult to sustain upside momentum. Bullish supply factors have failed to offset a serious threat to demand. A negative shift in global risk sentiment combined with a pullback in European and US equity markets put pressure on cocoa prices as that continues to erode the market’s near-term demand prospects.
COFFEE FUTURES
Coffee prices have been unable to find their footing as major Brazilian Arabica growing regions came through last week’s cold weather event with very little frost damage. The market continues to have bullish supply developments from Brazil and Colombia that have provided support. The Brazilian currency fell back from a 4 1/2 week high into negative territory, and that weighed on coffee prices as that may encourage Brazil’s farmers to market their remaining near-term coffee supplies as the new harvest reaches full speed. Slumping equity markets in Europe and the US put carryover pressure on coffee prices as that may diminish out-of-home consumption in both regions.
COTTON FUTURES
July cotton closed lower yesterday after spending the session near the bottom of Monday’s range. The market traded below Monday’s low but did not sell off sharply. Instead, it just closed a gap from the open on April 27. The dollar was lower again, which should have lent some support to cotton. However, this was offset by a drop in the stock market.
SUGAR FUTURES
Sugar’s choppy price action has been unable to build onto its mid-May rally, but the market continues to find support from recent bullish supply developments. With a fresh update on Brazil’s production situation expected during today’s action, sugar may be able to climb further to the upside. Crude oil and RBOB gasoline had sizable early losses that put carryover pressure on the sugar market, as that may erode near-term ethanol demand prospects. There are reports that India will limit their sugar exports this season to 10 million tonnes.
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