Better Demand Ahead in Cocoa
The market continues to hold its ground above the December and January lows, and the turn higher this morning is a positive development. May cocoa was able to hold its ground above last Friday’s low.
Since a 2-week/20.00 cent updraft in early November, coffee prices have had trouble sustaining upside momentum. While the market has pulled back from a 4-month high in mid-January, coffee has held above its 50-day moving average, and 2 successful retests this month may signal that it will remain well supported on pullbacks.
The lower close and the move to a 4-day low on the same day of a surge higher in the grain markets yesterday seemed to be a bearish development. However, the market experienced a solid recovery overnight and the trend remains up.
Sugar appears to have put in a short-term low with a solid start to the session this morning. If there is a negative turnaround in key outside markets, sugar could see some additional long liquidation.
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