Choppy Trade in Cotton
The market remains in a choppy consolidation pattern as traders await news which might significantly alter the current estimates for hefty ending stocks in the US. Cotton ended higher for the fourth straight month and for the second straight quarter.
Cocoa continues to face headwinds from global demand concerns, particularly with the Halloween holiday now just a month away. Coronavirus restrictions are pointing to subdued and restricted Halloween celebrations and trick-or-treating in many regions, while a pullback in the Eurocurrency put further pressure on cocoa prices as extended weakness for that currency could make it more difficult for Euro zone grinders to acquire near-term supplies.
Near-term Brazilian supply will remain a source of pressure, but coffee continues to see positive demand developments that can help the market find some support. Improving global demand continues to underpin coffee prices as ICE exchange coffee stocks fell by 539 bags on Wednesday to finish September at 1.099 million. This is the lowest month-end total since January of 2000 and a seventeenth monthly decline over the past 18 months.
Sugar prices have had a volatile finish to the third quarter but are back to within striking distance of a new 5 1/2 month high. While there have been some recent bullish developments, the overall 2020/21 global supply outlook still remains bearish which should limit sugar’s upside.
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