Softs

Technical Consolidation, Currencies and Supply Concerns for Cocoa Futures

Posted 01/31/2018 3:56PM CTPeter Mooses

As we look at the March futures chart, the market appears to have found a range between 1880 and 2000. Although the contract has not been able to hold and move higher from 2000 of late – global currencies have provided support. Recently, the move lower in the dollar, a move higher in the euro and pound have given cocoa a positive underlying tone.

Supply concerns have surfaced after the ICC and CCC have said that disease and the removal of illegal farms could hurt supply levels and give market prices a boost. The Cocoa Farmers Association of Nigeria also reported disease seen on a large number of trees, adding pressure to supply numbers and providing support for further price growth.

Technically, a hold and close above 2005 is needed to have the March contract have a significant move higher. With first notice day in the futures for the March contract approaching mid-February, traders may have to look to the May contract to establish longer-term bullish strategies.

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.