ADMIS News
COCOA
Cocoa’s abrupt turnaround late last week is a positive technical development. September cocoa was able to break out of its recent consolidation zone. For the week, September cocoa finished with a gain of 1 point, but that was just enough to complete a positive weekly reversal from Wednesday’s 19-month low. A mild rebound in Euro zone and US equity markets provided cocoa with carryover support as that may help to soothe demand concerns in both regions.
COFFEE
Coffee will begin this week well clear of last Monday’s 3-week low. With global risk sentiment on the mend, coffee should remain well supported. For the week, September coffee finished with a loss of 1.40 cents (down 0.6%) which was a second negative weekly result in a row. Friday’s 1.5% decline in the Brazilian currency was a significant source of pressure on coffee prices, and it continued to see downside follow-through on Monday as it reached a 5 1/2 week low.
COTTON
With a shift in the weather pattern and a bearish tilt to demand, the market looks vulnerable to more selling. A hot and dry forecast across the nation’s midsection could threaten the US cotton crop, but prices are already high, and traders are concerned that surging interest rates will lower consumption and perhaps spark a recession. However, the 6-10 day forecast calls for below normal temperatures and above normal precipitation for West Texas. After a slow start, India’s monsoon has revived, which bodes well for crops, including cotton.
SUGAR
Sugar prices have been unable to lift clear of their second quarter lows as they have weighed down by the recent negative tone of global risk sentiment and key outside markets. There have been bullish supply developments which kept the market from falling below its May lows, and that may set up sugar prices to have a near-term bounce. For the week, October sugar finished with a loss of 34 ticks (down 1.7%) which was a fourth negative weekly result in a row. A report that a Brazilian energy firm approved an increase for their gasoline and diesel prices gave an early boost to the sugar market as that should help to strengthen that nation’s ethanol demand. A huge selloff in crude oil and RBOB gasoline weighed on sugar prices late on Friday day as that could diminish the near-term global ethanol demand outlook.
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