Short-Term Low For Cocoa
A close above 104.40 may confirm short-term low. While the demand outlook remains subdued through the end of the year, a post-election rebound in global risk sentiment has helped to soothe some near-term demand concerns. With West African supply becoming a front and center issues, cocoa is in position to rally.
In spite of whipsaw price action over the past few weeks, coffee still remains in its late October/November consolidation zone. The market is now on-track for a positive weekly reversal from a 3 1/2 month low, however, and now has bullish supply news and a key outside market working in its favor.
December cotton once again turned down after hitting resistance levels as the market seems to have turned lower after the October 28 reversal. However, the market is still vulnerable to a surprise cut in production for the upcoming USDA supply/demand report. The stock market broke into new high ground and the dollar broke sharply, and both these moves should be supportive to cotton consumption and US export potential.
Sugar has been one of the few commodity markets that has seen relatively calmer price action following the US election. The market is vulnerable to more long liquidation. Energy prices could not hold onto their early strength as crude oil fell into negative territory yesterday, and that carryover pressure weakened sugar as it limits the potential for near-term Brazilian domestic ethanol demand improvement.
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