ADMIS News
COCOA FUTURES
While cocoa was unable to avoid a second monthly decline in a row, the market has climbed sharply away from last Wednesday’s low. With bullish developments from the supply and demand fronts, cocoa can extend its recovery move. Indications that this season’s West African production will fall below last season’s output provided the cocoa market with underlying support. Recent above-average rainfall over West African growing areas should benefit late-harvested mid-crop cocoa. However, that rainfall could lead to increased mold for beans that are already harvested and are in the drying process or being stored at farms or co-ops.
COFFEE FUTURES
Coffee prices have posted 4 positive daily results in a row for the first time since early January and are within striking distance of the highest level since late February. Dry weather over Brazil’s major Arabica-growing regions provided coffee with underlying support, as updated forecasts show these conditions will continue through late next week. Brazilian Arabica trees have dealt with dry conditions and frost events over the past 2 years, and that will make it difficult for their 2022/23 Arabica production to come close to recent “on year” crop totals.
COTTON FUTURES
July cotton closed a bit lower on Tuesday after edging below last Friday’s low towards the end of the session. The dollar was higher and the stock market lower, and both forces may have put some pressure on the cotton market. Crude oil was higher, which offered some support. The state-run weather office in India said on Tuesday that this year’s monsoon rains are likely to be average over the central region, where cotton is grown. The 1-5 day forecast calls for moderate to heavy rainfall in Oklahoma and the Texas panhandle and moderate to light rainfall in west Texas.
SUGAR FUTURES
Since their sharp mid-May rally from a 2 1/2 month low, sugar has been unable to put together back-to-back positive daily results. While bearish supply news from Asia has pressured the market, sugar should remain well supported on a near-term pullback. Continued strength in RBOB gasoline and the Brazilian currency provided sugar with early carryover support, but a late pullback in crude oil down into negative territory could weigh on sugar prices. India and Thailand will have sizable increases in their sugar production and sugar exports this season, and that continues to weigh on the sugar market.
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