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Currencies and Risk of Default Pressure Cocoa Prices

Posted 12/07/2017 2:34PM CT | Peter Mooses

Six straight down days in the March cocoa contract have traders questioning where we will find support. Thursday’s session may have found a bottom around 1880, but will cocoa reverse going into the weekend. Ivory Coast’s production situation could help a recovery after this short-term downturn. Long liquidating took over the market this week, keeping the bulls on the sidelines temporarily. A weaker Euro and Pound have traders concerned about global demand again.

The concern of financial issues involving exporters haven’t helped the cocoa market either. Will Hershey build a plant in Ivory Coast? – What will this mean for grindings and prices? These questions will create volatility and large swings in the market for the remainder of the calendar year.

Cocoa Mar ’18 Daily Chart

Cocoa Mar '18 Daily Chart

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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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