Technical Trade Leading Cocoa Market

January 25, 2018 11:07AM CST

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

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.