RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

December cocoa futures continue to move higher as we head into the weekend. The market is trading above 2600 and appears to be building on this recent rally, but for how long? The techincals are at a key point right now, if they can break and hold above 2635, last week’s highs are back in site. The market is feeling overbought though. COT data will show where trader’s minds are after the close.

The fundamentals are telling a much different story. Production numbers are high, demand is still low. If cocoa sees record production data, prices will move lower – possibly retesting 2450 again. If demand stays weak, those levels are very realistic in the short-term. With Covid-19 restrictions coming back into play, numbers surging in all parts of the world and no sign of slowing down, prices in cocoa will most likely turn lower again. Traders should look at puts in the December or March contracts.

Cocoa Daily Chart
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Peter Mooses

Senior Market Strategist
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.
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