Bearish USDA Report For Cotton
The very bullish vaccine news for global demand for 2021 was offset by the bearish USDA Crop Production and Supply/Demand report. December cotton closed slightly lower after the report, but inside the previous day’s range as the market reacted in a limited manner to the news. US cotton production came in at 17.09 million bales, an increase from the previous month’s number and above the upper end of expectations that ranged from 15.90 to 17.00 million.
Cocoa’s recovery move ran out of near-term steam as the market has been unable to fully shake global fourth quarter demand concerns. With near-term supply anxiety still fairly high, however, cocoa should remain well supported on any near-term pullback. While European equity markets continued to gain ground, US stock markets and the Eurocurrency saw near-term pullbacks that put carryover pressure on cocoa as they may weaken near-term demand prospects in both regions.
Coffee has seen volatile price action already this week, but it has been able to extend its winning streak to 4 sessions. While European demand will remain a sore spot for the next few weeks, coffee will find supply-side support that will help to underpin prices.
Sugar’s recent coiling price has kept the market in close proximity to last week’s 8-month high. However, the inability to reach new high ground during a “risk on” mood in global markets may be more evidence that sugar is top-heavy at current price levels. March sugar continued on a roller-coaster ride as it was unable to benefit from significant strength in a key outside market.
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