Cotton December 2019: The contract closed at 64.86, up 0.14 for the week. Despite another higher weekly close, Dec cotton still looks to be in a secondary (intermediate term) downtrend following the recent bearish key reversal on its weekly chart. However, if the contract continues to rally, resistance is at the recent 4-week high of 65.99. The downside target area is between 62.40 and 60.18, pries that mark the 38.2% and 61.8% retracement levels of the previous uptrend from 56.59 through the high of 65.99. Theoretical Position: 2019 production could be 100% covered against the December contract at an average price near 73.39 (close the week of June 11, 2018 at 82.56 as part of a bearish spike reversal and 64.22 the week of October 28 as port of a bearish key reversal). Those needing to make catch-up sales might’ve priced 25% near the weekly close of 77.19 (week of April 8) based on the bearish crossover by weekly stochastics. I will continue to monitor the Dec-to-March spread for an opportunity to roll Dec hedges forward to the March contract.

Sugar March 2020: The contract closed at 12.73, up 0.16 for the week. March sugar still looks to be in Wave 3 of its 5-wave secondary uptrend, with confirmation of this a move beyond the Wave 1 peak of 12.93 (week of September 30). Last week’s high was 12.91, setting up a potential minor (short term) double-top pattern on the contract’s daily chart. Theoretical Position: 50% of 2019 production has been priced at an average of 13.68 versus the October and rolled to the March at a carry of 1.00. This created March short hedges of 14.68. End users: Those needing to extend long coverage could do so near the recent weekly close of 12.32.

Cocoa March 2020: The contract closed at 2,681, up 183 for the week. March cocoa extended its secondary (intermediate term) uptrend to a new high of 2,692, erasing potential signals of a bearish change in trend from the previous week. Theoretical Position: There are no positions at this time. Long positions (Dec) established near the weekly close of 2,238 (week of August 19), in conjunction with a bullish spike reversal and a bullish crossover by weekly stochastics, and rolled to the March, could still be held.

Coffee March 2020: The contract closed at 109.65, down 3.20 for the week. Dec coffee consolidated within the previous week’s range before closing lower last week. This opens the door for continued pressure in the market this coming week. Theoretical Position: End-users could be long the Dec contract near the recent weekly close of 95.70 (week of October 21). These positions could be rolled to the March, or legged out of by selling Dec near last Friday’s close (106.15) then waiting for a sell-off to buy the March.