David Fuller's view
Soft commodities - Soft commodities have almost all experienced technical deterioration over the last few months. While stock markets have for the most part rallied, this has not occurred with most soft commodities. From the perspective of the wider global economy this can be considered good news since inflationary pressures should moderate. Additionally, international food companies are unlikely to have to lower prices so their margins may also be flattered.

Corn has returned to the lower side of the yearlong range. Wheat has returned to test the upper side of the underlying base. Oats have posted a progression of lower rally highs since February. Rough Rice has pulled back into the underlying trading range. Soybeans broke below the October low three weeks ago and has failed to rally. Cocoa continues to extend its medium-term downtrend, has fallen for the last five consecutive weeks and is becoming increasingly oversold. Arabica coffee peaked with a weekly key reversal in May and continues to exhibit a downward bias. Robusta coffee rallied to test the 200-day MA but encountered resistance in that area this week. Sugar broke its medium-term progression of higher major reaction lows three weeks ago.

All the above commodities have experienced technical deterioration. A number are becoming overextended in the short term but upward dynamics will be required to check momentum while breaks in progressions of lower rally highs will be needed to help restore investor confidence.