Solid Demand Tone For Coffee
Cocoa has seen Asia become the “engine” for global demand growth, a multi-year shift towards “origin” grindings and a positive year-over-year result for fourth quarter North American grindings. Europe remains a major source of demand concern, and that put the cocoa market back on the defensive this week.
While coffee has been pressured by European near-term demand concerns, it has a bullish longer-term supply outlook to provide underlying support. With signs of improving North American demand adding a further boost to prices, coffee may be heading for a retest of its late February highs.
The cotton market has consolidated and experienced an inside trading session yesterday. Cash traders report some increased sales/price fixations with mills after the recent drop in prices. The trade is also watching whether the recent rain in West Texas will mark a change in trend from the extremely dry conditions there.
Sugar prices remain within the March consolidation zone. They continue to find near-term support above last week’s low, and could see an extended upside move if both key outside markets can regain their strength.
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