ADMIS News
COCOA
Cocoa prices remain well supported early this week as they have benefited from a bullish supply outlook. Global risk sentiment continues to deteriorate which may weigh on near-term demand prospects, but the cocoa market should find its footing well before the March lows. The negative tone to global risk sentiment fueled sizable losses in European and US equity markets as well as new 1-year lows in the Eurocurrency and British Pound, all of which put carryover pressure on cocoa prices.
COFFEE
Coffee is still probing for a short-term low near the bottom end of the February/March down move. Although negative global risk sentiment will weigh on near-term demand prospects, coffee prices should still be fairly well supported. A bullish supply outlook for Brazil and Colombia provide coffee with support, as those two nations account for more than half of global Arabica production. The US Climate Prediction Center has forecast a 77% likelihood that the current La Nina event will continue through the March-May timeframe, and that could bring weather issues to upcoming Brazilian and Colombian coffee production.
COTTON
May cotton managed to close moderately higher yesterday after earlier trading to its lowest price level since January 14. The market fell under pressure early from a sharply higher dollar, with the March Dollar Index trading to a new contract high, which was also the highest level for the nearby contract since May 2020.
SUGAR
After rising more than 13% in value in less than 6 sessions, sugar’s updraft ran out of steam when key outside markets lost strength. Although it should see a bullish shift in the global demand outlook, sugar may be vulnerable to downside follow-through selling. May sugar turned down from a 15-week high. Massive initial gains in energy prices provided the sugar market with support as that should further strengthen ethanol demand in Brazil and India.
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