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Steep Downtrend For Coffee Prices


The market remains in a steep downtrend off of the early September high. After falling over 25.00 cents (down 19.1%) over the past 14 sessions, coffee is approaching price levels seen in June and July at a time when global demand was on the mend and Brazil had already reached “peak supply”.


The cocoa market will have to clear 2 major demand hurdles over the next month, third quarter grindings totals from the 3 major regions and the Halloween holiday at the end of October. While the market has started the fourth quarter on the defensive, cocoa is receiving bullish near-term supply news that can help prices find their footing.


The market remains in a choppy and consolidation trading pattern in the last few weeks. Demand remains strong and the traders believe there was some damage done by the storms. The US dollar fell to its lowest level in more than a week, which lent underlying support for cotton.


With a sizable net spec long position and a bearish global supply outlook, sugar remains vulnerable to significant long liquidation. March sugar found early support and rallied up to match a 6 1/2 month high before finishing with a moderate gain.

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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