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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.

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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