NY 2nd Month Sugar Futures
NY sugar sold off once again Friday, falling below the robust support level of 25.00, closing at 24.26 – August low. A long candle body with pretty much no shadow highlights the appetite for lower prices. The stochastics confirm this: the %K/%D is now oversold, and the MACD diff is negative and diverging. Today’s candle opened lower but struggled below the 24.00 level; the support could hold in the meantime. If this level is breached, the next robust support stands at 23.42 before 23.00. Alternatively, a break back above 25.00 could send prices to test the moving averages, which form a strong resistance. Volumes have picked up drastically in recent days, suggesting the conviction on the downside was strong, and another long bearish candle could create the three black crows formation, suggesting a complete reversal of the longer-term upside trend. In the meantime, we expect futures to fluctuate around the 24.00 level today.
Ldn 2nd Month Sugar Futures
Ldn sugar, in line with the NY contract, weakened sharply on Friday as protracted selling pressure prompted prices to fall below the 700 level to close at 679.60. The stochastics are edging lower in the oversold, with MACD diff negative and diverging, highlighting recent downside momentum. To suggest further losses, futures must break below the 38.2% fib level at 677.23 before targeting the 655 support. On the upside, a break above 700 could trigger gains to 100 DMA at 708.32 and then 10 DMA at 716.39. Two long bearish candles indicate a robust downward appetite. We expect further downside pressures today.
NY 2nd Month Coffee Futures
NY coffee futures saw protracted selling pressure on Friday, testing prices below the 180 level. However, this support held firm, and futures bounced back to close at 184.35. The stochastics continue to highlight the growing trend on the upside, with %K/%D edging towards the overbought and MACD diff positive and diverging, suggesting we could see prices remain in the elevated ranges in the near term. To suggest further highs, futures need to break above Friday’s highs before targeting the 190 level. Alternatively, a break back below the 180 level could set the scene for the 10 DMA at 172.74 and 170, respectively. The hanging man formation, where there was some weakness during the day, points to an end of the uptrend; however, the short candle body highlights to the market the uncertainty about the change of trend. We expect futures to edge slightly lower in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve on Friday as intraday trading saw futures test appetite at 2550 once again. This level held firm, and the future closed at 2528. The stochastics are falling, with %K/%D converging on the downside, and the MACD diff is negative and diverging, signalling growing selling pressures. To confirm the outlook for lower prices, the market needs to take out the support of 10 DMA at 2504 and then support at 40 DMA at 2419. On the upside, a break above the resistance at 2550 could set the scene for futures to take out the 2600 level before targeting 2610. A doji candle after a strong bullish candle signals uncertainty about the outlook for higher prices. We expect futures to remain rangebound in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve on Friday, causing the market to close at 4201. The stochastics are falling, with %K/%D converging on the downside outside of the overbought, and the MACD diff is positive and converging, suggesting lower prices in the near term. To confirm the outlook for lower prices, futures need to close below 4200 and then target the trend support just below this level. The 10 DMA is closing in and supporting prices, and futures have struggled to break that level in recent sessions. On the upside, a break above 4300 could set the scene for 4400 – a new high. A bearish candle with a longer lower wick points to a pause in the recent upside. Still, futures should remain supported by 10 DMA in the meantime.
Ldn 2nd Month Cocoa Futures
Ldn cocoa held its nerve on Friday as prices closed at 3498. The stochastics are falling, with %K/%D exiting the overbought territory as they are about to converge on the downside. The MACD is negative and diverging, pointing to lower prices in the near term. The rejection of higher prices may prompt a break back towards support at 3400, a subsequent breach of this level could trigger losses towards 40 DMA at 3329. On the upside, a break above 3570 may prompt futures to the 3600 level. A subsequent breach of this level would prompt prices to regain upside momentum in the longer term. Short lower wicks point to a lack of appetite for lower prices; however, the stochastics point to growing downside pressures. For that to be confirmed, the 10 DMA support level has to be broken first.