May cocoa futures continue to move lower as fear grows that the coronavirus outbreak could continue to get worse. Until a vaccine is in place, which could be six weeks away, the threat of a growing number of cases will continue. The virus could impact the demand of the soft in Europe and Asia. Grinding data will provide guidance as it is released.

In the short-term, the euro and pound have stayed strong, providing some support to prices. On Wednesday, the May contract found support at 2725. As news breaks, the technicals could be pushed to the side and have little impact on trading.

The weather in West Africa will also be monitored, light rain is expected in the near-term, but this may not affect prices if the accumulation remains minimal.

Traders will need to look at positions on a day-to-day basis since the future is unknown of how large the number of the coronavirus cases could get.

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.