Choppy to Higher Trade in Sugar
The cocoa market has had a positive long-term global demand outlook for most of the year, as prospect of reduced or removed COVID restrictions has been expected to boost chocolate consumption. While the flare-ups of COVID variants have pushed a full reopening further into the future, and demand uncertainty may continue, we should see some improvement through the holidays.
Coffee’s 2-day/15.25 cent updraft has lifted the market well above its recent consolidation zone and up to the highest price levels since October of 2014. With bullish supply developments unlikely to go away anytime soon, coffee is likely to climb further to the upside before this rally runs out of steam.
December cotton closed lower on Friday for the third straight session, but it was still confined to the traded range of the past two weeks. The weekly export sales report was not particularly exciting, but it was not a disaster either. US cotton export sales for the week ending November 4 came in at 127,968 bales for the 2021/22 (current) marketing year and 11,616 for 2022/23, for a total of 139,584.
Sugars upside seems limited by volatile energy prices, but its coiling price pattern has lifted sugar well clear of its mid-October lows. With bullish supply developments in Brazil and India providing underlying support, sugar should extend its recovery move early this week. Energy prices fell back to the downside, which put carryover pressure on the sugar market as that may weaken ethanol demand.
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