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.
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.