December Cocoa, Not So Hot

August 31, 2016 6:59AM CDT

Cocoa is now in down trend.  It has found resistance at 29.12 and above then above at 29.42.  A close above 29.75 is needed to rekindle Bull forces.  Technical indicators and price movement have 28.25 to  28.00 as attainable targets.    The markets slide over the past few days is also contributing to cocoa’s weakness.   Dollar strength also helps the bear camp.   MACD and Stochastic momentum indicators are both moving lower and are approaching oversold territory.   This may accelerate a turn up if a divergence occurs between the futures price and the indicators.

Ideal weather in West African growing areas will benefit the current crop.   This will change the past week’s outlook on a light harvest.   Improving weather will also alleviate any fear of rot.  Along with increased possibility of a good crop, now comes demand issues.  Hershey’s deal has fallen through with Mondelez, this will slow demand, which in turn will weigh on cocoa prices.

Cocoa Daily

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.