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.
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