Cotton (CTY00, Cash Index): Despite the Index posting a bullish spike during March, I’m going to call the major (long-term) trend sideways between 61.07 (July 2024) and 67.93 (November 2024). Theoretical Positions: Long-term investors are likely on the sidelines in cotton at this time.
Coffee (KCY00, Cash Index): The Index continues to tease bearish reversal patterns without actually confirming a new major downtrend. Theoretical Positions: Long-term investors could look at going short coffee. The risk is the market remains fundamentally bullish, as indicated by the continued backwardation (inverse) in the futures forward curve. If shorts are established, sell stops would be placed above February highs (depending on which futures contract one uses).
Cocoa (CCY00, Cash Index: I’m not seeing a clear trend on the monthly chart for the Index. Meanwhile, the futures market’s forward curve remains in strong backwardation beyond the nearby March issue indicating a long-term bullish supply and demand situation. Theoretical Positions: Long-term investors are likely on the sidelines in cocoa.
Sugar (SBY00, Cash Index): It could still be argued the Index is in a major uptrend based on the bullish spike reversal completed in August 2024 and again in January 2025. Given the latter had a low of 17.75, above the former’s mark of 17.57, it could be considered the bottom of a Wave 2 selloff within the major 5-wave uptrend pattern. Theoretical Positions: Long-term investors may have gone long the sugar market, futures or Exchange Traded Funds (ETFs) near the August 2024 close before adding positions near the January 2025 settlement. If so, sell stops would be below the January 2025 lows.
Orange Juice (OJY00, Cash Index: The monthly chart looks like something we’d see with natural gas (aka the Widow Maker). That being said, OJY00 did complete a bearish spike reversal at the close of September 2024, confirming a move to a major downtrend. Theoretical Positions: Long-term investors might’ve gone short the futures market near the September 2024 close.
