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Dry Forecast Should Boost Cotton Progress


While cocoa prices had a rough time last week, they did receive evidence that global demand is on the mend in spite of the shipping container shortage. The market may have a long way to go in order to repair October’s chart damage, but cocoa is starting to benefit from a potential bullish shift in this season’s West African production outlook.


Coffee prices have fallen a little over 14 cents below last Wednesday’s 2 1/2 month high, which is roughly in-line with the previous pullbacks during coffee’s August/October recovery move. The market continues to have a bullish longer-term supply/demand outlook that can help coffee prices find their footing before retesting the early October lows.


December cotton closed slightly lower on Monday after trading in a wide range. The 5-day forecast is very dry which should boost progress. The weekly crop progress report showed the cotton harvest continue to run behind the average pace. As of Sunday, 28% of the US crop had been harvested, up from 20% the previous week but behind the 33% from this time last year and the 10-year average pace of 31%.


Sugar prices have fallen below their September/October consolidation zone as a negative shift in key outside markets combined with a bearish near-term shift in weather has helped to pressure. While there may be downside follow-through during today’s trading, sugar’s bullish longer-term supply/demand should have the market close to finding its footing.

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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