Cotton (CTY00, Cash Index): The Index looks to have moved into a major (long-term) uptrend as it took out the April high of 67.42 during June. The Index closed last month at 66.43, also a new 4-month high monthly close. Theoretical Positions: Long-term investors might’ve bought on the move to a new 4-month high of 67.43 during June. If so, then sell stops would be below the April 2025 low of 61.11.
Coffee (KCY00, Cash Index): The Index confirmed a new major downtrend as it fell to a new 4-month low during June. Theoretical Positions: Long-term investors might’ve gone short the market on sell stops below the previous 4-month low of 362.37. The risk is the market remains fundamentally bullish, as indicated by the continued backwardation (inverse) in the futures forward curve. 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 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): The Index extended its major downtrend to a low of 15.60 before closing at 16.19, down 0.91 for the month. Theoretical Positions: Long-term investors are likely on the sidelines. It’s possible some may have gone short near 17.74 as the Index moved to a new low during April, despite the market being long-term oversold.
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 bullish key reversal at the end of April, coinciding with a bullish crossover by monthly stochastics. This means the index both signaled (stochastics) and confirmed (key reversal pattern) a new major uptrend. The market consolidated during May before breaking during June. Theoretical Positions: Long-term investors bought back short positions near the April close of 272.50 and went long at the same price. Sell stops would be below the April low of 211.90. The Index closed June at 215.00, down 70.70 for the month.
