Improving Economic News Lifts Cotton
Cocoa finished last week’s trading under pressure from profit-taking and additional long liquidation. Although global risk sentiment remains subdued, cocoa has a bullish longer-term demand outlook that can help prices. For the week, May cocoa finished with a loss of 58 points (down 2.2%) which broke a 2-week winning streak and was a negative weekly reversal from Wednesday’s 3-month high.
Coffee has found support since the start of this year from the prospect of a sharply lower 2021/22 Brazilian crop, and from the likelihood that global demand should improve.
May cotton closed higher on Friday after first plunging to its lowest level since February 8. The dollar was up sharply for the second session in a row, reaching its highest level since November 24, and this may have pressured cotton prices early. The stock market was up sharply however, and that may have lent support.
While sugar was unable to see a positive weekly reversal, its 2-day recovery move has taken prices well clear of last Thursday’s low. With a key outside market changing next season’s supply outlook, sugar can sustain upside momentum.
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