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Is Consolidation Leading to Breakout in Cocoa?

Posted 08/16/2018 11:04AM CT | Peter Mooses

Recently, cocoa futures have been range-bound, 2100-2200 in the December contract. The currency trade, specifically the euro and pound, have held down prices in cocoa due to their weakness. Supply concerns may be able to push the market higher, above 2200, but with demand always in question we will have to wait and see. Also, global factors and an overall weak market tone has harmed all commodities across the board. The wet weather coming in West Africa is needed due to the previous pattern but shouldn’t be enough to affect prices in the short-term. Until some substantial supply/demand data breaks, look at the techincals for direction. A close above the 9-day moving average and a close above 2150 should help December cocoa breakout.

Cocoa Dec ’18 Daily Chart

Cocoa Dec '18 Daily Chart

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Peter Mooses

Senior Market Strategist
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.
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