NY 2nd Month Sugar Futures
NY sugar futures softened marginally yesterday as intraday trading saw futures test appetite at 19.30. This level held firm, and the future closed at 19.12. The stochastics are rising, with %K/%D showing signs of convergence on the downside in the overbought. Likewise, the MACD diff is positive and converging, signalling waning buying pressures. To confirm the outlook for lower prices, the market needs to take out support at 40 and 100 DMA at 19.08 and then support at 18.83. On the upside, futures need to break above the resistance at 19.30, which could set the scene for futures to take out the 19.50 and 19.75. The 40 and 100 DMA levels formed the support level for the futures on the downside, and with a longer upper wick on Thursday, we could see the bears’ strength grow in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged higher yesterday and managed to close above 547.90 at 551.10. The indicators suggest that the upside momentum is waning, and we could see a change in trend in the near term. The stochastics are showing signs of convergence on the downside while overbought, and the MACD diff is positive and begins to converge. On the upside, a break above the 548 level could then test the 560. Superseding this level, resistance stands at 564.50. On the downside, if futures fail into 40 and 10 DMAs at 540, then we could see futures break back below 530.20 to 100 DMA at 528.45. The strong DMA support levels suggest a lack of downside appetite, however, to confirm the indicators, these levels have to be broken first in the near term.
NY 2nd Month Coffee Futures
NY coffee futures sold off sharply yesterday as protracted selling pressure triggered a close on the back foot at 195.30, the October lows. The stochastics are falling in the oversold; the RSI is also falling. The MACD diff is negative and diverging, suggesting growing selling pressure, this could set the scene for lower prices towards 190.50. A break below this level would confirm the outlook of lower prices to 180. 10 DMA at 212.27 is a strong resistance level on the way up, and if this support level at yesterday’s lows is reaffirmed, we could see the strengthening of the upside trend. Futures need to take out 209.65 and then 10 DMA in order to confirm the outlook of higher prices. We expect prices to weaken further, but that momentum to slow in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee sold off yesterday as selling pressure prompted a break below the support at 1952. The market closed at 1930. The stochastics are falling after having converged on the downside in the oversold area. The MACD diff is negative and diverging, confirming the appetite for lower prices. Yesterday’s full candle and the bearish engulfing pattern formation suggest a strong appetite for lower prices, and we could see futures continue to edge lower in the near term down to 19.00. Secondary support stands at 1827, and if this level is reached, it would confirm the descending triangle formation. Conversely, support around 1914 could set the scene for higher prices back to the 10 DMA level at 1959. A break above that level would help to gain upside conviction. We believe that there is an appetite for lower prices in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures sold off strongly yesterday, and we saw futures breach robust support of 2300, causing the futures to close at 2247. The stochastics are falling, with %K/%D converging on the downside in the oversold once again. Likewise, the MACD diff is negative and diverging, signalling continued selling pressures. To confirm the outlook for lower prices, futures need to break below the support at 2236, the lows not broken below since July 2020. Taking out this level could trigger a breach of support at 2215 before 2200. On the upside, if the futures are to confirm a trend reversal, prices need to take out the previous day’s highs at 2305 before 10 DMA at 2327. The candle’s long body is indicative of the markets appetite for strong downside momentum.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures weakened yesterday after breaching support at 1700. The market closed at 1684. The stochastics shows signs of converging on the upside, and the MACD diff is negative and converging, suggesting we could see prices bounce back after yesterday’s protracted weakness. A break below 1700 once again would bring into play the support at 1650. On the upside, futures need to gain back above the trend line at 1715 and then break above the robust DMAs at around 1755 levels in order to confirm upside momentum. This could strengthen the trend in the long run on the upside. Longer upper wick, where most of the trading took place in the lower ranges, points to an appetite for lower prices, however, the indicators point to a trend reversal in the near term.
