As suggested in my comments last week, I predicted that the direction taken will likely set the tone for where the soft markets are headed, not as a group, but rather individually. So in reviewing, Sugar managed to establish a new high, while cocoa prices, after initially moving above 3000, dropped decisively below 2800. Cotton and coffee prices more or less worked sideways, and OJ backed off following a sharp upward spike thought to have been the result of an awkward electronic order. As for outside markets, the dollar moved sideways, US stock prices and crude were lower. So where does this leave us? And more importantly, what can we expect this coming week?

From my view, sugar's positive fundamentals will likely continue to provide support and fuel additional strength as that market receives attention. The correction experienced previously seems over and now SBV ought to move higher. Cotton ought to find support on dips, but I doubt that anything can get going based purely upon the fundamentals. Technically, look for a range between 5600 and 6300 basis CTZ (+/-100). Coffee charts look bearish in my eyes and we could experience a sizable decline, although there is a growing sentiment that values are reasonable at these levels. I'm a bear on cocoa, but what else is new.

Being month end today and expecting an inflow of cash into funds over the following couple of days may lead to some interesting moves. More importantly, be prepared for more appropriate price action as traders return to the fold following vacations.

One last note, although I have always favored the long side of coffee, technically there is a potential diamond formation that could count down to 110 basis KCZ. Such a move would go contrary to the majority of projections by other traders. Not for nothing, but I've done better as a contrarian than following the crowd...

Past performance is not indicative of future results.