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Shift to Ethanol Production Support Sugar


Cocoa prices have benefited from a positive longer-term demand outlook for most of this year as the prospect of reduction and then removal of COVID restriction pointed towards increased chocolate consumption. While the market received a reminder of how difficult that process may have during the fourth quarter, cocoa’s bullish supply/demand outlook should help to underpin prices going into November.


While the market continues to have trouble sustaining upside momentum, it has found support well above its October lows and continues to be strengthened by bullish supply developments and improving global demand prospects. A more than 1.2% selloff in the Brazilian currency weighed on the coffee market as extended currency weakness could make Brazil’s farmers more aggressive with marketing their remaining 2021/22 coffee supplies.


December cotton broke out of its recent consolidation yesterday and traded to its highest level since October 8, which was the day it put in its most recent contract high. The close above 111.52 is likely enough to assume a resumption of the uptrend. The dollar broke sharply, and this lent support to cotton.


Sugar prices have consolidated within a fairly tight range over the past 2 sessions that is well above last week’s lows. Weaker crude oil and RBOB gasoline prices put carryover pressure on sugar as they may dampen Brazilian and Indian ethanol demand prospects.

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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