NY 2nd Month Sugar Futures
Sugar futures failed above the 40DMA, the upper trend channel, and 18.20. The market closed at 17.91, and the long tail on the upside suggests lack of appetite for higher prices. The stochastics are in neutral territory but lack conviction, the MACD diff is positive but is not diverging. The rejection of prices above the 40DMA and the upper trend channel could trigger losses back through the 10 DMA, towards 17.48. This would confirm the rejection of the upper trend channel, and shooting star candle. On the upside, we would need to see futures gain a foothold above 18.20 in order to regain upside conviction.
Ldn 2nd Month Sugar Futures
Sugar prices traded a wide range yesterday as prices tested resistance at the 100DMA and support around 485.50. The stochastics are rising with the MACD diff positive and diverging suggesting improved buying pressure. The rejection of the 100 DMA, once again, indicates that we could see futures soften back toward the 10 DMA at 480.76, before the second support level at 471.80. Futures need to break this level in order to confirm the outlook of lower prices and a break out of the recent consolidation. On the upside, futures need to take out resistance at the 100DMA 487.16. We expect futures to weaken in the near term towards the 10 DMA and a close below this level today would indicate strong selling pressure.
NY 2nd Month Coffee Futures
Coffee prices sold off sharply yesterday as protracted selling pressure prompted a break of trend support and close at 237.90. The stochastics are falling towards oversold and the MACD diff is diverging on the downside, outlining downside pressure. The close on the lows and the weak indicators suggest lower prices in the near term. Protracted selling pressure could prompt futures to test 230 in the coming week, with secondary support at the 100 DMA. Selling pressure is robust but futures need to push back above 245 in order to regain a footing on the upside. In our opinion futures will continue to soften in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee prices retreated in the near term back towards support at 2170. Futures closed at 2177. The stochastics are falling with the %K nearly in oversold, the %D is lagging suggesting stronger downside momentum and softer or consolidating prices in the near term. The MACD diff is negative and diverging on the downside, a break of support at 2189 would confirm yesterday's full candle and selling pressure. Secondary support stands at the 23.6% fib level could trigger losses back towards 2100. In the upside, if support around 2170 holds firm we could see futures test appetite around the 100 DMA but this level has been rejected in recent sessions and the reaffirmation of this level would confirm the outlook of lower prices.
NY 2nd Month Cocoa Futures
NY cocoa futures partially sold yesterday after finding support at 2570, the market closed at 2616. The stochastics are converging above oversold and the MACD diff is negative and diverging, suggesting lower prices in the near term. Selling pressure this morning could trigger losses back towards yesterday's low, a close below this level would confirm the outlook of lower prices towards the 2541. The market caught a bid at 2570 yesterday and if this band of support holds firm, the market could push back towards 2675 in the medium term. We anticipate softness in the near term but support between 2550 and 2600 is key.
Ldn 2nd Month Cocoa Futures
Ldn cocoa recovered from early losses yesterday as appetite for prices below the 100 DMA prompted a close at 1730. The stochastics are falling in oversold and the MACD diff is negative but converging. The rejection of prices at the 100 DMA may set the scene for lower prices to 1700, secondary support is at the 38.2% fib level. A break of this support level would trigger losses back to 1650. On the upside, if prices could set the scene for higher prices towards 1767.3 We expect further consolidation in the near term.