Volatile Outside Forces in Sugar
Following a 2-day/129 point pullback, the cocoa market saw signs that it has found some support. A forecast from the AFEX exchange that Nigeria’s 2021/22 cocoa production will decline 8% from last season provided early support to the cocoa market, as that adds to early trade estimates that this season’s West African production will fall short of 2020/21 levels.
After starting the month with a sizable daily gain on Monday, coffee has spent the last 3 sessions in a coiling price pattern. The market continues to find support from bullish supply/demand developments, however, and that should help coffee prices remain well supported.
December cotton closed lower yesterday, but spent the session inside Wednesday’s range as the market continues to consolidate the breakout range from Monday. The dollar was higher, which is negative to cotton while the market may have been disappointed with the weekly export sales report, which was a bit underwhelming. The report showed US cotton export sales came in at 139,110 bales for the 2021/22 (current) marketing year and 20,600 for 2022/23, for a total of 159,710.
Sugar prices are on-track for a positive weekly result and are on the verge of climbing back above their 50-day moving average for the first time since early October. Sugar has been able to do this in spite of significant carryover pressure from key outside markets, and that reflects the strength of bullish Brazilian supply developments.
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