ADMIS News
COCOA
While upside follow-through from a positive weekly reversal was not surprising, cocoa’s updraft on Monday has lifted prices 160 points (up more than 7%) above last week’s 11-month low. In addition to a positive longer-term demand outlook, cocoa is finding mild supply-side support which can help maintain this recovery move.
COFFEE
Coffee’s 5-day updraft has lifted prices more than 30% in value and to their highest levels since October 2014, as the damage from last week’s Brazilian cold wave becomes more apparent. While the market appears to be heading for even higher price levels over the next few months, coffee is well into technically overbought territory now and will be increasingly vulnerable to a swift (and sizable) near-term pullback. Updated forecasts over the weekend now call for this week’s cold event to bring frost conditions to key Brazilian Arabica growing regions, and that follows last week’s cold wave and a frost in Parana and Sao Paolo states last month.
COTTON
The cotton market remains in a steady uptrend and managed to hold support. Strong demand for US cotton led by China continues to support the market on minor setbacks. December cotton managed to close just slightly lower on the session yesterday and up 164 points from the early lows as minor support held.
SUGAR
While the negative impact on cane plants will not be as significant as with coffee trees, the sugar market continues to find support from Brazilian weather developments. With key outside markets beginning to regain strength as well, sugar prices look to be heading further up into new high ground.
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