NY 2nd Month Sugar Futures
NY sugar futures softened yesterday as moderate selling pressure saw futures struggle above the 19.00 level to close at 18.83. At the same time, the 40 DMA support at 18.74 held firmly, as showcased by the longer lower wick, suggesting that markets are uncertain about the near-term trend. The stochastics are falling as the MACD diff is positive and about to converge on the downside, which could act as a strong sell signal. To confirm the bearish trend, futures need to break below the near-term support of 40 DMA, which could set the scene for prices to take out 18.50 before 18.00. On the upside, a break above the 19.00 level and respective DMAs would strengthen the bullish momentum to 19.50. A bearish candle with a longer lower wick points to an appetite for lower prices, but near-term resistance caps the gains on the upside. We expect futures to weaken slightly today.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower yesterday after prices struggled to mark new gains, prompting a close at 527.30. The stochastics are falling, with %K/%D diverging on the downside, and the MACD diff is positive and converging, about to send a sell signal. To confirm the bearish indicators and rejection of prices above 10 DMA at 537.53, futures need to take out support at 100 and 40 DMAs at 522.33 and 524.05, respectively. On the upside, futures need to close above 10 DMA and then test 540.20 in order to confirm the outlook of higher prices towards 550. We expect futures to weaken in the near term, retesting the 100 DMA support level.
NY 2nd Month Coffee Futures
NY coffee futures buckled yesterday as protracted selling pressure triggered a close below the trend support at 374.95. The stochastics are falling, and the MACD diff is negative and diverging. A break of the support at 375 could completely trigger losses through 350. On the upside, a break back above the 10 DMA could set the scene for a test of 40 DMA of 389. A break below the trend support in recent sessions points to a growing downward trend. We believe that the momentum will favour the downside, and after yesterday’s long candle body, we expect prices to soften today.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened yesterday after breaking support of 10 DMA. The market found new support at 5369, prompting a close slightly above this level at 5361. The stochastics continue to soften, and the MACD diff is negative and diverging, suggesting we could see lower prices in the near term. A break below the current support level would bring into play the 100 DMA at 5226, which could set the scene for support at 5000 in the longer term. On the upside, futures need to gain back above 10 DMA at 5478 in order to confirm upside momentum. The reaffirmation of support there could trigger gains towards the level at 5569. A longer lower wick, where most of the trading took place in the upper ranges, points to a lack of bearish appetite below current levels. However, prices need to break below the current support level to confirm the indicators’ outlook on the downside.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday as intraday trading caused the market to close below 8000 at 7968. The stochastics are rising, with %K edging away from the oversold, and the MACD diff is positive, suggesting higher prices in the near term. To confirm the outlook for higher prices, futures need to close back above 8000 and then target 100 DMA at 8385. On the downside, the rejection of prices around current levels could trigger losses back towards 7800. A break below this level would confirm the downward trend. Narrow-bodied candles in the last couple of sessions point to market uncertainty, and the futures need to break out of current resistance to confirm the longer-term outlook.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday as intraday trading saw futures struggle above the 10 DMA level. This level held firm, and futures closed at 6178. The stochastics are rising slowly, with %K/%D trading out of the oversold, and the MACD diff is positive and diverging, signalling growing buying pressures. To confirm the outlook for higher prices, futures need to break above the 10 DMA at 6204, which could set the scene for futures to test 6500. On the downside, the market needs to take out 6000 – a robust support level. Recent candles have been trading within the band of strong resistance/support, holding prices constrained. We expect futures to remain rangebound today.
