Each of these three ”tropical’ commodities has made bottom extensions lately:
The cocoa price has been falling from a prior range that held for two and a half years, so a bounce could take it back up to the bottom end of that range at around 2600. Coffee has dropped from a sharp peak at about 180 four weeks ago (and a top extension) and is probably now cheap by any measure while sugar is in a bull market that started in July 2015. Each has potential to rally and the choice is yours. We would choose to buy sugar first and cocoa second but would wait for some signs of an end to the current weakness before buying cocoa – it’s falling fast. Sugar looks as though it has already turned around. Both sugar and cocoa are in a situation of low world inventories (ass far as we can tell) after a period of tight supply. Coffee supply doesn’t depend so much on stocks but on weather.
More soon on equities.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
