NY 2nd Month Sugar Futures
NY sugar weakened yesterday as protracted selling pressure triggered a close on the back foot just above the 19.49 support at 19.50. The stochastics are falling, with %K/%D entering the oversold. The MACD diff is negative; however, it lacks the conviction to suggest an outlook. A full bearish candle suggests growing selling pressures; this could set the scene for lower prices to break below the 19.50 support level. This would confirm the trend for falling prices, down to 19.21. On the upside, resistance at 10 DMA at 19.85 has proven to be strong, and a break above that level would strengthen the bullish momentum. This could also trigger gains towards the 20.00 level. Recent trade patterns suggest continued softness, and we expect prices to continue to fall in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower yesterday after prices broke below 540.20, prompting a close at 535.70. The stochastics are falling, with %K/%D converging on the downside, and the MACD diff crossed into a negative. To confirm the bearish indicators and rejection of prices above 550, futures need to take out support at 530 and then target 520. On the upside, futures need to close above 10 DMA and then test 550 in order to confirm the outlook of higher prices towards 40 DMA at 559.96. We expect futures to weaken in the near term.
NY 2nd Month Coffee Futures
NY coffee futures opened lower but struggled below the 10 DMA level and managed to close higher day-on-day at 321.25. The stochastics have converged on the downside, with %K%D now falling, a strong sell signal. The MACD diff is positive and converging. On the upside, futures need to break above the resistance levels of 325 and 340 to trigger the momentum. Prices would then need to take out the 350 level to suggest new highs. Conversely, appetite for prices below 10 DMA at 316.27 could trigger a test of support of 304. A spinning top candle shows rejection of lower prices, but the indicators point to an end of the bullish sentiment we have seen in the last couple of days.
Ldn 2nd Month Coffee Futures
Ldn coffee futures opened lower yesterday but consolidated during the day, testing support at the 10 DMA. The market closed at 5152. The %K/%D is flat. The MACD diff is positive and also flat, suggesting a lack of sentiment in either direction. The indicators point sideways in the near term; however, to suggest softer prices, prices need to take out the 10 DMA. A break below this level towards 5000 would confirm the strong bearish momentum. Conversely, appetite for prices above the 5250 level could trigger a test of resistance at 5369. Yesterday’s signals uncertainty about the outlook for lower prices, and if the futures continue to struggle below these levels, we could see prices edge higher in the near term.
NY 2nd Month Cocoa Futures
NY cocoa strengthened yesterday as protracted buying pressure triggered a close on the front foot at 10821. The stochastics are rising, with %K/%D diverging on the upside further into the overbought. The MACD diff is positive and diverging. A long bullish candle body short wicks suggest growing buying pressures; this could set the scene for higher prices to break above the 11000 resistance. This would confirm the trend for rising prices, up to 11722, an April high. On the downside, a breach of support at 10000 would strengthen the bearish momentum. This could also trigger losses towards the 10 DMA at 9901. Indicators point to higher prices; however, futures need to break above 11000 to confirm the outlook.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures gained ground yesterday but struggled to break above the trend resistance, closing marginally higher at 8622. The stochastics are rising, with the %K/%D strengthening further into the overbought, as the MACD diff is positive and diverging the upside. This suggests we could see higher prices in the near term towards the resistance of 9000, but the market needs to take out immediate trend resistance at 8650. On the downside, futures need to break below the 10 DMA level at 7968. If this level breaks, we could see prices test 7348. Short wicks point to an appetite for higher prices, but futures need to take out the trend resistance completely in order to confirm the outlook on the upside.
