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Energy Rally May Spark Shift in Sugar


Cocoa’s abrupt change in fortune has taken the market from the verge of a downside breakout to the upper portion of its recent consolidation zone. While near-term demand issues continue to weigh on sentiment, cocoa is in a good position to extend this recovery move.


Coffee has been on the defensive this week with 3 negative daily results in a row. With a bullish supply outlook for the upcoming 2021/22 season, coffee may be able to find its footing before retesting its 200-day moving average.


Traders were surprised that the USDA had raised its estimate of China’s 2020/21 production by 1.5 million bales from the January report to 29.00 million bales. This is what limited the decline in ending stocks to 0.58 million bales despite a 1.48 million-bale increase in usage and this helped to pressure the market yesterday.


While sugar had a bumpy ride yesterday, it continues to find support from bullish supply news, an improving demand outlook and from strength in key outside markets. India’s shipping container shortage has led to tight near-term white sugar supplies.


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