Explore Special Offers & White Papers from AFS

Bullish Supply Outlook Drives Cocoa Market


Cocoa prices have extended their September updraft further into new high ground as it has found support from both the supply and demand sides of the market. Global risk sentiment and key outside markets are holding a negative tone early this week, however, and that may limit the advance.


As demand shows signs of improvement, coffee can remain in a short-term uptrend. Colombia’s August coffee production came in at 915,000 bags, which was 16% below last year’s total. This shortfall may be due in part to the supply bottlenecks seen earlier this year, and while it is difficult to make year-over-year comparisons due to Colombia not putting out May and June production readings, that also provides further evidence that Colombia’s output is falling below a 14 million bag annualized pace.


The market continues to trade higher in spite of the dollar index jump off of last week’s lows, the stock market break, energy market weakness and metal market weakness. The weekly crop progress report showed 61% of the US cotton crop was rated good/excellent as of September 5, down from 70% the previous week but still above the 10-year average of 45%.


Sugar’s pullback from last week’s high has put the market at the bottom portion of its August/September consolidation zone. Although global risk sentiment and key outside markets have taken a negative shift following the holiday weekend, bullish supply developments can help sugar prices find their footing. Energy prices extended their pullback, which was a source of carryover pressure on the sugar market as that could end up weakening Brazilian domestic ethanol demand prospects.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from Archer Financial Services

Get Started

Contact Us Today