NY 2nd Month Sugar Futures
NY sugar futures rallied yesterday as protracted buying pressure triggered a close on the front foot above 25.00 at 25.09. The RSI is rising, while %K/%D has converged on the upside. The MACD diff is negative and converging, confirming rising buying pressures. On the downside, a break below the key support level of 24.00 could trigger losses back towards 23.00; a break below this level would confirm the outlook of lower prices in the longer term. On the upside, a complete close above the 40 DMA at 25.09 could trigger gains through 26.00. A long candle body points to more certainty in the bullish momentum, and a close above 40 DMA would confirm the outlook for higher prices.
Ldn 2nd Month Sugar Futures
Ldn sugar strengthened yesterday as protracted buying pressure triggered a close on the front foot at 681.50. The stochastics remain oversold, with %K/%D seen diverging on the upside. The MACD diff is negative and converging. A bullish candle with a longer lower wick suggests growing buying pressures; this could set the scene for higher prices to break above the moving average resistance levels at 686. This would confirm the trend for rising prices, up to 700. On the downside, a breach of support at 662 would strengthen the bearish momentum. This could also trigger losses towards the 650. Indicators are suggesting strong upside momentum, and if futures break above the moving average resistance levels, we would expect to gain positive momentum in the near term.
NY 2nd Month Coffee Futures
NY coffee futures skyrocketed yesterday after the protracted buying pressure triggered a close on the front foot at 190.35. The RSI is rising, while %K/%D is diverging on the upside; both are about to enter the oversold. The MACD diff is positive and diverging, outlining the recent market rally. On the downside, a break back below the shorter-term moving averages at 180 could trigger losses back towards 171.85; a break below the 170 level would confirm the outlook of lower prices in the longer term. On the upside, a break above 190 could trigger gains through the resistance of 590. The market rally was strong yesterday, with the candle length highlighting the strength of bull sentiment. We could see prices remain at elevated levels today, but we expect futures to struggle above 190 in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures rallied strongly in the last couple of days, with the most recent candle breaching resistance of 2675, the highs not seen since price tracking in 2008. The prices closed higher at 2726. Stochastics continue to diverge on the upside in the overbought, and the MACD diff is positive and diverging, which could suggest further upside momentum. To confirm this, the futures must solidify support at 2675 before testing the 2800 level. In the longer term, the resistance at 2800 would have to be breached to confirm the bull run. Alternatively, if the rally exhausts itself, the prices should soften back into 2260 before 10 DMA at 2570. The three white soldiers' formation, alongside the size of yesterday’s candle body, suggests strong conviction on the upside, and we expect another day of positive gains today, although resistance at 2800 could hold firm.
NY 2nd Month Cocoa Futures
NY cocoa futures strengthened yesterday as protracted buying pressure triggered a close on the front foot at 3137, the highs not seen since September 2016. The RSI is rising, while %K/%D is diverging towards the overbought. Likewise, the MACD diff is positive and diverging, confirming growing buying pressures. On the upside, finding support above the 3100 could trigger gains through the 3150 level towards 3200. On the downside, a break below the 10 and 40 DMA levels at 3046 and 2986, respectively, could trigger losses back towards 2930. These levels have been supporting futures prices in recent days, and we expect prices to find further strength on the upside.
Ldn 2nd Month Cocoa Futures
London cocoa futures continued to strengthen marginally in recent days, breaking above the trend resistance to close at 2391. Yesterday’s candle opened above the previous day’s close, testing the highs not seen since 2016. The stochastics are continuing to strengthen further into the overbought, and the MACD diff is positive and diverging, but the momentum has been slow. If there is further impetus for higher prices, we could see futures test 2400. If, however, the indicators point to softening buying pressures from being overbought, the futures could come back to 2355 and then 2300. Yesterday’s candle pointed to further momentum for the upside, but to confirm the appetite, futures must break above 2400 in the near term.