Softs

Lack of Demand in Cocoa Leads to Consolidation on the Futures Chart

Posted 09/13/2018 10:29AM CTPeter Mooses

The December cocoa contract continues to try to find its way but cannot gain traction in either direction. The supply concerns are not strong enough to overpower the lack of global demand for the soft. With wet, damp conditions in key growing regions and the concern of black-pod disease on the rise – which should lead to higher prices, trading ranges continue to tighten. Volatility in emerging markets are also hurting cocoa and adding to the risky sentiment felt in futures.

Technically, a close above the 9-day moving average, continued closes above 2350, mixed in with short-rally’s in the pound and euro – cocoa could be in line for a recovery and new trading range. Until we know if grindings will hit records we won’t know the longer-term trend for the market. Traders are taking a wait and see approach as we are heading into the last quarter of the year.

Cocoa Dec ’18 Daily Chart

Cocoa Dec '18 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.