Cocoa Sees Pressure from Weak EuroPosted 07/24/2019 2:05PM CT |
September cocoa traded higher to start the week before erasing those gains in Tuesday’s trading session. European demand remains soft with a lower than expected grindings number for the second quarter and a new low in the euro. Asia and U.S. demand remains strong with higher than expected grindings. The market is watching the weather in West Africa’s Ivory Coast growing region where it has been dryer than normal over the past couple weeks which is driving talks that production numbers could falter but there is forecasts of rain and average temperatures over the next week. In the near term it looks as there will be some choppy trade ahead but if global demand remains strong there is potential for a run back to the upside. Resistance comes in at 2500 and 2538 and a close above 2538 would point to a test of the high at 2589. Support is at 2450 and a break of the 2410 level would reverse the trend to the downside.