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Sluggish Demand for Coffee


Coffee prices are more than 30.00 cents below their early September highs (down 22.5%) as the market has priced-in a near-record Brazilian 2020/21 crop and sizable Brazilian 2020/21 exports. With a negative shift in demand starting to develop again, coffee is likely to remain on the defensive.


Cocoa continues to face concern with global demand prospects for the fourth quarter that have more than offset carryover support from its key outside markets. With fresh bullish supply developments providing support, however, cocoa should be able to hold its ground above last week’s lows.


The lower close for December cotton after trading up to the highest level since January 23rd is a bearish technical development and might spark some profit-taking selling. Slow stochastic readings are near 84 and 88 with relative strength at 87, and this points to an extreme overbought condition.


Sugar prices remain on-track for their sixth monthly gain in a row, but are starting to look top-heavy as they approach the 2020 highs from mid-February. Unless they are able to find fresh supply/demand support, sugar could see a long liquidation correction.

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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