ADMIS News
COCOA
Cocoa prices were able to break their 5-session losing streak, and did so with relatively little help from key outside markets. While global risk sentiment remains subdued and near-term demand concerns continues to be a source of pressure, recent bullish supply developments can help cocoa hold support.
COFFEE
After being driven down to 6-month lows on near-term demand concerns, a wave of bullish supply developments resulted in an abrupt turnaround in the coffee market. Updated weather forecasts are calling for unseasonably cold temperatures in several Brazilian Arabica growing regions. With the upcoming 2022/23 Arabica crop already projected to be on the lower end of recent “on-year” crop total, even a relatively small chance of damaging frost conditions has fueled significant short-covering. Colombia’s coffee growers’ federation forecast their nation’s 2022 production would come between 12.0 million to 12.5 million bags due to heavier than normal La Nina rainfall, and that provided an additional source of strength to the coffee market.
COTTON
Old crop July cotton might continue to drift lower as short-term demand factors remain quite negative, and July is still historically high priced. Talk of a sharp drop in consumer apparel purchases, and with a slowdown in housing and with tightening consumer discretionary spending income, spending on cotton related products could drop off significantly. On the other hand, December cotton may be forced to build a more significant weather premium as the West Texas region looks to get hit with historically hot and very dry conditions over the near term.
SUGAR
Sugar prices remain a steady downtrend and pushed down to the lowest level since March 2nd today. A focus towards the Brazilian supply situation and bearish outside market forces are mixed. Although it will still need carryover support from key outside market, sugar may be able to forge a short-term low.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
