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.
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