Cocoa to Remain Range Bound
Supply and demand data has dominated cocoa futures news – higher production, lower prices; lack of demand, lower prices but recently short-term weather premium may have helped the September contract trade and hold above 2000. Technically, cocoa futures seem to be held in a 2020 – 2090 trading range. September cocoa is trading in an area the market has stayed away from since June. Talks of funds having large short positions have kept prices at these recent levels as well. Will more sellers be attracted into the market or have levels hit prices low enough in July that traders and users are buying back in for a long-term trade? Demand concerns continue to loom. Nestle and Lindt have recently given little to no improvement in their outlooks. Weaker Dollar, and stronger Euro prices have also been affecting commodities on a broader level. Softs may also be affected by the recent reports of a change in the head of the Coffee and Cocoa Council, but this may already be included in pricing since defaults by exporters have been on the rise this year.
Sep '17 Cocoa Daily Chart
Peter Mooses
Senior Market Strategist
Follow Peter on Twitter @PMoosesRJO.
Peter's interest in trading began during a college internship with Bunge North America on the floor of the Chicago Board of Trade, where he assisted commodities traders and performed market research and analysis. Upon earning a B.A. in economics from the University of Iowa, Peter served as an analyst, transaction manager and team lead in the Global Trust Divisions for LaSalle Bank and Bank of America, where he managed transaction activity in multi-million dollar client fixed income and asset-backed securities portfolios.
After years in the banking industry, it became apparent that Peter's real passion lies in futures trading. He joined RJO Futures because he enjoys the analytical aspects of futures trading and appreciates the economic impact that commodities have across all markets. Peter believes in utilizing market analysis and trends to help clients achieve balance between risk and return, while always keeping their investment objectives top of mind.
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