Softs

Technical Trade Leading Cocoa Market

Posted 01/25/2018 11:07AM CTPeter Mooses

After disappointing data from last week’s grinding info, March cocoa futures have consolidated. Asian grindings missed their mark; North American data continued on a negative path. Currencies are attempting to provide support for cocoa. A slipping dollar, a rally in the pound and a strong move higher in the euro may be what is needed to get the March contract back above 2000.

Technically, 1925 had been support – 1950 is the near-term support and 1995 is resistance. Although we are in a consolidated channel, the move is slowly moving higher.

Barry Callebaut’s quarterly results showed an 8% sales growth – this is well above expectations and can help the demand outlook in cocoa.

Closely monitor demand data from North America and Europe in the short-term to see if the technicals can get some support and assistance from global demand – these two moving pieces can help get futures prices back to the 2100 range as contracts will begin to move from March to May next month.

Cocoa Mar ’18 Daily chart

cocoa_mar18_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.