NY 2nd Month Sugar Futures
Prices weakened yesterday as moderate selling pressure triggered a close at 25.69. The stochastics are falling once again; the %K/%D just converged on the downside and now declining, signalling a growing bearish trend. The MACD diff is negative and remained flat in the last couple of sessions. Prices tested 10 DMA at 25.60; however, a close above and a short upside wick support market indecisiveness below that level. On the upside, a break above 26.00 completely could see the test of the 27.50 level before 27.21, the multi-year high. Conversely, a break below the 10 DMA support line could set the scene for a test of 24.50. We expect prices to soften today and remain on the back foot.
Ldn 2nd Month Sugar Futures
Ldn sugar futures softened yesterday after prices failed above 710 once again, prompting a close on the back foot at 697. The stochastics are weakening, with %K/%D seen converging on the downside, and the MACD diff is also diverging on the downside, outlining growing weakness in the market. The dips have been poorly bid, and to confirm the full downward candle, the futures need to break below the 10 DMA level at 695 before targeting 690.20 and 650, respectively. Alternatively, if prices can gain a footing back above yesterday’s highs at 715, the bulls could then target 718.20 in order to regain upside conviction. We anticipate prices to remain the range-bound in the near term.
NY 2nd Month Coffee Futures
NY coffee futures softened yesterday after piercing the support level of 40 DMA. The market closed below 183. The stochastics are falling, with %K/%D just converging on the downside, trading close to the oversold, and the MACD diff is negative and diverging slightly, suggesting waning buying pressures. The reaffirmation of support at 40 DMA at 183.94 could set the scene for higher prices back to test the 10 DMA at 185.42 level once again. On the downside, futures need to break below the support of 40 DMA in order to confirm the bearish trend. The 180 support level has been robust, and a close below 40 DMA helped to suggest there is an appetite for lower levels. The market needs to break below this level completely in the immediate term to confirm the outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee futures sold off yesterday as a lack of appetite for higher prices helped to confirm the rejection of higher levels; the market closed at 2393. Stochastics have converged on the downside, and the MACD is negative and diverging on the downside, suggesting lower prices in the near term. The long bearish candle and a close below 2400 means we could prices edge below that level. A break below 2355 could set the scene for a test of support at 2300 and then the 40 DMA, which is improving. On the upside, support around 2400 would help reaffirm the trend on the upside. The key level on the upside is now at 10 DMA at 2429, and if futures break above this level could set the scene for higher prices higher in the medium term. Indicators point to the end of the bull run, but futures need to break below 2400 completely to confirm the outlook.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday as intraday trading caused the market to close at 3003. The futures held firm above 3000, and the stochastics continue to gain ground, with %K now overbought, and the MACD diff is positive and diverging, highlighting recent upside momentum. To confirm the bullish indicators, futures need to break above the resistance at 3042, the previous day’s highs, before targeting 3050. On the downside, to confirm the outlook of lower prices, futures need to close back below 3000 and then target 10 DMA once again at 2945. Two narrow-bodied candles in the last couple of sessions points to market uncertainty, and the 3000 support remains robust; we could see prices edge up in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened higher yesterday, but the resistance of 2265 caused futures to close lower on the day at 2256. The stochastics are seen diverging on the upside, with the %K/%D now rising higher in the neutral territory, and the MACD diff is negative and converging. A break back below 2250 could trigger losses through 2200, with the tertiary level at 50 DMA at 2165. On the upside, a break above 2286 could set the scene for bullish momentum towards 2300. The doji candle formation has been formed, which points to market indecisiveness about higher prices; however, the indicators point to further upside momentum in the near term.