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Short-Term Trend Down For Sugar


Cocoa prices were unable to extend their winning streak to a seventh session in a row, but they will start today’s action 190 points above their late January lows. Although there have been some bearish supply-side developments, the longer-term supply/demand outlook remains bullish which can help cocoa to regain upside momentum.


Coffee prices have continued their coiling price action into the month of February as they have had trouble climbing above and beyond the mid-January highs. The market continues to receive bullish supply/demand news, however, and that should help coffee to remain well supported on near-term pullbacks. A more than 1.2% rebound in the Brazilian currency provided coffee with carryover support.


May cotton is still operating under the negative influence of the key reversal from February 4. A move below 121.59 today or 122.15 tomorrow would penetrate the steep uptrend channel, and could spark significant technical selling. Technical indicators are extremely overbought and the market looks vulnerable to at least a corrective break. The market closed lower yesterday as the market continued to consolidate its latest move to new contract highs last week.


The sugar market remains in a steady downtrend and is now in close proximity to 6-month lows. With its key outside markets continuing to show strength, sugar should remain well supported on further weakness. A more than 1% rebound in the Brazilian currency gave a boost to sugar prices as that may ease pressure on Center-South mills to produce sugar for export.

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