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Smaller “On-Year” Crop to Support Coffee


After falling more than 200 points (down 7.7%) from last Thursday’s 3-month high, cocoa prices appear to have found their footing. While stronger global risk sentiment may be needed to sustain a recovery move, a bullish supply/demand outlook can help the cocoa market hold its ground. Forecasts for Ivory Coast and Ghana (who combined account for more than half of global output) to have their 2021/22 production come in below last season provided cocoa with underlying support.


Coffee prices continue to see consolidation but the market has lifted well clear of the early January low in spite of negative global risk sentiment. With the longer-term supply outlook remaining bullish, coffee can extend this recovery move. Ongoing production issues in Brazil and Colombia have continued to underpin coffee prices early this year, as those 2 nations combined account for more than half of the world’s total Arabica output.


March cotton closed moderately higher yesterday after spending the session inside of Wednesday’s wide range down. Outside market forces were mixed. The dollar ended up near unchanged after trading higher earlier in the session.


While sugar prices are on a 4-session losing streak, they continue to find support just above the December lows. If key outside markets continue to regain strength, sugar can regain upside momentum. Thailand’s 2021/22 sugar production is expected to have a sizable increase from the previous 2 seasons, and that weighed on prices early this year as most of Thailand’s sugar output heads into the global export market.

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