Coffee Uptrend Intact on Tightening Supply
In spite of stronger key outside markets, cocoa prices continue to slide further to the downside. While the market is well into “bargain” price territory given a bullish longer-term demand outlook, cocoa may remain on the defensive.
Coffee prices have been able to find their footing and regain mild upside momentum this week. With bullish developments on the supply and demand sides of the market, coffee may be heading for a retest of last week’s 2 1/2 month high.
December cotton rallied sharply yesterday and traded to its highest level since October 15. It also closed at its highest level since October 7, which was one day before the market put in its most recent contract high.
While the market remains well below its September/October consolidation, sugar prices may be in position to find support soon. In addition to a positive shift in key outside markets, sugar has bullish supply developments that can help the market find a short-term floor.
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