Blue Line Breakfast Report - Sugar Cocoa Coffee OJ - January 30
“Actionable Trading Ideas that help you stay ahead of the markets”
Cocoa - YTD up 9.61%
As President Trump would say “Yuge” rally in the cocoa market as concerns about hot and dry weather grip the growing region. Looking at the enhanced weather satellite of South Africa we continue to see rain miss key areas. News of the Coronavirus spreading overnight may impact demand over the long haul however a key turnaround on the charts resumes the bullish momentum.
With the market punching through 2800, the next upside target is the contract high at 2859. First level of support would be today’s low at 2741 and a break below 2673 would be a devastating blow to the bulls.
R2 - 2900
R1 - 2859
S1 - 2741
S2 - 2673
Upside target = 2859
Reversal point = 2673
Sugar - YTD up 8.57%
Fundamentals are taking over as the global production deficit continues to expand, we should see futures rechallenge the contract highs at 14.87. Looking at outside markets, crude oil and corn continue their decline which might act as a headwind going forward. The current expectations are that the global deficit will be about 6 million tonnes.
R2 - 15.49 - High Nov 20th 2017
R1 - 14.90
S1 - 14.36
S2 - 14.05
Target - 15.49
Reversal point = 14.05
Orange Juice - YTD down 2.81%
Back into the boring trading range of 98 to 94.30, momentum indicators did have a small uptick and MACD did cross to the upside. This market needs some kind of supply threat or breakout close over 98 to ignite a short covering rally.
Coffee - YTD down 21.24%
A small attempt to defend the 100 level was made this morning as the bearish supply outlook continues to grow. We have seen the Brazilian Real fall to a 2 month low which continues to pressure producers. With 2000 Starbucks locations closed in China, this could continue to weigh in on demand.
R2 - 113.70
R1 - 109.09 - 200 DMA
S1 - 100.50
S2 - 96 - Key low from last October
Good luck and good trading,
Chief Market Strategist
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