NY 2nd Month Sugar Futures
NY sugar futures sold off on Friday as a lack of appetite for higher prices helped to confirm the rejection of the bullish trend the market experienced for most of September; the market closed at 22.64. Stochastics are falling, with %K/%D converging on the downside out of the overbought territory; MACD is positive and converging, suggesting lower prices in the near term. The sell-off yesterday suggests strong selling pressure; however, to confirm the outlook for lower prices, the 10 DMA at 22.42 has to be broken below first. A break below this level could set the scene for a test of support at 22.00. On the upside, support around 10 DMA could help reaffirm the trend on the upside. The key level on the upside is 23.64, and if futures break above this level, it could set the scene for higher prices to 24.00 in the medium term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures gapped lower on Friday, breaking below the 600 level completely, but support at the 10 DMA caused the market to close at 581.20. The stochastics are falling, with %K/%D diverging on the downside and now falling out of the overbought, and the MACD diff is positive and converging, suggesting lower prices in the near term. To confirm this momentum, a break below support at 570 could set the scene for 550. On the upside, futures need to close back above the 10 DMA at 579.23 and then target 600. The narrow candle body with longer wicks points to a lack of appetite out of the current range. We expect prices to struggle below 550 in the near term.
NY 2nd Month Coffee Futures
NY coffee futures opened higher on Friday, but the previous day’s resistance caused futures to close lower on the day at 266.90. The stochastics continue to rise, with the %K/%D diverging into the overbought territory; the MACD diff is positive and converging marginally. A break of the 10 DMA level at 262.85 could trigger losses through 260, with the tertiary level at 40 DMA at 247.78. On the upside, a break above 270 could set the scene for bullish momentum towards new highs. The indicators point to a continuation of momentum on the upside; however, we expect that futures will be bound by the trend resistance in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures edged lower on Friday, but support at 5000 caused the market to close at 5203. The stochastics are showing signs of trend reversal, with %K/%D converging on the upside, as the MACD diff is negative and converging, suggesting higher prices in the near term. To suggest the outlook of higher prices, futures need to close back above 10 DMA at 5235 and then target 5369 before 5500. However, a break below support at 5000 could set the scene for the 40 DMA at 4383 and then 4664. The bearish candle body has a longer, lower wick, and a lack of appetite is on the downside. However, at the same time, futures are capped by resistance 5369, and to confirm the change in momentum, prices have to break above this level.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher on Friday and managed to close above 6720 at 6763. The indicators suggest we could see higher prices in the near term. The stochastics are converging on the upside, the %K/%D is rising out of the oversold, and the MACD diff is about to converge on the upside, which is a strong buy signal. On the upside, a break above the 7000 level could then prompt the test of the 40 DMA level at 7069. Superseding this level, resistance stands at 7126. On the downside, if futures fail into 10 DMA once again, we could see futures break back below 6000. The 10 DMA level is now creating a firm support level from which futures prices can gain momentum. We expect to see further gains to 7000 in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures gained ground once again on Friday, breaking above the robust trend resistance level to close at 4746. This move is indicative of a strong buy signal, which prompted a break out of the descending triangle formation. The stochastics are rising, confirming the growing upside momentum, as the MACD diff is negative and converging. This suggests that the indicators point to no end to the bearish momentum in the near term, and if prices break above 5000, we could see a change of longer-term momentum on the upside. On the downside, the candle found support at 4489, and if the prices break through this level, we could see prices retreat back through 4000. The bullish candle with short wicks after a similar bullish candle points to growing certainty to break out of the current resistance.
