2nd Month NY Sugar Futures
NY sugar futures edged lower yesterday as selling pressure prompted a test of support around 10.00. The indicators lack conviction as the stochastics hover around the oversold territory. The MACD diff is positive and diverging on the upside, as the ADX and DMI start to fall suggesting waning downside pressure. If support at 10 holds firm, this could set the scene for higher prices towards 10.60 before targeting 11. The market has struggled above 11 in recent weeks and if prices can hold above 11, this could set the scene for higher prices towards 11.80. The 40 DMA is closing in fast and we expect this to provide resistance. On the downside, futures have failed above 10.40 in recent session and this could trigger losses through 10. A break of support at 10 would help confirm the descending triangle and bring the 138.2% at 9.51 into play. We expect prices to continue to consolidate in the near term and we could see prices re-test 10.80.
2nd Month London Sugar Futures
London sugar futures edged higher yesterday as appetite for futures at the 10 DMA at 327.65. The market closed at 331.20. The indicators are starting to strengthen as the stochastics break out of the oversold territory. The MACD diff is positive and is diverging on the upside. The DMI and ADX is starting to converge and this could trigger gains through the 61.8% fib level at 335.07. A break of resistance at 335 could set the scene for higher prices to the 50% fib level where prices have failed recently and if futures break this level the bulls need to close the gap. On the downside, the descending triangle is still intact and if prices fail at the 61.8% fib level, this could strengthen on the downside trend. To confirm the trend prices need to break below 320 and confirm the descending triangle.
2nd Month NY Coffee Futures
NY coffee prices softened yesterday as selling pressure triggered a test of the 100 DMA. The market closed at 118.35 and the stochastics are in neutral territory. The MACD lacks conviction and prices have failed above 121.50. To regain upside conviction futures need to break above 38.2% fib level and then target 130. The reaffirmation of support at the 100 DMA would set the scene for higher prices in the long run. Conversely, futures need to close below the 100 DMA to set the scene for lower prices to 110, a break below 110 would help confirm the head and shoulders and trigger losses to 103. There is a band of support below 110 and this has kept the market on the upside.
2nd Month London Coffee Futures
London coffee prices buckled yesterday as futures closed on the back foot at 1209. Protracted selling pressure has prompted the indictors to weaken. The stochastics are in oversold territory and the MACD diff is negative and diverging on the downside suggesting lower prices. To confirm the bearish engulfing candle prices need to close below 1173.80 and then challenge 1145. The market has been supported below 1200 in recent weeks, this could trigger some of yesterday’s losses to be taken back. However, futures need to break above the 10 DMA where resistance has been strong. Secondary resistance stands at the 40 DMA at 1253. We expect prices to remain on the back foot in the near term.
2nd Month NY Cocoa Futures
NY cocoa futures posted an inside day yesterday as futures. The market failed at 2300 yesterday and the market closed at 2288. The stochastics are falling and have given a sell signal. The MACD diff is converging in positive territory and this suggests selling pressure in the long run. A break below near term trend support could set the scene lower prices to 2200. The recent rejection at 2400 suggests a lack of appetite for higher prices. On the upside, prices need to gain a footing above 2400 and then test the 40 DMA at 2472. We expect prices to remain on the back foot in the near term.
2nd Month London Cocoa Futures
London cocoa futures weakened yesterday as resistance at the lower trend channel triggered a close at 1767. The stochastics are falling and have given a sell signal, the MACD diff positive and converging suggesting lower prices. We could see prices retreat to test support at 1729, prices failed to confirm the breakout of the descending triangle. To confirm the triple top at 1850 prices need to take out support at 1729 and then 1700. Selling pressure is strong in the near term and we expect this to remain the case.