Last Week's European Commodity Winners
Robusta Coffee 10-T (RMH25), +4.92%
The global Robusta coffee market is experiencing supply constraints and sustained high demand. In Brazil, the Brazilian Institute of Geography and Statistics (Ibge) forecasts a 3.4% increase in Robusta production, reaching 17.6 million bags for the 2025/26 season. However, the country has adverse weather conditions with predictions of reduced output next year.
Top producer Vietnam will soon celebrate the coming Lunar New Year, which will reduce supply activity by the end of January.
Prices are above the 10, 20, and 50-day exponential moving averages (EMAs) in a strong bullish signal. Last week, the 50-day EMA (at 3,835) was tested 4 times, but could not be broken. This remains a reliable entry point for long traders. At current levels, a next target is 5,500 and traders can ride a dynamic support level at the 10-day EMA if candles keep rising.
The forward curve shows a sharp decline in the rest of contracts through 2025, which at some point should contain the latest bullish move.
Aluminium Hg 3M (Cash) (P4Y00), +4.39%
The Trump administration might impose tariffs of 25% on aluminium from Canada and Mexico, and the EU is considering fully banning Russian aluminium. It is not clear this will happen or for how long, which adds to the uncertainty and volatility.
Stocks of aluminium on the LME, while still far from the record low of 273,325 tn (set in August 2022), are in sharp decline since June 2024, with the latest inventories at 606,875tn as of Jan. 20. Declining stocks are correlated to price increases, among other factors.
LME futures and options fund net positions are positive and growing since August 2024, which is a bullish signal, with 83,877 contracts as of Jan. 10.
Technically, the contract is well above the 10 (2,591), 20 (2,574), and 50-day (2,573) EMAs. The last three candles formed a "three white soldiers" pattern, reinforcing the bullish case. The contract now faces tough resistance at 2,690. Watch out this week if this level is broken upwards with a full candle, as it will signal a very strong momentum.
Euro Stoxx 50 Index (FXH25), +4.14%
The European index had an impressive week, bolstered by positive economic data from China and lower bond yields across European bond markets. A recovery of the index might continue if Trump's possible tariffs do not show any concrete implementation in the EU in the coming days.
A key factor is a drop in the German 10-year yield (from 2.63% to the current 2.5%), which is supportive for EU stocks.
The index has just broken a key psychological resistance at 5,100, which was in place since April 2024.
Last Week's European Commodity Losers
VSTOXX Futures (DVG25), -9.74%
Volatility in EU stock markets fell sharply last week as the result of a recovery in the European bond markets. The VSTOXX has historically found resistance in the 21-22 area, and this was another such case. Statistically, levels below 13.50 present very good entry points for long positions.
White Sugar #5 (SWH25), -4.45%
Prices are at their lowest levels in 3 years. India allowed the export of 1 million mt until the end of September 2025. There are surplus stocks there, and domestic prices have been under pressure.
Having said that, total production from India is estimated to decline to 27 million tons, falling short of the country's annual consumption of 29 million tons, according to Reuters.
The contract has been in sharp decline since the start of December 2024. Current prices are well below the 10, 20, and 50-day EMAs, and were last seen in September 2021 - suggesting a bottom may be near. Long traders should keep an eye for a possible entry.
The daily RSI marks 29.55, which is in "oversold" territory - another reason for long traders to start looking at this contract. The forward curve shows a “bottom” at 462 in the September contract.
Crude Oil Brent (CBH25), -1.37%
With U.S. President Trump announcing plans to fill up strategic reserves, increase production, and ramp up oil exports, prices will be under pressure.
On the bullish side, Biden-era sanctions on Russia could reduce supply by 1 million barrels per day. However this may not stop prices from falling if Trump implements the production expansion in a context of the new ceasefire in the Middle East and possibly in Ukraine.
The Brent contract is above the 10, 20, and 50 EMAs, marking a sharp uptrend initiated the first week of January 2025.
The $82.50 level proved to be a tough resistance to break, and the last 3 sessions have seen declines. Long traders should watch the 10 EMA at 79.47 as it has been a reliable entry point. Prices breaking down below the 10 EMA should be supportive of short positions, given the current fundamental scenario.
