Softs

Range Bound Cocoa Market

Posted 09/28/2017 10:18AM CTPeter Mooses

December cocoa ended Wednesday’s trading session near the high. The contract has been range bound despite the drop in the Euro and the British pound. The German election has brought some volatility to the currencies. As reports come in for the 2018 crop from Ivory Coast and Ghana, we see that news is mixed. Ivory Coast’s wet weather appears not to have affected future crops for now. Ghana’s production and pod development could suffer due to a drier season. Demand in Europe was unable to sustain a recent increase but forecasts show global consumption should be on the rise. If production comes up high for the 2017/2018 outlook, this data could be a wash.

Technically, looking at the chart below, we are sitting at resistance. A break above 2025 and a close at 2060 would push this recent move higher. As the month comes to an end and we receive the COT numbers on Friday, look for cocoa to test 2100. 

 

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.