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Impressive Upside Breakout in Cotton


Cocoa prices were unable to complete a positive weekly reversal, but they will start this week more than 80 points above Thursday’s 2 1/2 month low. While near-term demand remains a concern, cocoa has bullish supply developments that can help to underpin prices.


While coffee was unable to complete a positive weekly reversal, it will start this week’s action nearly 10.00 cents above last Tuesday’s 4-month low. Although the market continues to receive bearish news from rising warehouse supply, coffee has a bullish supply outlook that can fuel a recovery move.


The market experienced an impressive upside breakout to new contract highs on Friday as commercial buyers were active and the market is up again this morning. May cotton even managed to trade limit up as strong mill buying was noted. Export sales have remained very strong over the past month even with the relatively high price, and this helped to support strong buying. There is a little decent rain in the Panhandle, but only about 1/4 of an inch near Lubbock, Texas and the rest of West Texas for the 1-5 day forecast.


Sugar prices will start this week in a near-term consolidation zone well below their early March highs, but they finished last week’s trading on an upbeat note. Sugar should start to benefit from a bullish production shift over the next few months and from higher energy prices.

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