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Huge Monthly Gain in Cocoa


March Cocoa has a 461 point monthly gain going into the final trading session of November, and remains vulnerable to long liquidation. For the week, March cocoa finished with a gain of 54 points (up 2.0%) and a fourth positive weekly result in a row. Improving global risk sentiment, stronger global equity markets and positive early Black Friday sales reports provided early strength to cocoa prices as they help to soothe fourth quarter demand concerns.


If global demand prospects continue to mend, coffee is in a good position to extend this recovery rally. For the week, March coffee finished with a gain of 6.15 cents (up 5.2%) and a fourth positive weekly result in a row. While there were already widespread expectations that Brazil’s upcoming “off-year” crop will decline from this season’s total, the Volcafe trade house forecast Brazil’s 2021/22 production will drop 33% from 2020/21 levels.


March cotton closed higher on Friday but safely inside the week’s range. It did manage to close higher for the second week in a row, and it was the highest weekly closed for the nearby contract since April 2019. The trade reacted positively to the weekly export sales report which showed US cotton export sales for the week ending November 19 coming in at 354,689 bales for the 2020/21 (current) marketing year and 38,480 for 2021/22 for a total of 393,169.


Sugar was able to find its footing after the holiday break, but an inability to sustain an early recovery move on Friday has left the market well below its mid-November highs. The market remains vulnerable to additional long liquidation early this week.

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.

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