SOFTS: 24Sep Most of the Softs were caught in the risk-off trading today.
COCOA:
First Notice: Dec: 16Nov
Options Last Trade: Nov: 05Oct; Dec: 02Nov; Jan13: 07Dec
24Sep
Dec Support/Resistance:
2833 Oct 2011 high.
2727: +2 STD above the 21-day moving average
2705: 07Sep high.
2600: Late Jan12 peaking action
2590: Inflection level dating to 8/28.
2576: 21-day moving average
2501: 13Aug high
2366: 24Aug low.
2426: -2STD below the 21-day moving average.
2357: Rising trend line from 04June lows.
2327: 200-day moving average.
2035 area: Major support. Horizontal trend line. 12/12/11 low and 6/1 and 6/4 low.
Comment: Caught in the general risk-off selling, today’s trading extended recent negative action. Trend, Momentum, ROC and RSI are all clearly pointed lower. The question is how Oversold it will become.
Another modestly weak day, that featured a lower low. The Dec contract remains below the rising 21-day moving average. A spike in Volume validates the action today, but we’re unsure of its sustainability
Seasonal Snapshot: An uptick in all three patterns until 29Sep, then a brief spike lower until another rise commences on 07Oct.
COFFEE:
First Notice: Dec: 16Nov
Options Last Trade: Nov: 12Oct; Dec: 09Nov; Jan13: 14Dec
24Sep Early risk-off losses were pared as bargain-hunting demand appeared below 170.00.
Dec Support/Resistance:
194.85: 11July high.
192.25: 200-day moving average.
191.95: 19July settlement (recent settlement high)
183.10: +2STD above the 21-day moving average.
170.00: 21-day moving average
156.55: 06Sep low.
156.95: -2STD below 21-day moving average
Comment: An early new lows push was rejected handily in later session buying action.
However, Volume was anemic. Directionals point to a market rolling to a clearly more negative bias. Momentum and Trend are close to going negative. ROC is decelerating rapidly and RSI is now falling. Given this dynamic, look for a likely rejection of the recent mini-rally.
Hedging for delivery is likely to be a cash intensive business unless some sort of long option strategy is implemented. Call or email us for information on how to implement.
Seasonal Snapshot: All 3 patterns head generally higher until month end.
COTTON:
First Notice: Dec: 26Nov
Options Last Trade: Dec: 06Dec
24Sep
Dec Support/Resistance (Dec):
83.04: Dec 2011 low: old support/new resistance?
81.82: 200-day moving average.
77.86: +2STD above 21-day moving average.
78.90: Rising trend line from the 19June high through 09Aug & 21Aug highs. Forms the upper boundary of a rising wedge.
77.00-77.25: Resistance range that has held since 8/9.
75.39: 21-day moving average.
75.66: Rising Trend line drawn from the 6/4 low through the 6/28 low. Forms the lower boundary of a rising wedge. We’re having doubts as to the this patterns validity.
73.00-73.25: Inflection level since late May.
72.92: -2STD below the 21-day moving average.
64.61: 04June low.
Comment: Whatever positive shift was evident late last week has vanished. Trend and Momentum have resumed their biases with some acceleration. ROC is also pointing lower. RSI, while modestly Oversold, is showing more weakness as well. Volume’s rise was supportive of the negative action. Today’s action takes the Dec Cotton below the 73.00-73.25-inflection level. This is potentially quite bearish.
Seasonal Snapshot: All three patterns are in generally higher biases going into topping action in late September.
SUGAR:
First Notice: Oct: 01Oct; Mar: 01Mar
Options Last Trade: Nov: 15Oct; Dec: 15Nov; Jan13: 17Dec
24Sep Switching to March as the roll is under way.
Sugar strengthened modestly today despite the general risk-off tone to most markets. The likely culprit is seen as a delay in the Brazilian cane-crush due to rains. When the crush resumes apace, weak Northern hemisphere demand coupled with the robust supply is seen as a dynamic that will become ever more negative. Any additionally Energy weakness will add to the negative dynamic.
Mar Support/Resistance:
24.10: 20July high, near 23July high (24.07)
22.66: 200-day moving average.
21.50: Old resistance & where Sugar fell to & bounced for a short time in early May
21.32: 20Aug high.
20.89: +2STD above 21-day moving average
20.25: 13June low
20.22: 21-day moving average.
19.65: 19Sep low
19.54: -2 STD below 21-day moving average.
18.48: 06Sep low.
16.50: Nov 2010 low.
Comment: The market seems to be in the midst of a bounce rally. Today’s Volume spike is suspect due to the roll. The action is bullish but suspect as well, as it failed to make a new high over Friday’s. This is an important near-term level as the market is testing the bottoming lows in late August. Directionals are pointing to a modestly higher bias. Watch the action around the 20.25 level. This may set up as an inflection level.
If this is breached, look to the 20.90-21.00 level as the next area the market must get through to confirm a bullish move.
Seasonal Snapshot: All three patterns are in a modest downward bias until mid Sep, then pop higher until 01Oct.