Breakfast Report - Cocoa Sugar Coffee OJ

Softs Technical Report

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Cocoa (July) - Sidelines but looking for Long side to confirm itself

Technicals: The trend following system has gone to the sideline with new trade trigger points. Sell Trigger a close under 1971 and a buy trigger above 2413***

Settle: 2392***

OTE Unrealized Profit/Loss: $0.00 (Short closed out on April 6th $4080 gain)

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 2402(Yesterday's High)***, 2583****(200 DMA)

(EXPMA = Exponential Moving Average)

Pivot: 2231**** Parabolic stop and reversal

Support: 2343 (18 EPMA)***, 2305 (Breakout point from March 25) ****

ADX: 31.41= Market is rising from oversold territory.

200 DMA: 2583

Fundamental Comments: Wednesday - Market is watching Global Equities and looking for bullish developments. I am leaning on the long side and with this small pull back cocoa could be reloading for a thrust higher. Watch the foreign currencies like the Euro to strengthen and help grinders acquire additional product.

Previous Fundamentals through out the week below

Tuesday - Market is still focused on demand concerns and watching outside markets such as U.S. and European Equities. The Chart pattern looks like is forming a V or U shaped bottom. Most of the time we don't get the full recovery and we hit some speed bumps so watch the Fib Retracements. Also, watch for a boost in demand once lock down restrictions are lifted.

Monday : Signs of Chinese Economic growth are starting to come to life. Remember there were bullish supply developments at the start of the growing cycle with hot dry weather. Now we are entering into a wetter phase which should help the mid crop growing cycle. On the COT report Non-Commercials are net -1,188 contracts after flipping from long to short.

Previous week:

Asian Demand should see the first recovery as they are moving past the virus. Once we see a rebound in risk sentiment, U.S. equities and European, we can most likely see that bounce occur. Watch for short covering start to trigger.

This economically sensitive commodity should see some selling pressure as the day goes on. Watch for a test of the key support levels before another bounce.

The market appears to be making a small double bottom with solid support in the 2200 range. Look at tightening up stops if you are short and consider punting to the long side with calls on a breakout over 2310.

Sugar (May) - Nowhere close to proving itself

Technicals: The Trend Trading system established a short on March 2nd at 13.81 and the buy stop is at 12.11


OTE Unrealized Profit/Loss: $3841.60


Previous Session Bias:Bearish/Neutral

Resistance: 10.95(18 EXPMA)***, 11.91****(40 EXPMA)

(EXPMA = Exponential Moving Average)

Pivot: 11.32**** Parabolic stop and reversal

Support: 10.02 (Critical Support)***,9.87**** (downside objective - Market came close - traders should be trailing stops)

200 DMA: 12.88

Fundamentals: Market is in a coiling chart pattern and more of a coin toss than anything. The key market Crude Oil is not giving it any love. We are going to have to wait for a long and ratchet stops lower because from my experience when the market is unable to continue its direction often times it makes a sharp reversal and an OPEC+ agreement could set a new tone.

Previous Fundamentals through out the previous week below

Tuesday - Market is in an aggressive downtrend and trying to have some kind of recovery bounce however crude oil and energy prices are the biggest headwind. Look for other opportunities in different markets before taking a stab at the long side. If your still short TRAIL STOPS.

Monday - Market continues to try and take cues from the Oil market and U.S. equities. Non-Commercials continue to liquidate longs with 38,376 long and a reduction of -10,963 last week. Expect them to fully liquidate when its too late and a bottom comes in. Trail stops on shorts.

Previous week:

Finally something that may turn this market around. It did come close to hitting my objective. With Saudi Arabia and Russia cutting 10 Million barrels per day in crude oil production we may see some new demand for ethanol.

The market is tracking equities lower and now expecting a global surplus due to the weaker demand outlook.

Coffee (May)

Technicals: The Trend Trading system established a Long on Mar 23rd at 121.25 and the sell stop is at 106.72


OTE Unrealized Profit/Loss: $-506.25 (The trade was up substantially with the high equity being on March 26th at 130.65. This was a gain of $3525 and remember as a rule of thumb you should never give up 70% of your meaningful equity.)


Previous Session Bias:Bearish/Neutral

Resistance: 122.45 (Previous recent high)***, 130.65 (break over this level would threaten 145!)****

(EXPMA = Exponential Moving Average)

Pivot: 129.30*** Parabolic stop and reversal * warning shot to the longs, this flipped from below to above last Friday's session

Support: 117.20(18 EXPMA)*** 115.23(40 EXPMA)**** we are now just above these critical support levels

200 DMA: 111.10

Fundamentals: Wednesday - Forget toilet paper, I need my Coffee everyday. The market is so close to breaking back out for a test of 130 it just needs that push over the recent consolidation. Don't chase it though, if you try and front run the breakout you might find yourself treading water as the consolidation may go on for longer than you hoped for.

Previous fundamentals:

Tuesday - Market is choppy to higher and could have another shot at the recent highs this week. The supply/demand story has picked up where grocery demand is quite high while coffee shops globally should continue to slowly come online.

Monday: Tighter supply on hoarding done because of supply chain issues. Columbia's production came in well below last year this time. Watch for choppy action in the coming weak.

Previous Fundamentals through out the previous week below

Market remains volatile, questions surrounding Luckin Coffee's sales figures after that stock collapsed yesterday, trading down to $3.74 a share. Feb coffee exports were better than last year. Maybe everyone is sitting around drinking coffee and stocking up rather than hitting up your local Starbucks?

End users are grabbing more inventory than necessary (stockpiling) in order to ensure product for consumers. Watch out for supply chain issues from Brazil hence adding support.

The market has had better supply/demand fundamentals with Starbucks coming online in China and with most U.S. operations still running a takeout system, it appears that coffee still has a good backdrop.

If your going to play this market, it is somewhat choppy and the Average True Range is 6.85. This means that on the average day the market should move 6.85 X $375 = $2568.75 so be careful.

Orange Juice (May)

Technicals: The Trend Trading system established a Long on March 20th at 105.70 and the sell stop is at 102.73


OTE Unrealized Profit/Loss: $60.00 (well off the high equity, you should have trailed the stop and most likely be out of this trade already)


Previous Session Bias:Bullish/Neutral

Resistance: Waterfall Chart: 121.25(Recent Swing High)***, 131?!?****(blow off top from March 18th 2019)

(EXPMA = Exponential Moving Average)

Pivot:119.98**** Parabolic stop and reversal * this flipped on Friday from below to above so a warning shot to the longs.

Support: Blowing through support levels and ignored the FibR level of 107.35 (50% retracement from recent high to previous low)*** Now this is the only close in support 103.18*** (200 DMA)

200 DMA: 103.18


Previous fundamentals:

Tuesday - This truly was the virus safety play, everyone rushed to buy all the vitamin C they could and now that the virus seems to be passing the grocery stores are back to having OJ on the shelves. Hopefully, traders were able to get out closer to the high equity or one of the key Fib retracements.

Monday: We maybe approaching peak virus demand as shelves are being restocked. If you are long this market, Trail your stop and or use a close below the 50% retracement as a risk management plan. Remember easy come easy go and markets tend to fall twice as fast as they rise.

Good luck and good trading, Phillip Streible Chief Market Strategist 312-858-7303

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