Written Commentary
COCOA
Cocoa will continue to have questions over the near-term demand outlook, particularly with Europe where there has been a flare-up of new COVID cases. There is a growing consensus that global demand will improve as vaccines receive wider distribution, however, and that should help to underpin cocoa prices. The pace of US COVID vaccines has increased in recent weeks, and that may bring forward the time when North American chocolate consumption returns to pre-pandemic levels.
COFFEE
Coffee still has work to do in order to repair the chart damage sustained over the past 2 weeks, but the market continues to hold its ground above its 3 major moving averages.
COTTON
May cotton appears to have posted a short-term low and is in position to turn up and test the February highs. Some traders remarked that the 13% drop in prices since the February 25 high ought to help attract more buyers. The dollar was lower as well, which makes US cotton more attractive on the world market.
SUGAR
While sugar remains well below its late February highs, it was able to put some brakes on its recent downdraft. If key outside markets remain strong, sugar can recover. The Brazilian currency extended its rebound and is more than 3.5% above Tuesday’s 9 1/2 month low, and that eases pressure on Brazil’s Center-South mills to produce more sugar for export.
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