Flowering Season For Coffee
Cocoa prices have risen more than 200 points (and gaining 8% in value) over the past week, and did so without much carryover support from one of its key outside markets. Sluggish global risk sentiment could leave the market vulnerable to a swift pullback, but a bullish supply/demand outlook should help cocoa prices find underlying support.
The market continues to have significant bullish supply developments which could hold the market above its 50-day moving average. A more than 1.2% decline in the Brazilian currency weighed on coffee prices as that could encourage Brazil’s farmers to market their remaining near-term supplies. Brazil’s 2021/22 Arabica harvest is wrapping up, so exportable supply should continue to be worked down over the next few months. Flowering season and rains forecasted.
December cotton is probing for some type of short-term peak. The dollar was down for the third straight session yesterday, and this lent underlying support. For the most part, cotton has ignored currency movements over the past week and has focused instead on indications of strong demand and concerns over crops in India, China and to a lesser extent the US.
Since reaching an 8-week low in mid-September, sugar prices have been in a coiling pattern that has kept market from sustaining upside momentum. While there have been bearish supply developments from south Asia over the past few weeks, sugar should continue to find support from lower Brazilian output this season.
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