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Negative Tilt For Coffee


With the prospect for improved global demand later this year, cocoa can extend its recovery move towards a retest of its late November high. Strong rallies by European and US equity markets to begin the month of March provided cocoa with carryover support as they should help to further soothe near-term global demand concerns.


After 2 weeks of sharp gains, coffee appears to be consolidating. A positive longer-term demand outlook and bullish supply factors continue to provide support. Steep gains last week and for the month of February continued to leave coffee prices vulnerable to profit-taking in-line with the weakness seen in energy and grain markets.


The market is attempting a quick recovery from the reversal last week but the technical set-up is still bearish and the market seems vulnerable to a more serious downside correction. May cotton closed strong yesterday, recovering a good portion of its steep correction from last Thursday and Friday.


While sugar has a bullish longer-term supply/demand outlook, the market continues to be pressured by weakness in its key outside markets. Until energy prices and the Brazilian currency regain their strength, sugar prices may remain on the defensive.


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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