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Cotton Getting Oversold


Cocoa’s demand concerns remain the front-and-center issue for the market with prices more than 230 points (down 8.7%) below their March high. Although it is receiving little help from global risk sentiment or key outside markets, cocoa may find its footing soon.


Coffee prices have been unable to find their footing over the past week as they continue to be weakened by near-term demand concerns. While demand may remain subdued over the next few weeks, a bullish supply outlook could help the market find a floor.


May cotton broke below its March 10 low yesterday to trade to its lowest level since February 3. The dollar was stronger, with the June Dollar Index trading to its highest level since November 23, and this as viewed as negative for US cotton exports. The trade is also that the renewed lockdowns in Europe due to Covid will hurt cotton sales.


Although carryover support from key outside markets will continue to be a major factor in near-term direction, sugar is also receiving bullish supply/demand developments to provide additional support.

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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