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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.

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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