NY 2nd Month Sugar Futures
NY sugar futures gained ground yesterday as buying pressure prompted a test of the 10 DMA level to close on the front foot at 17.74. The stochastics have crossed on the upside but have failed to confirm the signal as the %K is seen tailing off on the upside, highlighting waning selling pressures. The MACD diff fluctuated around positive and negative, with yesterday's candle causing the diff to converge on the upside. To confirm another bullish candle, futures need to close above 10 DMA at 17.74 and then target 18.00. On the downside, the break below 17.48 could set the scene for lower prices towards the support of 17.29. However, the market struggled below 17.48 in recent sessions, and the bullish engulfing pattern suggests a strong buy signal. We believe that prices will strengthen in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar strengthened yesterday, as protracted buying pressure triggered a close on the front foot above at 479.70. The stochastics are converging, %K is tailing off on the upside in the oversold. The MACD diff is negative and converging. Long bullish candle body with a short lower wick suggests growing buying pressures; this could set the scene for higher prices to break above the resistance at 500 completely. This would confirm the trend for rising prices, up to the 10 DMA at 482.85 and then 40 DMA at 488.98. On the downside, a breach of support at 471.80 would strengthen the bearish momentum. This could also trigger losses towards the trend support at 468.15. Indicators point to higher prices, and we expect futures to strengthen in the near term.
NY 2nd Month Coffee Futures
NY coffee futures softened yesterday after prices failed above the 254.75 level, prompting a close on the back foot at 250.65. The stochastics are falling and diverging, and the MACD diff is also converging on the downside, outlining the upcoming weakness in the market. Yesterday's close above the key support level of 10 DMA at 250.29 could prompt prices to gain a footing back above 254.75, the bulls could then target 260.45 in order to regain upside conviction. On the downside, a break of 10 DMA at 250.29 could set the scene for lower prices at 244.75. We anticipate prices to remain on the back foot in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held the nerve yesterday after prices failed above 2279 once again and closed at 2274. The stochastics are rising, with %K/%D diverging in the overbought, and the MACD diff is positive but lacks to point out an outlook. The stochastics being in the overbought suggests we could see a change in momentum in the near term. On the downside, futures need to break below the support of 40 and 10 DMA at 2260 and 2251, respectively, in order to confirm the outlook of lower prices. The 10 and 100 DMAs have closed in, with the short-term DMA breaking above the longer term, and we expect this to provide robust support in the near term. The reaffirmation of support at 2233 could set the scene for higher prices back to 2279. Yesterday's doji candle points to market uncertainty. The market needs to gain a footing above 2279 in the immediate term to improve the outlook on the upside.
NY 2nd Month Cocoa Futures
NY cocoa futures softened marginally yesterday as moderate selling pressures saw futures test appetite at 2653. This level held firm, and the future closed at 2655. The stochastics are diverging on the downside. Likewise, the MACD diff has converged on the downside, a strong sell signal. To confirm the outlook for lower prices, futures need to break below the support at 2653, which could set the scene for futures to take out the 38.2% fib level at 2620. On the upside, the market needs to take out resistance at 2675 and then 2700. The longer upper wick could be an indicator of the end of a downtrend, but stochastics point to further downside momentum.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures softened yesterday as protracted selling pressure saw futures test appetite at trend support and closed at 1740. The stochastics are falling, with %K/%D diverging on the downside. Likewise, the MACD diff is negative and diverging, suggesting we could see price fall further. To confirm the outlook for lower prices, futures need to break below the trend support at 1740, the level the futures struggled to break since November, which could set the scene for futures to take out 1730. On the upside, the market needs to take out resistance at 61.8% fib level at 1767 and then resistance at 1800. We expect futures to soften, but futures need to break below trend support to confirm that.
