The cocoa market was silent overnight, finding support from higher financial markets.  If global markets see calmer conditions and risk sentiment starts to improve, then cocoa has a higher probability of regaining a bull trend.  May cocoa finished last week down 25 points.  Although risk appetites showed some improvement going into the weekend, continued weakness in the Euro and British pound played a key role preventing cocoa from finishing in positive territory.  Ivory Coast production forecast comes in at 1.9 million tonnes, which is in-line with last week’s Reuters survey and would represent a 6% decline from last seasons output.  Keep in mind that out of cocoa’s largest producing nations, only Ecuador is showing signs of improving on last season’s output totals.  Cocoa saw a sizable increase in its net spec long position, which could fuel long liquidation if risk sentiment turns negative again. 

West Africa’s dry season is getting stronger, upcoming Ivory Coast port arrivals total should start to lag behind last season’s pace.  Support comes in at 2029 and resistance at 2127.

Cocoa May ’18 Daily Chart