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Bounce Back in Sugar


While cocoa prices have lost more than 4.5% in value already this week, the market is showing signs that it is approaching a near-term floor. Poor early sales of Ivory Coast cocoa this season due to implementation of their $400 per tonne Living Income Differential (LID) has weighed on cocoa prices this week.


Coffee prices appear to have found their footing. If there more positive developments on the demand front, coffee may be able to sustain upside momentum. While it remains in close proximity to Tuesday’s 4-month high, a pullback in the Brazilian currency applied early pressure to coffee prices.


Cotton is acting like a market that does not want to go higher. Its recent move to an 18-month high was met with divergences with volume, open interest, and traditional momentum indicators, which is action that often suggests a market putting in a top.


March sugar was able to bounce back from a 3 1/2 week low yesterday to finish with a modest gain. A pullback in the Brazilian currency put pressure on sugar early in the day as it encourages Brazil’s mills to produce more sugar for the global export marketplace.

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.

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