NY 2nd Month Sugar Futures
NY sugar futures continued to be supported by the 21.00 level on the downside. However, at the same time, the appetite for higher prices is not robust, and recent candles closed below the resistance of 22.50, with yesterday’s close at 21.55. Meanwhile, the stochastics continue to weaken, and the MACD diff just converged on the downside, sending a strong sell signal. If the futures break above the 22.00 level, we expect them to struggle above the recent highs now marked by the 10 DMA level at 22.44. The lack of appetite shown in low volumes also highlights the uncertainty surrounding the outlook for higher prices. At the same time, the 21.00 has been supporting the downside, and if this level is broken, this could signal a change of trend down to 20.50 before 40 DMA at 20.04. In the meantime, we expect futures to remain in the current range.
Ldn 2nd Month Sugar Futures
Prices gained ground yesterday as support at 580.70 held strong, causing prices to close marginally higher at 591.40. The MACD diff is positive and flat. The stochastics are also falling the downside out of the overbought, suggesting moderate selling pressure. Indeed, the recent candle trading within the same range suggests a lack of appetite out of the current levels. If the 580.70 level is broken, prices could target 550. On the upside, a rise above the 10 DMA level could trigger gains to 600. The indicators point to continuing downside momentum, but candles need to break below the near-term support of 580 to confirm this.
NY 2nd Month Coffee Futures
NY coffee futures weakened yesterday after investors rejected prices above trend level at 265, prompting a close below at 250.50. The stochastics are falling, with the %K/%D diverging out of the overbought, suggesting a negative trend. The MACD diff is negative and diverging, indicating improving sentiment on the downside. To confirm another bearish candle and the three black crows formation, prices need to break below the robust trend support level at 248. But, before it, the 40 DMA at 2504.5 needs to be broken first. Conversely, to regain upside conviction and continue the longer-term trend on the upside, futures need to close back above 10 DMA at 261.67 and then 270 in the near term. Near-term momentum is on the downside; however, we see little appetite for prices to break out of the longer-term trend on the upside. Therefore, we expect the downward trend to reverse in the coming days.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened yesterday as moderate selling pressures saw futures break below the 40 DMA level and close at 4720. The stochastics have converged on the downside, and now the %K/%D is falling into the oversold. Likewise, the MACD diff is negative and diverging on the downside, signalling growing selling pressures. To suggest the outlook for higher prices, futures need to break back above the 40 DMA level, which could set the scene for futures to take out 5000. On the downside, the market needs to take out support at 4664 and then support at 4500. This level continues to support the futures from the downside, and with a longer upper wick on Thursday; we could see the bears’ strength grow in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures opened lower day-on-day but gained marginal ground to close at 6038. The %K/%D is edging towards the oversold. The MACD diff is negative and diverging, suggesting further appetite for lower prices, but futures need to break below the psychological levels of 6000 completely to trigger the momentum. A break below this level towards 5824 would confirm the strong bearish momentum. Conversely, appetite for prices above the 10 DMA at 6310 could trigger a test of resistance of 6500. A doji candle with a longer upper wick shows a growing appetite for lower prices, in line with the indicators pointing to growing downside momentum. We expect futures to remain on the back foot in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday as intraday trading caused the market to close at 4440. The stochastics are rising, with %K/%D converging out of the oversold, and the MACD diff is negative, suggesting higher prices in the near term. To confirm the outlook for higher prices, futures need to close back above 4489 and then target 4600. On the downside, the rejection of prices around current levels could trigger losses back towards 4000, confirming the descending triangle formation. Two narrow-bodied candles in the last couple of sessions point to market uncertainty, and the futures need to break below the current resistance to confirm the near-term outlook on the upside.
