Cocoa is finally off to the races

October 20, 2017 12:19PM CDT

I start today with a widely used phrase, “All good things come to those who wait”. I am overcome with the idea that the cocoa market has branded this on the mind of all of those who have been waiting since April for the market to collect itself. If you have been following my articles, you will find that I am also part of the group elated by the idea that we have finally found a pattern, a trend, you can call it anything you want. Cocoa finished around 80 points higher yesterday on expectations that the North American and Asian grinds will illustrate continued growing demand for the sweet confection.  

The goal of the market for some time now has obviously been to breakout of its sideways range. In order for one to believe this has taken place, we urgently needed a break and settle above 2100. Now we have had that a couple of times, but yesterday's close was the strongest close in almost a year. I am confident that if the grind numbers continue to grow, eventually the possible deficits in 2018 may continue to aid in higher cocoa prices. I will continue to warm the trade to be aware of both currency and stock index volatility. The two have a great deal of negative pull on cocoa, especially when the indexes start falling hard in value. 

 

Dec '17 Cocoa Daily Chart

Dec '17 Corn Daily Chart

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