NY 2nd Month Sugar Futures
NY sugar futures held their nerve yesterday as intraday trading saw prices close at 26.88. The stochastics are continuing to rise, and %K/%D is positive and diverging, continuing in the overbought territory. The MACD diff is positive and diverging, suggesting growing buying pressure. The indicators point to higher prices in the near term, and to confirm the rejection of the resistance, prices need to be taken out at 27.21. A break above this level towards 28.00 would confirm the continued bullish momentum. Conversely, appetite for prices below 26.37 could trigger a test of support of 10 DMA at 26.13; tertiary support stands at 25.40, back to last week’s levels. A positive candle after a similar bearish candle signals market uncertainty about prices below the current support, and narrowing moving average support is creating a tighter trading range, a break out of which would set the scene for strong momentum on the upside. We anticipate prices to remain elevated in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve yesterday, causing the market to close at 720.70. The stochastics are rising, with %K/%D diverging on the upside once again, and the MACD diff is positive and diverging, suggesting higher prices in the near term. To confirm the outlook of higher prices, futures need to close back above 730 and then target 737.50, the recent high. The 10 DMA is closing in and supporting prices on the downside. However, a break below that level could set the scene for 700 and then 40 DMA at 686.36. The narrow candle body with long upper and lower wicks points to market uncertainty about the direction of the move, and the futures need to break out of current resistance/support to confirm the near-term outlook.
NY 2nd Month Coffee Futures
NY coffee futures softened yesterday after finding support above 150. The market closed at 149.80. The stochastics are falling out of the overbought territory and continue to weaken, and the MACD diff is positive and converging, suggesting we could see lower prices in the near term through the support of 150 completely. A break below this level would bring into play the 148 level, which could set the scene for support at 143. On the upside, futures need to gain back above the 10 DMA at 153.21 in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the 40 DMA level at 156.93; this could strengthen the trend in the long run on the upside. The long candle body and short wicks point to an increased appetite on the downside, and we could see the price edge lower in the near term.
Ldn 2nd Month Coffee Futures
Prices weakened yesterday as moderate selling pressure triggered a close at 2407. The stochastics are falling; the %K/%D just converged on the downside and are now edging towards the oversold, signalling a continuation of the bearish trend. The MACD diff is positive and converging. Prices tested 2400; however, a close above and a short wick support market appetite below that level. On the upside, a break above 10 and 40 DMA at 2455 and 2487, respectively, could see the test of trend resistance at 2518. Conversely, a break below the 2400 support line could set the scene for a test of 2370. We expect prices to soften today and remain on the back foot.
NY 2nd Month Cocoa Futures
NY cocoa futures edged lower yesterday as intraday trading caused futures to close at 3612. The stochastics are converging on the downside, with %K/%D still in the overbought territory, but the MACD is positive and converging, pointing to a waning buying pressure. The rejection of prices above 3650 has formed a candle with a longer wick on the downside, suggesting an appetite for lower prices; however, it lacks the conviction to break above the near-term support. If prices were to break below 3600, this could trigger a test of 10 DMA at 3576 and then 40 DMA at 3472. On the upside, futures need to take out 3650 and then robust resistance at 3676. Indicators point to further selling pressure today, but the futures need to take out 10 DMA in the near term to confirm this momentum.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened lower but managed to close higher day-on-day at 2977. The stochastics are in the overbought territory, with %K%D continuing to rise. The MACD diff is positive and converging. On the upside, futures need to break above the resistance levels of 3000 to trigger the momentum. Prices would then need to take out the trend resistance levels level to confirm the longer-term outlook. Conversely, appetite for prices below 2900 could trigger a test of support of 2800. A dragonfly doji candle shows rejection of higher prices and the indicators that point to a slowing upside trend we have seen in the last couple of days.
