Softs

Cocoa, Covid, and Candy Sales

Posted 08/07/2020 8:19AM CTPeter Mooses

As the summer starts to come to an end, we look ahead to fall activities and holidays. Will the demand for cocoa be down due to Covid and classroom closures? What will Halloween look like in the U.S.? All these unknowns have investors guessing on what earning will be for the major chocolate/food companies. If data comes in better than expected look for the cocoa recovery to continue.

Demand has been the weak link for cocoa prices, but now it may be turning around slowly. Production news has been coming in bullish, technically cocoa continues to close above the 200-day moving average and the currencies are supporting this recent move as well.

Weather premium may also come into play supporting these new prices in the futures as key growing regions have reported lower rainfall totals. Traders should monitor the charts and resistance at 2585 in the short-term.

Cocoa Sep ’20 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.