NY futures were on a rollercoaster ride, but in the end March closed the week just 200 points higher at 148.12 cents, while new crop December dropped 95 points to close at 95.80 cents.NY futures were on a rollercoaster ride, but in the end March closed the week just 200 points higher at 148.12 cents, while new crop December dropped 95 points to close at 95.80 cents.

It was yet another historic week, with March setting a new all-time high at 159.12 cents on December 22, although intra-day prices based on spreads were trading as high as 166 cents. The spot month finished every session of the week with a limit move - three limit-ups followed by two limit-downs.

Technical traders seemed to get more excited by what happened after the March contract jumped to a new historic high. Because the market left gaps on the chart that isolated the record-setting session of December 22, it formed what's called an "island top reversal", which is regarded as a rare and powerful reversal pattern. It often serves as a good indicator of a primary trend change that provides a 'tradable top'. Reinforcing this island reversal is the fact that it coincides with what looks like the beginning of a double top on the longer-term chart.

So we currently have bearish technical forces clashing with a bullish fundamental scenario and session serves as a great example of this struggle. After overnight selling had forced the March contract limit down, a surprisingly strong US export sales report (over 400'000 bales of Upland and Pima combined) emboldened buyers in the morning and as a result the spot month rallied by over 700 points in a little over an hour, only to see renewed spec selling knock it back down again.
POST: 2024-11-25