Softs

Big Production Numbers and Activity in the Currencies Leading Cocoa Trade

Posted 08/16/2017 3:34PM CTPeter Mooses

Anticipation of a large crop is back into the picture for cocoa futures’ prices. Cocoa has given back 10% of its value in August thus far. Will these lower prices entice buyers again? Will demand for cocoa in Europe and North America rise? – Those questions have been looming all year but haven’t moved the market. Weather conditions in key growing regions have been good for crop development at this time of the season. Port arrivals in Ivory Coast are close to 1.925 million tonnes compared to last year’s 1.44 tonnes. The recent strength in the Dollar has weighed on most commodities – creating small selloffs. The Euro and Pound have added pressure to cocoa futures too. Look to see if the rally back in the Dollar carries over to the overall commodity market. Will global fears also pressure commodities and equities? There are a lot of unknowns and guessing taking place currently. Look for technical levels to lead the market at times like this. December cocoa is hitting support levels, a reversal may be forming. 

Dec ’17 Cocoa Daily Chart

Dec '17 Cocoa Daily Chart

Peter Mooses

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.