Blue Line Breakfast Report - Sugar Cocoa Coffee OJ - February 4

“Actionable Trading Ideas that help you stay ahead of the markets”

Cocoa - YTD up 8.35%

All in all cocoa is doing a pretty decent job maintaining its strength giving this global situation with the coronavirus. Now that I put my foot in my mouth you will want to watch critical support down at 2663. If this level gets breached the floodgates might open since open interest is back near record highs.

From a technical perspective the trend traders continue to maintain long positions still from January 10th at 2588 and with support at 2675 and sell triggers down at 2679. A move down through 2679 puts them on the sidelines. Some of the key technical levels I closely follow are more in the middle of the range so you might want to wait for the breakout to occur in order to add to your positions.

Sugar - YTD up 11.1%

Now I’m starting to have separation anxiety from the longs exited last week. We did take one stab at some long put options thinking that energy prices would weigh in and those worked out if you followed us in and out. Something I did was set up a google alert on “India Sugar Production” for when a new story hits the wire. What I am finding is the deficit continues to grow larger hence the futures continue to climb.

The trend traders are still long with entries back on January 6th at 13.73 and with the market settling at 14.89 the first level of support comes in at 14.18. The sell triggers are down at 13.93 and is a place to get out not a place to reverse.

Orange Juice - YTD down 5.41%

The shorts trend traders triggered are finally in the black with the shorts being initiated on January 13th at 95.60. With the market setting at 94.60 the shorts are puffing their chests out with confidence. Your first area of resistance is 96.63 and your buy trigger is at 96.56. That’s an area to get out, not an area to get long.

Coffee - YTD down 23.98%

One would think Starbucks would start giving a discount based on how these coffee prices have been selling off, yet somehow my bill keeps going up. Looking at the Supply/Demand factors, coffee is tracking China and Global demand fears as a result of the CoronaVirus. It does appear some progress has been made in the past 24 hours on treating the virus however significant demand destruction continues to cripple certain markets. Expect global GDP figures to be lowered going forward.

Trend traders have been short coffee since January 24th at 110.15 and with the market settling at 97.90 they are comfortably ahead on the week. First level of resistance is up 103.83 and buy triggers are at 114.13. That is the level they would blow out of positions, not the level they would initiate longs.

Phillip Streible

Chief Market Strategist


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*percentage figures are taken at time of writing

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures; LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results

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