Cotton Gap And Go
Cocoa prices remain in close proximity to Monday’s multi-year high, but they appear to have lost the strong upside momentum seen during the previous 3 sessions. The market may be vulnerable to a near-term pullback, but cocoa has further upside left to go before this longer-term rally runs completely out of steam. December cocoa had and a sixth positive daily result in a row yesterday.
While the longer-term outlook remains bullish, near-term bearish supply news has put the coffee market back on the defensive this week. Colombia’s September coffee production came in at 1.209 million bags, which was a 32% increase from August and 22% above last year’s total.
December cotton closed limit up yesterday and the market gapped higher this morning. The nearby contract has traded to its highest level since September 2011. Traders cited ongoing concerns over global supply, particularly after a cyclone brought potentially damaging rains to India recently. Crops in the southeastern US could also be vulnerable in the next week or so, as those areas are expected to see quite a bit of rain right into harvest.
Sugar prices have gyrated between both ends of a 1.10 cent trading range over the past month as the market may be setting up for a breakout move. With a bullish supply outlook providing support, sugar could see a sharp upside move.
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