Technical Consolidation, Currencies and Supply Concerns for Cocoa Futures

January 31, 2018 3:56PM CST

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


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

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

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.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.