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Cocoa Demand Concerns Remain


While the market has received supportive comments from Hershey and Barry Callebaut over the past week, global demand remains a concern for cocoa during the fourth quarter. The market remains on-track for a positive weekly result due to near-term West African supply anxiety, but cocoa may need to see a rebound in global risk sentiment to see a continued uptrend.


With near-term supply issues providing support, the short-term trend should remain up. Weather issues from upcoming crops in Central America and Vietnam remain a major source of strength for the market as they are causing delays with harvesting, and may also result in damage to coffee trees. Vietnam’s October coffee exports came in 8.4% below September’s total.


March cotton is still operating under the negative technical influence of the sweeping reversal from October 28th. The bounce and consolidation after the November 2nd low would appear to be a bear flag formation, and a close under 70.16 will leave 67.66 as next downside target.


Sugar appears to have made a third recovery move from the lows of its October/November consolidation zone during the past three weeks, and has done so with subdued global risk sentiment and without much carryover support from its key outside markets.

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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