ADMIS News
COCOA
After a 3-session/161 point downdraft, cocoa prices have found their footing before retested the early March low. If global risk sentiment continues to mend, cocoa should be able to extend a recovery move. A positive shift in global risk sentiment fueled recovery moves in European and US equity markets, both of which provided carryover support.
COFFEE
Coffee’s abrupt turnaround may not be surprising given the market’s bullish supply outlook combined with a nearly 50 cent decline (nearly 19% in value) from the mid-February high. A rebound in global risk sentiment provided coffee with badly-needed support as that should help to shore up near-term demand prospects which have been eroded by the Russia invasion of Ukraine and a recent build-up of warehouse coffee stocks.
COTTON
May cotton is in a consolidation mode, being pulled higher by strong demand and concerns about persistent drought in west Texas but seeing some resistance with prices already at their highest levels in since 2011. The 6-10 and 8-14-day forecasts call for below normal precipitation but the 1-5 day forecast is wet. While the rain should help, the market may need to build a weather premium, and if the Ukraine war threatens global food supply, cotton may have to fight for acreage. US export sales have been decent.
SUGAR
Sugar has posted 3 negative daily results in a row. While it has improving ethanol demand to provide support, the market has followed crude oil prices lower. A sharp selloff in crude oil and RBOB gasoline put carryover pressure on the sugar market as that could weaken near-term ethanol demand in Brazil and India.
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.
