NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday as prices closed at 24.77. The indicators begin to favour the downside, with %K/%D converging on the downside back down to the oversold area, suggesting growing selling pressures. The MACD, however, lacks convictions and has remained flat and negative in recent days. A break below the 10 DMA at 24.66 would bring into play the recent sessions’ support level at 24.09. Prices have been relatively well supported above this level, and in order to indicate an improvement of market sentiment on the upside, futures need to gain a footing above the 40 DMA level at 25.22 and then target 25.80 in the near term. Futures have been trading between the shorter-term moving average levels, and to confirm the growing downside momentum, the support at 10 DMA has to be breached first.
Ldn 2nd Month Sugar Futures
Ldn sugar futures continued to weaken yesterday, but support at 10 DMA held firm and the futures closed at 675.10. The stochastics, however, are pointing to softening downside pressures, with the stochastics seen rising, and the MACD diff is negative and converging. The futures struggled to break below the 10 DMA support in recent days, and given the diminishing volumes in the market, the appetite for prices below this level is low. However, if this level is broken below, we could see prices test the 661.10. Alternatively, if prices gain momentum to break back above the 40 DMA to 686.42. Longer upper wicks in recent days suggest growing momentum on the downside, but first, the futures must break below the 10 DMA support to confirm the outlook.
NY 2nd Month Coffee Futures
NY coffee futures failed into 100 DMA yesterday as prices closed below at 178.70. The stochastics are falling, with %K/%D converging on the downside, a strong sell signal; the MACD diff is positive and converging, also about to become negative. This underscores strong selling pressures from the indicators, and the three black crows pattern confirms the outlook for lower prices in the near term. The next robust support level stands at 175, and if futures break below this level, it could trigger losses to 171.85, the level not breached since March. On the upside, a break back above 100 DMA at 181.17 may prompt futures to retest the 40 DMA level at 185.77. A subsequent breach of this level would prompt prices to regain upside momentum.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday as futures tested appetite at 2675. This level held firm, and the future closed at 2689. The stochastics are falling, with %K/%D converging on the downside, and the MACD diff is positive and converging, signalling growing selling pressures. To confirm the outlook for lower prices, futures need to break below the support at 2675 first before taking out the 10 DMA level at 2622. On the upside, the market needs to take out resistance of 2700 and then at 2790. A narrow candle body after recent weakness highlights the uncertainty surrounding lower prices below 2675. If the futures break below the current support, this would confirm a stronger trend on the downside.
NY 2nd Month Cocoa Futures
NY cocoa futures continued to strengthen in recent days, with yesterday’s trading testing the highs of 3216, the highs not seen since June 2016. This level held firm, and futures closed slightly below at 3184. The stochastics are continuing to strengthen further into the overbought, and the MACD diff is positive and diverging. If there is further impetus for higher prices, we could see the futures retest the 3200 level before attempting the 3216 once again. If, however, futures struggle above this level, prices could come back to 3100 before the 10 DMA at 3090. Today’s candle points to the futures rejecting the prices above the 3200 level, but we expect the prices to remain supported above the 3100 today.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures gained ground yesterday but struggled above 2440 and closed at 2436. The stochastics are rising, with the %K/%D edging further into the overbought, as the MACD diff is positive and diverging, which would suggest further buying pressures. This suggests we could see further bullish momentum in the near term, but prices need to break above 2440 before testing the 2455 level. On the downside, the candle found support at 2400, and if the prices break through this level, we could see them retreat back to 2355. The bullish candle with longer upper and lower wicks point to prices confirming the support and resistance levels yesterday. We expect the upside momentum to continue in the near term.
