Weak Demand in Coffee
With global demand remaining a concern following the Halloween holiday, cocoa was among several commodities that saw notable pre-election long liquidation. The market is approaching price levels last seen during its July consolidation zone with an uptick in supply-side concerns, so cocoa is approaching “bargain” territory going into today’s US election.
Coffee is on a 4-session losing streak and reached a new 15-week low, but the market is slowing its descent as it approaches the 2020 lows from June. While demand will be problematic over the next month or so, coffee is closing in on “bargain” price territory. Reports of new COVID-19 shutdowns in several European nations remain a notable source of pressure on the coffee market as Europe had been a relative strong spot for demand during the second and third quarter.
In spite of a more positive tilt in outside market forces, December cotton closed lower for the fifth session in a row yesterday and the selling pushed the market down to the lowest level since October 12th. The stock market managed to close higher for the first time in over a week after it failed to take out last week’s lows, and this may have calmed some cotton traders’ fears about demand and Covid.
While the market found carryover support from key outside markets that should extend into today’s action. March sugar started the month of November by following through on last Friday’s late recovery to finish Monday’s trading session with a sizable gain. Crude oil and RBOB gasoline both saw outside-day higher sessions from 5-month lows and finished Monday with sizable gains, and that was a notable source of carryover support for the sugar market as that should help to strengthen Brazil’s domestic ethanol demand outlook.
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