ADMIS News
COCOA
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.
COFFEE
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.
COTTON
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
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.
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