NY 2nd Month Sugar Futures
NY sugar futures softened on Friday, breaching the support at 100 DMA. The market closed at 18.98. The stochastics are falling into the oversold territory, and the MACD diff is negative and diverging, suggesting we could see lower prices in the near term through support of 18.63. A break below this level would bring into play the 18.00 level. On the upside, futures need to gain back above the 100 DMA at 20.05 in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the level at 10 DMA at 19.83; this could strengthen the trend in the medium term on the upside. The short wick and the formation of three black crows point to an increased appetite on the downside, and we could see a price edge lower in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures softened on Friday after prices failed above the 540.20 level, prompting a close on the back foot at 529.10. The stochastics are oversold, with %K/%D diverging on the downside, and the MACD diff is also diverging on the downside, outlining the weakness in the market. The dips have been well bid, and to confirm further softness, futures need to break below the 530 level completely before targeting 512.90 – a key support level. Alternatively, if prices can gain a footing back above yesterday's highs at 545, the bulls could then target 100 and 10 DMAs in order to regain upside conviction. We anticipate prices will remain on the back foot in the near term.
NY 2nd Month Coffee Futures
NY coffee futures lost ground on Friday as selling pressure intensified, prompting prices to test levels below 240. However, the downside momentum reversed quickly, and prices closed at 238.20. The MACD diff just converged on the downside, suggesting strengthening selling pressure. The stochastics are diverging on the downside. To help confirm the selling pressure from the stochastics, prices need to break below the 233.35 level before targeting 40 DMA at 230.40. On the upside, if futures can find support above the 10 DMA, this could set the scene for higher prices back above 250 before targeting 255.30. Selling pressure weakened on Friday, outlined by a longer downside wick. However, the indicators suggest lower prices in the near term. We expect prices to weaken in the near term, but the futures need to break below 233.35 to confirm that outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve on Friday as intraday trading saw futures test appetite below the 10 DMA. Futures closed at 4530. The stochastics are falling out of the overbought, and the MACD diff is positive and converging, signalling waning buying pressures. To confirm the outlook for lower prices, a break below the support at 4500 could set the scene for futures to take out the 4338 level before targeting 4200. On the upside, the market needs to take out resistance at 10 DMA and then 4600. A narrow candle body with a longer lower wick signals uncertainty about the outlook for lower prices in the near term.
NY 2nd Month Cocoa Futures
NY cocoa softened on Friday, as moderate selling pressure triggered a close on the back foot at 6785. The stochastics are falling, with %K/%D diverging on the downside towards the oversold. The MACD diff is negative and diverging. A growing candle body with a longer upper wick suggests a lack of appetite on the upside; this could set the scene for higher prices to break below 6700, but prices struggled below that level. On the upside, a breach of robust resistance at 7025 would strengthen the bullish momentum. This could also trigger gains towards the 7500 level. Indicators point to lower prices, but with prices falling below the 6700 level, futures are capped on the downside.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened higher day-on-day but struggled to break above the resistance at 5500 and closed at 5302. The stochastics are diverging on the downside into the oversold. Likewise, the MACD diff is negative and diverging marginally. Prices then need to take out the 100 DMA level at 5289 to confirm the bearish momentum to 5000. Conversely, appetite for prices above 6000 could trigger a test of resistance of 10 DMA. Friday's candle shows rejection of higher prices and could point to further weakness in the near term. To confirm this, the support at 100 DMA has been broken below first.
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