Sugar Prices Holding Ground
Brazil ethanol export demand on the rise; big sugar supply Sugar prices have held their ground above the 50-day and 200-day moving averages since the middle of last week and are on-track for their second quarterly gain and fifth monthly gain in a row. The market continues to receive bearish supply news, however, and that may limit near-term upside and leave sugar vulnerable to long liquidation.
Cocoa prices are on-track for a negative weekly result, but they have been able to lift clear of their September lows. Stronger US equity markets and a positive reversal from an 8-week low in the Eurocurrency provided carryover support. There are reports that Ghana will raise their 2020/21 minimum official purchase price by 28%, which is larger than next season’s price hike for neighbors (and top cocoa producer) Ivory Coast.
After a sizable pullback over the past 2 weeks, coffee prices are showing some signs that they have found their footing. December coffee was able to break an 8-session losing streak. The Brazilian currency rebounded from a 4-week low to post a more than 1.5% gain, and that was a key source of carryover support as it eases pressure on Brazil’s producers to market their near-term supply.
The market remains in a choppy trading pattern as traders await better news on any serious damage done from recent flooding. The selloff to the lowest level since September 11 failed to attract new selling interest and the market managed to bounce. The dollar reached a new high for the move but closed lower on the day, and the S&P 500 managed to close higher after trading to its lowest level since July 30.
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