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Sweeping Reversal in Cocoa


The sweeping reversal for March cocoa after hitting key support at 2466 is a bullish technical development. This leaves the market vulnerable to a resumption of the uptrend; especially if resistance is violated.


While coffee has been pressured by near-term demand concerns, the market has been finding supply-side support that has helped to keep prices in proximity to last week’s 3-month high. Coffee should remain well supported on near-term pullbacks.


March cotton sold off sharply yesterday after failing to take out last week’s highs. Worries about reports of a new, more contagious variant of the coronavirus has fueled traders’ concerns about demand.


While sugar remains at the lower end of its November/December downtrend, the market has been able to grind its way higher over the past week. A “risk off” mood  in global markets led to sizable losses in energy prices which put significant carryover pressure on the sugar market as that may dampen near-term Brazilian ethanol demand prospects.

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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