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More Selling in Cotton


Cocoa’s demand outlook remains positive on a longer-term basis as the eventual reopening of global economies should result in an uptick in chocolate consumption. While North America and Asia are approaching that point, Europe continues to have setbacks that have kept the cocoa market on the defensive going into this week’s action.


Coffee’s downturn late last week was fueled in part by near-term European demand concerns. For the week, May coffee finished with a loss of 4.00 cents (down 3.0%) which was a second negative weekly result over the past 3 weeks.


May cotton closed lower for the second session in a row on Friday after trading to its lowest level since March 10. Traders were concerned that the combative meeting between the US Secretary of State and high-level leaders from China on Thursday did not bode well for US-China trade relations. China has been the biggest buyer of US cotton this year, and this has been a key factor in the cotton market’s strength.


Sugar prices finished last week on the defensive with pressure from the pullback in energy prices. Until crude oil and RBOB find their footing, sugar could attract more selling. For the week, May sugar finished with a loss of 37 ticks (down 2.2%) which was a fourth negative weekly result in a row.

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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