Cotton Lower Post USDA Supply/Demand Update
Cocoa prices were able to put some brakes on their 3-session losing streak, but they remain well below last Wednesday’s 3-month high. With a positive shift in global risk sentiment and a bullish longer-term demand outlook, however, cocoa can turn back up.
Coffee’s abrupt change in fortune was able to break a 6-session losing streak with an out-side-day up. Although near-term European demand may remain an issue well into the second quarter, coffee’s bullish supply outlook for next season can help the market maintain upside momentum.
May cotton closed down the 400-point limit yesterday and closed at its lowest price level since February 5. Limits expand to 500 points today. The monthly USDA supply/demand report was bearish against expectations, but the selloff started early in the session and was already near limit down at the time of its release.
Sugar prices have had a tough time this week with key outside markets remaining under pressure. Although it has a bullish longer-term supply/demand outlook to provide support, sugar may see further downside price action before it can find its footing.
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