La Nina Rains Increase Cocoa Production
Cocoa has faced demand issues since the COVID pandemic began last year, and that has been a factor with many analysts calling for the 2020/21 season to have a global production surplus of 100,000 tonnes or higher. Another factor with those surplus estimates are expectations for a sizable global production increase due to La Nina.
Coffee has been able to lift clear of its January/February consolidation lows twice over the past 2 weeks, and was able to do so in spite of ongoing concerns with near-term global demand prospects.
The market looks vulnerable to a more significant technical correction to the downside. March cotton closed lower yesterday after trading in a wide range. The market attempted to restart the rally that peaked in January, but ultimately failed and ended back near last week’s low.
Sugar prices have benefited from an improved global demand outlook and from carryover support from key outside markets. There have been bullish near-term supply developments which have underpinned prices as well, and that can help sugar to retest its mid-January highs.
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.