ADMIS News
COCOA
While cocoa’s global demand concerns are far from being soothed, the market has so far been able to avoid any severely negative surprises with critical demand-side data points. With positive tilt to the Asia data overnight, the market may be able to extend a recovery move higher. Sluggish global equity markets and a pullback in the Eurocurrency were sources of carryover pressure, but they were more than offset by critical demand-side news.
COFFEE
For all of the headwinds coming from both the supply and demand sides of the market, coffee prices continue to stay clear of the mid-June contract low. A 1% gain and a new 1-week high in the Brazilian currency provided coffee with underlying support as it eases pressure on their producers to market their near-term supply to foreign customers.
COTTON
December cotton reversed direction yesterday and closed higher for the first time since last Friday. The market was buoyed by a statement from China that it would stick to the Phase 1 trade deal reached earlier in the year. China said it would respond to the “bullying” tactics from Washington separately. US cotton export sales for the week ending July 9 showed net cancellations of 17,455 bales for the current (2019/20) marketing year and net sales of 29,125 for 2020/21 for an overall total of 11,670. This was down from a combined total of 50,460 the previous week and was the lowest combined total since May 28.
SUGAR
With a bearish global supply outlook weighing on prices, sugar will need to see stronger key outside markets in order to hold recent gains. The Brazilian currency regained more than 1% in value and reached a new 1-week high, and that provided early support to sugar prices as it eases the pressure on Center-South mills to produce more sugar at the expense of ethanol. However, that was more than offset by a sizable pullback in energy prices as that is likely to keep Brazilian domestic ethanol demand from seeing tangible improvement during the near future.
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