Hopes of Stronger Demand in 2021 For Cocoa
With weekend developments potentially adding further support, cocoa may find support soon. For the week, March cocoa finished with a sizable loss of 112 points (down 4.0%) which broke a 4-week winning streak. Global equity markets were able to regain their strength going into the weekend, and that provided cocoa with carryover support as that may provide some relief from near-term demand concerns.
Bullish near-term supply developments and an improved demand outlook for next year may help coffee find short-term support. For the week, March coffee finished with a loss of 6.65 cents (down 5.4%). A wet weather pattern has formed over Brazil’s major Arabica growing regions as there is daily rainfall in the forecast through the early part of next week, and that weighed on coffee prices as it should benefit their upcoming 2021/22 crop.
March cotton closed moderately higher on Friday, ending a two-day losing streak and this left the market down 167 points or 2.3% for the week. Reports of progress towards stimulus legislation added an optimistic tone to the market after a week of worrisome news about infection rates.
In spite of recent strength in its key outside markets, sugar prices have been unable to overcome sizable production increases from Brazil and India this season. Unless the market can find additional bullish supply/demand developments, sugar will remain vulnerable to additional long liquidation.
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