Softs Commentary on Jan 21th.
The flow of money is driving these markets. As selling is dominant, prices fall. Then just when they look ugly enough to chase even the most ardent supporter......money flows in....I had been patiently waiting for a pull back below 230-228 in KCH, I got it. Unfortunately, I didn't have the gumption to be forceful enough to buy aggressively today. Perhaps I should have. The recovery was not full, but impressive nonetheless. Other markets among the soft complex behaved in similar fashion, recovering well from pressure.
I am long cocoa and will remain long, even though the market may experience some profit taking. The close above 3140 was solid and bodes well for a move to 3230-70. In early trading 3230 was reached and then a bout of profit taking ensued. I will hold longs. Expected range: cocoa 3190,3220,3270 and 3140, 3103
As for coffee, I now find myself faced with being left to consider what develops. A strong move up ought to threaten and chase fresh bears and could quickly gain momentum. Any effort made to trade over 237 will likely add strength. A move back below 230, while possible, may serve to keep my hands in my pockets. I mention this because I feel I missed an opportunity. Hope not, but with prices already over 235 I cannot help but wonder.
Cotton is higher again and appears to be breaking out of its range. It has always seemed to me a matter of time before cotton prices move to new highs. Unfortunately, I feel unable to partake as I cannot find an option play worth the risk.
Sugar held 30 cents and staged a late rally, closing up on the day. Today look for an expected range for sugar 3158, 3198-3208, 3027-3010, 2996.
Jurgens H. Bauer, Softs Guru