ADMIS News
COCOA
With a bullish shift in supply-side expectations, cocoa may be heading above and beyond the mid-January highs. Ongoing hot and dry weather over West African growing areas remains a source of strength for cocoa prices as some regions have not seen rainfall for several weeks. The West African “dry” season normally lasts through March, but daily high temperatures forecast to 100 degrees Fahrenheit through the middle of next will be unusually harsh conditions for the region.
COFFEE
Coffee prices were able to maintain upside momentum in spite of bearish near-term supply news. With the market continuing to see tightening warehouse stocks, coffee may be poised for a continued advance. Global shipping container shortages have obstructed the flow of exports from major coffee-producing nations which continues to underpin coffee prices early this year. ICE exchange coffee stocks fell by 53,502 bags on Wednesday which is the second massive single-day stocks decline this week.
COTTON
March cotton closed lower yesterday following Tuesday’s key reversal. It was an inside day so it will take selling pressure under 124.60 to help confirm the key reversal. Outside market forces were supportive, with the dollar down and the equity markets higher, but this was not enough to push cotton higher. The cotton market may have gotten overdone after making new contract highs for three sessions in a row.
SUGAR
Forecasts for rainfall over Brazil’s Center-South cane growing regions were a catalyst for sugar’s negative turnaround as that should benefit their upcoming 2022/23 cane crop. Harvesting and crushing in the Central-South region will not reach full speed again until late April as some analysts have forecast a late start to the 2022/23 season.
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