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Three Day Surge in Cocoa

COCOA

Cocoa prices have risen more than 220 points over the past 4 sessions and are above their 3 major moving averages for the first time since late September. This has led to the market becoming near-term overbought and while recent supply/demand developments should lead to higher prices levels over the near future, cocoa may be vulnerable to a near-term pullback.

COFFEE

Coffee’s November rally has been fueled by bullish developments from both the supply and demand sides of the market. With prices 16.00 cents above their October month-end close, however, the market has reached near-term overbought levels and may be vulnerable to a near-term pullback. Tropical Storm Iota has caused heavy rainfall and flooding over several major Central American Arabica producers, and that has provided significant support.

COTTON

The highest close for March cotton since October 27 is a positive technical development. It was an inside trading session yesterday, but the market has managed to rally during the period of increased harvest activity in the US, and fears of sluggish short-term demand. The market has been consolidating for the past two days after Monday’s encouraging vaccine news sparked a rally in the stock market and in cotton.

SUGAR

Sugar prices continue to hold their ground near multi-year highs as the market continues to benefit from bullish near-term supply news. Over the longer-term, however, the sugar market may be better supplied than what is being priced-in at current levels. Indications of lower production in Thailand and the EU continue to support prices this week, with Thailand’s exports likely to remain near multi-year low levels.

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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