ADMIS News
COCOA
Cocoa prices are unlikely to get fully past near-term demand concerns until Chinese COVID lockdowns and Russia’s invasion of Ukraine are both over. The market continues to find support from bullish supply developments, however, and that can help cocoa to extend a recovery move. While European and US equity markets saw lukewarm results, a mild rebound in the Eurocurrency and British Pound provided carryover support to the cocoa market as that could help to soothe near-term European demand concerns. However, the prospect for lower West African production this year continues to provide cocoa prices with their main source of underlying support.
COFFEE
Coffee prices have risen 21.00 cents over the past 4 sessions. Even if near-term forecasts prove inaccurate, coffee’s South American weather issues should keep the market well above last week’s lows. Updated forecasts have increased the chances for very cold temperature over Brazil’s major Arabica growing regions later this week. Keep in mind that this region has seen drier than normal conditions since mid-2020, while the current La Nina weather event could extend these conditions through the latter part of this year.
COTTON
July cotton closed sharply higher yesterday after breaking out of last week’s range to trade to its highest level since May 5. December cotton gapped higher and traded to new contract highs. There was plenty of outside market support. The dollar was lower and crude oil was higher. New crop corn and soybeans were sharply higher as well, and Chicago, KC and Minneapolis wheat closed limit up. India announced an export ban on wheat following a heat wave that has cut harvest prospects. Traders are wondering if they will ban cotton exports as well.
SUGAR
Sugar’s abrupt turnaround may have been given added fuel by near-term weather issues, but the market has found support from strength in key outside markets as well as bullish supply developments in Brazil. As a result, sugar has been able to overcome recent bearish supply news from India and Thailand. There are now indications that potential frost conditions later this week could reach cane-growing regions in Brazil’s Sao Paolo and Minas Gerais states. While there may only be a small chance that Center-South cane-growing regions have frost damage, sugar already has bullish developments with the current cane crop.
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