The Softs Pitguru Review
For the week of July 12th, 2010
For the week of July 12th, 2010
The soft markets may receive influence from outside markets, equities and the dollar, yet they have recently provided some movement and thus opportunities. Expect that to continue, but in violent choppy fashion.
Coffee prices have established a wide range, trading between 15685 and 16720 this past week, and settling Friday at 16385. The wide range is keeping traders nervous and the market choppy. And while I fully expect that range to serve as support and resistance until prices either jump over 168 or below 155, even then, stop hunting will fuel volume and another quick 300 points, I still believe that the market has further upside appeal. Having reached that high early Friday, this morning values are under pressure and apt to test last week's low. Fundamentally, there have been no changes, with Brazil's large crop expected to have problems with quality so as to allow differentials to continue to be a focus. Until the market breaks below 155, expect potential on the upside.
Sugar prices dropped late Friday and wiped out the nice rally the market had going. October had traded from a low of 1641 on Wednesday morning to an early 1741 high on Friday, but the price action that followed strongly suggests that the market has found a short-term top. This morning prices are attempting to get back over 17, which if successful, brings Friday's high and 18 cents back into play. Otherwise, sugar will try and build momentum and likely languish.
Cotton has been showing signs of trying to bottom. Friday saw active interest in calls. Although the bigger US crop and weak technicals have kept buyers away. Support ought to be found at 74 cents and resistance at 80 cents, but should 74 give way then 70 cents is the next level to look for. I favor the long side in cotton.
By PitGuru Jurgens H. Bauer
By PitGuru Jurgens H. Bauer
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