Coffee is trading higher for a third day, with KCH4 approaching the January 7 high at 122.6. Unseasonably higher temperatures and dry weather in Brazil's growing area has been a bonus, and has triggered short covering by hedge funds. Robusta coffee (RCH4) has been supported by lower shipments from Vietnam and Indonesia.
Sugar (SBH4) has been supported by short covering after reaching an oversold condition. The contract is currently stuck between 14.70 and 15.15 cents per pound.
Silver is leading the precious metals sector lower after breaking recent lows. Momentum is negative but short-term it is reaching oversold conditions. The December lows between 18.90 and 18.80 are now providing the next level of defence.
Gold has failed to benefit from the unrest in EM currencies and, following today's stronger-than-expected US GDP, the downside is being tested once again in response to higher stocks and bond yields.
Natural gas (NGH4) is giving back half of yesterday's gain as the cold weather conditions, which have driven the price up sharply this month, are forecast to improve over the coming week.
