NY 2nd Month Sugar Futures
NY sugar weakened yesterday as ongoing selling pressure led to a close on the back foot, breaking below the 100 DMA of 14.53 and settling at 14.41. The stochastics are falling, with %K/%D diverging on the downside in the oversold area, indicating that recent downward momentum may begin to stall. This is further highlighted by a longer lower wick during yesterday’s session, implying that markets might be rejecting lower lows. For a trend reversal, futures would need to break back above 14.50 before targeting 14.72, the 40 DMA. The next strong support is at 14.30, and a break below this could pave the way for a move to 14.00. We believe prices could rebound today, but the 40 DMA remains key in determining whether the overall trend is reversing or if a mean-reversion strategy is at play.
Ldn 2nd Month Sugar Futures
Ldn sugar weakened yesterday as selling pressure led to a close on the back foot just above the 100 DMA at 425.40. The stochastics are falling, with %K/%D diverging on the downside into the oversold territory. The MACD diff is negative and diverging, reflecting recent losses. A long bearish candle with a growing downside wick and a close just above the 100 DMA indicate that the market lacks enough selling pressure to break significantly lower. Given the oversold indicators, we believe this could signal a mean-reversion in the near term back towards 430. Conversely, a break below the 100 DMA at 424.91 could spark a new wave of sellers towards 420 and then 410, an April low.
NY 2nd Month Coffee Futures
NY coffee edged higher yesterday as moderate bullish sentiment pushed futures to close above the 10 DMA of 265, which had been limiting upside potential, settling at 266.70. The indicators suggest growing bullish momentum; %K/%D is now diverging out of the oversold, while the MACD diff is negative but set to converge into positive territory, which would signal a strong buy. To sustain positive momentum, prices need to break fully above the 10 DMA and then target 270. With support at 260 appearing solid, indicators point to continued bullish momentum in the near term.
Lnd 2nd Month Coffee Futures
Ldn coffee strengthened yesterday as sustained buying pressure led to a close above both the 40 and 10 DMA at 3415. The stochastics are rising, with %K/%D diverging on the upside, and the MACD diff is negative and converging. A longer bullish candle body with a prominent upper wick indicates a growing appetite for higher prices. A break above these levels could set the stage for a move above 3500. Conversely, a breach of support at 3350 would reinforce bearish momentum. While indicators point to higher prices, yesterday’s candle suggests the market may struggle above 3500 in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures held steady yesterday after struggling above the 4200 level, closing lower at 4171. The stochastics are rising, with %K/%D just diverging on the upside, and the MACD diff is negative and diverging. Reaffirmed support at the 10 DMA at 4051 could pave the way for higher prices to retest the May high of 4750, confirming an inverse hammer formation. On the downside, futures would need to break back below the 10 DMA support to confirm a bearish trend. The 40 DMA support has remained robust in recent weeks, and a break below this level would signal strong downside conviction. The longer upper wick and body confirm that support is still intact.
Ldn 2nd Month Cocoa Futures
