NY 2nd Month Sugar Futures
NY sugar futures opened higher yesterday, but the upside momentum struggled to break above recent highs of 20.00 and closed at this level. The stochastics are falling, but %K is now seen edging higher, suggesting waning downside pressures in the near term. However, the MACD diff just flipped into negative territory. To confirm the MACD sell signal, futures would need to break below the support of 19.64 before targeting 19.50. On the upside, a break above 10 DMA at 19.93 could trigger gains to 20.48. The volumes weakened slightly, but remain historically higher, in line with September 2022 levels. We expect futures to remain at elevated levels in the near term, and a break out of current levels would suggest the building momentum.
Ldn 2nd Month Sugar Futures
Ldn sugar gapped lower, but struggled to break below 40 DMA, triggering a strong gain during the day to close at 552.30. The stochastics continued to weaken, and the MACD diff converged on the downside, highlighting yesterday’s break below solid support. Volumes are also weakening, suggesting futures could remain at current ranges in the near term. To confirm this, futures need to hold support at 40 DMA at 541.91, but we expect futures to struggle above 553.20. On the upside, if this level does not hold, we could see marginal losses to 540 and 530, respectively. We expect futures to test the 40 DMA today once again, but to remain supported above it.
NY 2nd Month Coffee Futures
NY coffee futures jumped higher yesterday and managed to close above all the moving average resistance levels at 183.25. The indicators suggest we could see higher prices in the near term. The stochastics have converged and are now rising, and the MACD diff is positive and diverging on the upside, confirming the trend. The RSI is rising, and we expect futures to edge higher in the near term towards 200. However, the futures first need to take out the robust level on the upside at 190. On the downside, if futures fail into 180 again, then we could see prices break back below moving averages at 175. We expect futures to firm in the near term, and with futures breaking above the DMAs, this suggests further upside pressures in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee strengthened yesterday, as moderate buying pressure triggered a close on the front foot at 2070. The stochastics are rising, with %K/%D diverging on the upside towards overbought after converging on the upside. The MACD diff converged back on the upside. A long bullish candle body with short lower wicks suggests growing buying pressures; this could set the scene for higher prices to break above the 2082 level. This would confirm the trend for rising prices, up to 2100. On the downside, a breach of support at 10 DMA at 2047 would strengthen the bearish momentum. This could also trigger losses towards 2000. Indicators point to higher prices, but futures need to break above 2080 to confirm the outlook.
NY 2nd Month Cocoa Futures
NY cocoa futures edged above the previous day's closing price, but the bullish momentum was not strong enough, and futures closed lower on the day at 2659. The stochastics continue to rise, and the MACD diff is negative and converging. The rejection of prices above 2671 has formed a candle with a narrow body, but a long wick on the upside, a shooting star formation, suggesting a lack of conviction to break above the near-term resistance. If prices were to break above this level, this could trigger a test of 2700. To confirm the shooting start formation, futures need to take out 10 DMA at 2628 and then robust support of 40 DMA at 2615. A break below this level would confirm the outlook for lower prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa edged higher yesterday, as intraday trading caused futures to test appetite at 2050, and the market closed below at 2049. Stochastics are rising, and %K/%D is diverging on the upside in overbought, confirming the building upside momentum of the trend in the near term. The MACD diff is positive and diverging, suggesting growing buying pressure. To maintain positive momentum, prices must close above 2050 and then target 2059, which is the October high. On the downside, the rejection of prices above 2050 could trigger losses back to 2015 before targeting 2000. Buying pressure remains weak, but indicators point to growing upside momentum. The reaffirmation of support above 2015 could strengthen the outlook of higher prices.
