1. Soft Commodities Outlook
  2. Softs Technical Charts

NY 2nd Month Sugar Futures

NY Sugar 26072023

NY sugar futures held their nerve yesterday as intraday trading saw prices close at 24.87. The RSI is rising, while %K/%D is negative and converging, about to leave the overbought territory. The MACD diff is positive and converging, 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 the 10 DMA at 24.56. A break below this level towards the 40 DMA at 24.37 would confirm the strong bearish momentum. Conversely, appetite for prices above 25.00 could trigger a test of resistance of 26.00; tertiary resistance stands at 26.37. A negative doji candle after the gravestone doji suggests market prices rejecting prices above 25.00. However, at the same time, the short-term moving averages are holding firm, and we expect futures to edge lower and find support at these levels in the near term.

Tables 1 (327)

Ldn 2nd Month Sugar Futures

Ldn Sugar 26072023

Ldn sugar futures edged lower yesterday as intraday trading caused futures to close at 685.50. The stochastics are converging on the downside, with %K/%D still in the overbought territory, and the MACD is positive and converging, pointing to a waning buying pressure. The rejection of prices above 690 yesterday has formed a candle with a long wick on the upside, suggesting prices are uncertain about higher levels. However, at the same time, lacking the conviction to break above the near-term support. If prices were to break below 10 DMA at 678.64, this could trigger a test of 40 DMA at 668.46 and then 661.10. On the upside, futures need to take out 700 and then robust resistance at 711.60. Indicators point to further selling pressure today, but the futures need to take out 10 DMA in the near term to confirm this.

Tables 2 (326)

NY 2nd Month Coffee Futures

NY Coffee 26072023

NY coffee futures softened yesterday after struggling above 164.05 and closing at 162.20. The stochastics continue to strengthen, but upside momentum is seen slowing down, and the MACD diff is positive and converging, suggesting we could see lower prices in the near term through the support of 160. A break below this level would bring into play the 10 DMA 159.34. On the upside, futures need to gain back above 164.05 – the previous days' high - in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the 40 DMA level at 168.45; this could strengthen the trend in the long run on the upside. The longer upper wick points to an increased appetite on the upside, but we expect to see prices edge lower in the near term.

Tables 3 (325)

Ldn 2nd Month Coffee Futures

Ldn Coffee 26072023

Ldn coffee futures opened above the previous day’s close; however, prices struggled above 2675 and closed on the back foot at 2462. The stochastics are falling, with %K/%D converging on the downside near the overbought – a strong sell signal. The MACD is positive and converging, confirming stronger downside pressures in the near term. The rejection of higher prices may prompt a break back below the support at 40 DMA at 2618, a subsequent breach of this level could trigger losses towards the 10 DMA at 2563. On the upside, a break of resistance at 2675 may prompt futures to test the robust trendline at 2770. A small candle body with little shadow points to little appetite out of the current trading range; however, the future needs to break below 40 DMA support to confirm the outlook for lower prices.

Tables 4 (327)

NY 2nd Month Cocoa Futures

NY Cocoa 26072023

NY cocoa futures rallied strongly in the last couple of days, with the most recent candle breaching resistance of 3400, highs not seen since March 2011. Prices closed higher at 3467. Stochastics continue to diverge on the upside in the overbought, but that momentum is slowing; however, the MACD diff is positive and now diverging, which could suggest further upside pressures before a change of trend in the near term. To confirm this, the futures must solidify support at 3400 before testing the trend resistance at the 3470 level. Alternatively, if the rally exhausts itself, the prices should soften back into 3400 before 10 DMA at 3380. The three white soldiers' formation, alongside the size of yesterday’s candle body, suggests strong conviction on the upside, and we expect futures to trace the trend resistance level.

Tables 5 (325)

Ldn 2nd Month Cocoa Futures

Ldn Cocoa 26072023

Ldn cocoa futures gained ground yesterday as buying pressure triggered a close on the front foot above 2600 at 2622. The stochastics are rising, with the %K/%D edging close to the overbought, as the MACD diff is negative and converging on the upside. This suggests we could see a continuation of a bull trend in the near term, with prices edging towards 2650, before testing the 2680 level, the recent week’s highs. On the downside, the candle found support at 2504, and if the prices break through this level, we could see prices retreat back through 2500 to the 50 DMA at 2463. The three-white soldier formation is a bullish signal, but futures need to find support above 2600 in order to solidify the outlook on the upside.

Tables 6 (326)




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