Softs

Brexit, Currencies, and Cocoa Supply/Demand Support

Posted 03/15/2019 7:36AM CTPeter Mooses

Initially, after the UK Parliament decided not to put a deal in place for the Brexit and delay it for another 3 months – the currencies mainly affected by this decision, the Pound and Euro moved higher. The risk tone was lowered in the UK and Europe leading to traders taking this news as a possible positive for the demand in cocoa. This demand idea was countered by the supply levels anticipated in West Africa, which provided a bearish feel. These two sides created a trading day which left us almost where we started the session.

Technically, now we must watch the 9-day moving average, a continued close above this level will help this short-term trend to continue. For this market to gain some follow-through, a close above 2265 is needed over the next few days.

Traders will now monitor the COT data release Friday as well as the upcoming grinding data. These releases should give us more guidance on the demand in the soft.

Cocoa May ’19 Daily Chart

Cocoa May '19 Daily Chart

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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.