Coffee prices have a bullish supply outlook to provide support, but they continue to be pressured by near-term demand concerns and from key outside markets. The market continues to hold its ground above its March lows.
After a mildly positive finish to last week’s trading, cocoa prices have fallen back on the defensive as they continue to be pressured by near-term demand concerns. Although the market has fallen back towards bargain price levels, cocoa needs to see more bullish demand-side developments in order to turn back to the upside.
The cotton market managed to close slightly higher yesterday, but more importantly managed to consolidate the strong gains made on Friday. Given the bullish demand outlook as the global economy improves in the months just ahead, the extremely strong cumulative export sales pace for US cotton and the need for cotton to compete with corn and soybeans for planted area, look for more of a recovery bounce over the near term.
Sugar continues to be pressured by key outside markets, and have had bearish supply developing from its top-producing nation fueling long liquidation going into the end of the month and quarter. While developments after Monday’s close may not turn the market back towards the upside, they can put some brakes on sugar’s February/March pullback.
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