Explore Special Offers & White Papers from AFS

Coffee Holds Its Ground


Cocoa prices have benefited from several bullish supply issues that have more than offset global demand concerns. After six positive daily results in a row, a new multi-year high and a huge weekly gain, however, cocoa has reached near-term extreme overbought levels and may be vulnerable to a near-term pullback.


After 10 positive daily results over the previous 11 sessions and more than 17.00 cents in gains from an early November low, a negative shift in global risk sentiment after Thursday’s close was the trigger for significant end-of-week long liquidation and profit-taking. Longer-term issues with Central American production, a slow start to Vietnam’s harvest and lower Colombian output should help coffee hold its ground on any near-term pullback.


March cotton broke out of its recent consolidation on Friday and traded to its highest level since April of 2019 this morning. The market is balancing between concerns about expanding coronavirus infections and progress being made on the vaccine front. Keep in mind that the pandemic has led to the clothing and textile pipeline being close to full due to slow sales during the spring and summer. Those garments would likely need to be sold before manufacturers ramp up their demand for cotton.


Sugar’s wild finish to last week’s trading kept the market in close proximity to last Tuesday’s multi-year high, but the market continues to have a very large net spec long position. With the longer-term supply outlook continuing to be bearish, sugar has reached near-term overbought levels and remains vulnerable to a sizable pullback. For the week, however, March sugar finished with a gain of 25 ticks (up 1.7%) which was a ninth positive weekly result over the past 10 weeks.

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from Archer Financial Services

Get Started

Contact Us Today