Tightening Supply For Cocoa
Following bullish demand news last week, cocoa was further strengthened by positive supply news at the start of this week. The final major quarterly grindings result was the fourth quarter European total released before today’s opening which came in at 344,151 tonnes.
With bullish supply news providing support, the market is in position to remain in an uptrend. Brazil’s Cecafe said that their nation’s December coffee exports came in at 4.26 million bags, which was 38% above their 2019 total and a fourth month in a row in which Brazilian coffee exports came in above 4 million bags.
The dollar was weaker and the stock market higher, and both of those trends are supportive to cotton and have helped to hold the market in an uptrend. A bullish USDA supply/demand report helped send the market to new contract highs last week.
The sweeping key reversal for May sugar would suggest a near term peak may be in place. The COT report shows a hefty net long position from speculators and the market may need to see at least a technical correction before finding support.
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