Technical Update - Can Soft Commodities keep soaring?

Commodities 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Soybeans seems to be forming a possible corrective symmetrical Triangle pattern. However, there is divergence on RSI (RSI value is falling where price of instrument is rising) indicating breakout to be to the downside. Rising trend line since December2021 offers some support.
If breaking out bearish and below trend lines strong support is at $1,550 i.e. low of the Triangle and 0.382 retracement.
If a bullish break out a move to around $1,850-1950 is not unlikely.

 

Source: Saxo Group

Wheat went almost parabolic in the first weeks of the war in Ukraine with the Exchange limiting trading on a daily basis. Prices have stabilized somewhat but volatility is likely to remain elevated.

After market opened trading freely we saw a correction down to the 0.50 Fibo retracement at around $1,050. Before next corrective wave down to the 0.618 retracement at around 978.
However, with no divergence on RSI  (divergence is when RSI value is falling where price of instrument is rising) Wheat could very well reverse its current short term (corrective?) downtrend

Source: Saxo Group

Corn seems to be forming a sideways correction, possibly a Descending triangle pattern. KEDy support at $725. Minor RSI divergence indicating support could be taken out. Another bearish attempt could push Corn prices down to strong support at around 678.
However, if the support holds and prices start moving towards the upper falling trend line RSI is likely to break above its falling trend line indicating a bullish break out.

Source: Saxo Group

Coffee is trading in a steep falling channel It seems to be a corrective move following two years uptrend. RSI is showing bearish sentiment with no divergence indicating we could see another attempt at the 210 support and the 200 SMA. If breaking bullish out of the falling channel there will be some overhead resistance with both the 55 and the 100 SMA coming down roughly around 230

Source: Saxo Group

Robust Coffee has found support at the 200 daily SMA testing the upper falling trend line in its down channel.
There is no divergence on RSI. However, break out of the lines drawn on RSI could be a good indicator of the price break out. Will Cotton break above the falling trend line or have another attempt at the 2,000 support

Source: Saxo Group

White Sugar seems to be forming a rising Wedge like pattern inside a wide rising channel. With no divergence on RSI we are likely to see Sugar bouncing off short term rising trend line. However, if lower trendline is broken trend is not reversed unless Sugar price breaks below $518. If that scenario plays out a test of the medium term rising trend line and the 200 SMA are likely to be tested.

 

Source: Saxo Group

Cotton price is extending its now two years uptrend approaching 200% (2.00 Fibo) projection of the latest correction. It could be a short term exhaustive move followed by another correction. However, staying above the rising trend line trend would still be up.
Minor divergence on RSI is not yet confirmed.

Source: Saxo Group

Quarterly Outlook 2024 Q4

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Head of FX Strategy

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Head of FX Strategy

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992