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Cocoa Prices Lower

COCOA

Cocoa is clearly benefiting from improved global risk sentiment as that should help to soothe ongoing concern with near-term demand prospects. The market is finding bullish supply-side support as well, however, and that can help cocoa to maintain upside momentum.

COFFEE

While coffee may be near-term overbought and vulnerable to long liquidation, it should remain fairly well supported on a near-term pullback. The hook reversal yesterday is a short-term negative force and a correction may be needed but the trend has turned up. Last week’s positive forward guidance from Starbucks and Nestle helped to strengthen coffee’s near-term demand outlook, and that provided the market with early support.

COTTON

The cotton trade is once again worrying about weather and putting aside concerns about demand, December cotton to its highest level since July 13 yesterday. The 6-10 and 8-14 day forecast is calling for above normal temperatures and below normal precipitation across the central part of the US including most of Texas, Oklahoma and Kansas.

SUGAR

Sugar prices are holding their ground above the recent consolidation zone and posted a second close above the 200-day moving average for the first time since early March. While improving global risk sentiment is working in its favor, sugar still has a bearish global supply outlook that should limit further near-term upside.

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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