Softs

Cocoa, Cocoa and More Cocoa | RJO Futures

Posted 03/01/2017 3:35PM CTPeter Mooses

ICCO projects global cocoa production will hit 4.55 million tonnes, Ivory Coast has a record crop of 1.9 million tonnes and cocoa surplus hits a six-year high – you can’t get more bearish than that. With a steady increase in production the past year and very little demand, futures have not been able to turn around. A once bullish chart has little hope of a recovery at this point. Traders will monitor grindings for some direction moving forward. Europe and North American grindings are not expected to help the trade. Asian demand may give slight hikes in prices but will not be enough support to carrier the market higher. The fundamentals have not offered us any volatility and the technical haven’t been of much help either. 1890 is still support in the May contract for traders looking to buy on dips. A breakout above 1950 is needed to have cocoa head back to 2000. The range created in the second half of February will need to be met and broken to create any long-term change in the market from a technical standpoint.

 

Cocoa 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.