ADMIS News
COCOA
Cocoa has been a beneficiary of the positive shift in global risk sentiment, as that has also strengthened key outside markets that provided additional carryover support. The market has a bullish supply/demand outlook as well, and that can help to sustain this current recovery move.
COFFEE
While the market had trouble sustaining upside momentum throughout the month, coffee finished January with a positive monthly result. A more than 1% rally to a new 4-month high in the Brazilian currency provided carryover support to the coffee market as strength in that currency eases pressure on Brazil’s producers to market their remaining near-term coffee supply. Rainfall forecast for Brazil’s major Arabica-growing regions weighed on coffee prices as that should benefit their upcoming 2022/23 Arabica production.
COTTON
March cotton followed Friday’s rally with another move to contract highs yesterday and the market closed near the high of the day. The nearby futures traded to their highest level since July 2011 again today. The market benefited from a sharp decline in the US dollar, higher crude oil prices, and a recovery in the stock market. The lower dollar makes US cotton more attractive on the world market, higher crude prices make man-made fibers more expensive relative to cotton, and a stronger stock market bodes well for demand.
SUGAR
Sugar prices were finally able to find some support, due in large part to significant carryover from its key outside markets. In spite of a bullish global supply/demand outlook, the market has trended lower. March sugar broke a 7-session losing streak to close higher. Indications that Thailand and India sugar production was running ahead of last season’s pace has kept sugar prices on the defensive. However, a sizable rebound in crude oil and RBOB gasoline prices provided carryover support as that should help to strengthen ethanol demand both in Brazil and in India.
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