Written Commentary
COCOA
Cocoa prices have only posted one negative daily result so far during March, and have risen more than 210 points (up 8.6%) above their March 1st low. Expectations that Ivory Coast and Ghana (the world’s top 2 producing nations) will see lower output this season provided the cocoa market with early support, as they account for more than 60% of global production.
COFFEE
Coffee prices have been pressured by bearish near-term demand developments that have put some brakes on this week’s recovery move. The market continues to have a bullish supply outlook, however, so coffee may be closing in on a near-term low. In addition to a pullback in the Brazilian currency, coffee was pressure by concern over near-term demand prospects, particularly in Europe, following the Russian invasion of Ukraine.
COTTON
May cotton is showing positive action early today. The dollar recovered after Wednesday’s steep selloff, and crude oil and the stock market both ended lower yesterday, all of which was negative to cotton. The USDA weekly export sales report was strong for the third week in a row, but that was expected.
SUGAR
Brazil’s Petrobras raised their domestic gasoline prices by 19%, and that provided significant support for the sugar market as that should strengthen Brazilian ethanol demand prospects. Petrobras has kept their prices at comparatively low levels since the Russian invasion of Ukraine began in late February while global energy prices were surging higher.
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