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Current Softs Futures Charts

Coffee production in Africa grows

Current Softs Futures Charts

Take a look as we cover the following Softs Futures markets of

  • Sugar
  • Cotton
  • Coffee
  • Cocoa

Sugar Price Action

Sugar had a bit of a head fake last week. It appeared it was about to take off again breaking though the previous weeks highs. Friday the sugar market was caught up in a broader market sell off. Price still maintains above the pervious low of significance at 1943. Momentum indicators are tipped lower, in my opinion these indicators mean nothing until we have a actual price break on the chart. This would be the 1943.

In the past update on 2-17-23 I mentioned considering using a option strategy to protect your futures position for this market. I would still lean on using that today and as always feel free calling myself or Kent if you would like help tailoring a strategy.

Sugar Price Chart
Sugar Price Chart

Cocoa Price Action

Cocoa short term price has been stopped by the 61.8% extension level from our recent high to low. At this point the down side risk for the bulls is still back down towards 2574 on the May contract in my opinion. All three trends remain up daily, weekly, and monthly so I would still avoid trying to pick a top here.

Cocoa Price Chart
Cocoa Price Chart

Coffee Price Action

Coffee price has stopped right at the 200 day moving average. We mentioned to keep an eye on this in our previous update. Price now sits between the 200 day and the 9 day moving average.

Another point to note is the RSI failed to make a new high as the price did. Be careful of a flush of the long positions this week. Price really needs to break the 200 day if the bulls want this market to make another push.

Coffee Price Chart
Coffee Price Chart

Cotton Price Action

The bears have been comfortably in control of this market for a while now. Friday showed profit taking and allowed price to jump back up to the down trend line I have pointed out. I still feel like the price jump on Friday was not enough to scare the short positions. I think the play is still to the downside unless we can break the old highs from the end of January so for the folks shorting this market I would identify the risk at .8933. Until then I believe the bears will control, also one more point to note is that the gap is still open down below current price levels.

If you like anything in our updates feel free to let us know or give us a call. We would be happy to discuss potential trade ideas for you.

Cotton Price Chart
Cotton Price Chart

 

Soft Commodity Trading 

Softs commodity trading differs from traditional grain trading for a few different reasons. 

  1. Global Supplies
  2. Global Demand
  3. Elasticity of demand 
 

Global Supplies

Softs commodities are grown all over the world. Sugar, Cotton, Coffee, Cocoa are all primarily grown outside of the U.S. Sugar’s largest producers are Brazil, India, and the European Union.  This brings an interesting dynamic to trading. It can be hard to track an early frost in South America or how the monsoon season is shaping up in India. 

 

Global Demand

Demand for Soft commodities is spread out throughout the word. China and India being large consumers of Cotton for their textile industries. India and the European Union are large consumers of Sugar.

 

Elasticity of Demand 

Soft commodities are primarily used for non essentials. Outside of Sugar no other Softs are used for Energy. Cotton is very sensitive to Global economies. When there are rising concerns of recession, cotton prices tend to be weaker.

 

 

Futures prices may have already factored in the seasonal aspects of supply and demand. Unless otherwise indicated , this is not to be an offer to sell a solicitation to buy any futures or options on futures contracts. This data is from sources we believe to be reliable but cannot guarantee its accuracy. Opinions expressed are subject to change without notice. Trading commodity futures and options on futures involve substantial risk and may not be appropriate for everyone. Past performance may not necessarily be indicative of future results.

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