NY 2nd Month Sugar Futures
NY sugar sold off yesterday as selling pressure prompted a test of support at 40 DMA. The market closed at 24.60. The stochastics are falling, %K/%D is diverging on the downside into the oversold, and the MACD diff is negative and diverging. Yesterday’s full candle, with a longer lower wick, suggests appetite for lower levels but struggling to break below the 40 DMA at 24.62, and we could see futures continue to edge lower in the near term down to 24.09. Secondary support stands at 24.00, with that level holding firm in recent weeks. Conversely, support of around 40 DMA could set the scene for higher prices back to the 10 DMA level at 25.49. A break above that level would help to gain upside conviction. We believe that there is an appetite for lower prices in the near term.
Ldn 2nd Month Sugar Futures
Prices weakened yesterday as moderate selling pressure triggered a close below the 700 support level; the market closed at 685.50. The stochastics are falling, signalling a continuation of the bearish trend. The MACD is negative and diverging, and the long candle body supports market appetite on the downside. In order to confirm the change in trend, prices need to break below the current support of 40 DMA at 672.71 and then 650. Conversely, a break above the 10 DMA resistance line at 699.32 could set the scene for a test of 700 again. We expect prices to remain supported above the 40 DMA support level in the near term, but further softness is on the horizon.
NY 2nd Month Coffee Futures
NY coffee sold off sharply yesterday as protracted selling pressure triggered a close on the back foot at 180.65. The stochastics are falling, and %K/%D converged on the downside, sending a sell signal. The MACD diff is negative and diverging. The break below the current support of 180 could set the scene for lower prices towards the 100 DMA at 178.17. A break below this would confirm the trend for falling prices, down to 175. On the upside, resistance at shorter-term moving averages has proven to be strong, and support above that level would strengthen the bullish momentum. This could also trigger gains towards the 190 level. While the support level at 180 has been robust, prices have been capped by 10 and 40 DMA resistances, suggesting that we might trade sideways in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee gapped lower on the open, but support at 2489 held firm and futures closed at 2508. The stochastics are diverging on the downside, edging out of the overbought, and the MACD diff flipped on the downside, a strong selling pressure, suggesting there is a growing appetite for downside momentum, but near-term support is keeping prices at current levels. To confirm the indicators’ outlook, futures need to break below the support of 2489 before attempting to test the 2400 level. Alternatively, a break back above 10 DMA at 2540 could trigger gains to 2600. We expect futures to be capped below 10 DMA in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday as trading saw prices test trend support at 3017. The market closed at 3026. The RSI is rising, and %K/%D is negative and diverging, exiting the overbought territory. The MACD diff just converged on the downside, suggesting growing selling pressure. The indicators point to lower prices in the near term, and to confirm the rejection of the support; prices need to take out 10 DMA and trend support at 3017. A break below this level towards 3000 would confirm the growing bearish momentum. Conversely, appetite for prices above the 10 DMA level could trigger a test of resistance at 3050; tertiary resistance stands at 3100. Another doji candle signals uncertainty about the outlook for lower prices, and if the futures continue to hold above 10 DMA, we could see prices remain in the higher ranges in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa edged higher yesterday as intraday trading caused futures to close at 2333. Stochastics are rising, and %K/%D is once again diverging on the upside further into the overbought territory, confirming a continuation of the trend in the near term. The MACD diff is positive but converging, suggesting waning buying pressure. To maintain positive momentum, prices need to close above 2355 – recent weeks’ highs - and then target 2375. On the downside, the rejection of prices above these levels could trigger losses back to the trend level at 2320 and 23000, respectively. Buying pressure remains weak, the indicators point to an end of the bullish momentum, and the doji candle confirms market uncertainty. A break below the trend level would help confirm the change in trend.