Investing.com -- Citi updated its commodity price outlook, particularly noting a renewed upward momentum in coffee prices.

The financial services firm now anticipates that the February highs for coffee could be surpassed, revising its three-month price projection point (pp) to $4.20 per pound. This adjustment reflects expectations that buying pressure will decrease significantly due to a more robust Brazilian supply than previously anticipated.

In contrast, Citi has adopted a tactically neutral stance on sugar, forecasting only minimal upside potential for sugar prices. Despite recent dry conditions, these have not been deemed impactful on yields. A recovery in Asian crop development is expected, which, when combined with rising demand fueled by global biofuel policies and overall consumption growth, suggests that sugar prices are likely to stabilize.

On the cocoa front, Citi advises caution, suggesting that any price rally should be considered a selling opportunity. The firm’s analysis indicates that the bull market for cocoa, which has lasted 2-3 years, is nearing its conclusion. An expected significant increase in supply, coupled with grindings data that suggest persistently weak demand, underpins Citi’s bearish outlook on cocoa.

These updated commodity forecasts from Citi come as market participants continuously assess the balance of supply and demand across these key agricultural markets. The firm’s projections are based on current market trends and fundamental drivers, which are subject to change as new data emerges. For investors and industry stakeholders, these price target adjustments provide a snapshot of Citi’s market expectations for the near term.

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