Better Support in Cocoa
Cocoa is one among many commodities that have faced demand concerns from the global pandemic as chocolate consumption is tied to economic strength and travel. Developments last week suggest that demand may not be as weak as the market had expected, and that may underpin cocoa prices going forward.
Coffee had a downbeat finish to last week as it saw pre-holiday profit-taking and long liquidation, but the market has now lifted well clear of its early January lows. With market focus shifting from this season’s “on-year” crop to their upcoming 2021/22 “off-year” crop, coffee prices should remain well supported.
The market remains in a steady uptrend but is still under the negative technical influence of the January 13 key reversal. Cotton rallied 1.7% for the week. Outside market forces carry a positive tilt today with strength in the energy markets and gold and weakness in the US dollar.
While sugar lost upside momentum in front of the holiday weekend, it will start this week in close proximity to last Thursday’s 3 1/2 year high. With key outside markets starting to lose their recent strength, sugar may need to receive fresh bullish supply/demand news in order to hold its ground.
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