Last Week's European Commodity Winners
Cocoa #7 (CAZ24), +12.7%
The market is again worried about supply with current 15-year-low inventories in U.S. ports. Although Ghana anticipates a healthy harvest, heavy rains in Ivory Coast are affecting the production for next season.
Cocoa remains in a fading downtrend on a weekly basis, but the last 2 weeks show an interesting pivot pattern in the bars. Weekly bars are below the 10- and 20-unit exponential moving averages (EMAs), so technically nothing has changed so far.
The 4,300 area is acting as a strong support and prices struggle here to fall further. The next move could be a sideways pause or even a reversal if this level holds.
The weekly RSI made a bottom at 37.54 and it seems to be recovering from "oversold" territory.
Watch out if prices break to the upside the 10 EMA for those waiting to go long. This is a strong dynamic resistance with strong selling pressure. Short traders have successfully used it in the last 12 weeks.
Rapeseed (XRG25), +2.38%
European rapeseed consumers benefited from Ukrainian rapeseed exports, which increased 6% during 2023/2024 season. With 3.2M tonnes exported, Ukraine is now the top supplier to the region. China started an anti-dumping probe against Canadian rapeseed, and that is affecting the demand side already.
Rapeseed is showing a "three white soldiers" bullish candle pattern in the last 3 weeks. It has broken above the 10 and 20 EMAs in that period, and during the last 4 weeks, shows buying power.
The next key support is at 510 USD . Breaking it will bring momentum to long traders.
The current weekly RSI marks 61, and is neutral.
Feed Wheat (LWK25), +1.22%
FCTC is reporting reduced net short positions this week across most agriculture contracts. Potential export restrictions in Russia could bring a boost to the market. So far its exports are stable at 1.1m tonnes reported last week.
Feed wheat prices found a bottom at just under 160 (Feb. 19, 2024) and from there they made an impressive recovery. Now they are trying to break the 10 and 20 EMA. This week will define if the current upward move has legs. The RSI at 51 is in neutral territory, so it has the potential to follow with strength any starting trend. The odds favor the long traders for now.
This Week's European Commodity Losers
Crude Oil Brent (CBZ24), -3.94%
If Israel attacks Iran´s oil infrastructure, Brent will see a sharp rise. But the demand is still weak, and OPEC+ alliance will start increasing production from December.
As commented before, the most important fundamental factor is not moving oil at all, which is sending a warning to the market. The escalating war in the Middle East should have sent prices rocketing. On the contrary, they struggle to break the 20 EMA resistance. If broken this week, it will present a good entry chance to long traders.
The weekly RSI marks 48, which shows no clear direction in the last weeks.
Robusta Coffee 10-T (RMF25), -3.73%
More rains are expected in the next weeks after a long drought in Brazil, and this is enough reason for a sharp reversal from the recent all-time-highs.
Vietnam coffee exports for the end of 2023-2024 season are estimated at 25 million bags, down 10% from last year. And for the next season, coffee output is expected to decrease by 5-15% in this country.
With such bullish fundamentals, only Brazilian rains can reverse the mood.
Robusta coffee is coming down from the 5,550 top it made in the last 2 weeks, creating a "Bearish Engulfing" chart pattern. Added to that, last week it broke below the 10 EMA - enough reason for short traders to add positions.
The RSI is following accordingly, as it repeatedly tested the 70 level, and now is coming back in from that "overbought" area.
