RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

As we continue a volatile week of trading after the new global variant Omicron was announced, traders wonder how long these trading conditions will last. The moves in the equities the past week look very similar to days we saw in March of 2020 – 500 points lower, 500 points higher give-or-take and repeat. So traders are asking themselves, is this volatility here to stay or will we experience a Santa Claus rally, Friday’s job’s data may provide some direction, at least in the short-term. The cocoa market rallied Thursday, erasing recent loses – following the move in the equities for now.

Demand in cocoa will be a key fundamental to watch. If earnings and demand look positive, cocoa should continue to climb back towards 2600. If this new Omicron variant proves to be a new concern and new restrictions are implemented – fundamentals won’t have control of the market, but outside global factors will be in control.

Trader’s need to also keep an eye on weather patterns in West Africa as the dry season approaches. With the current expectations in the coming weeks, it looks like prices should find support.

For now, traders should take a wait and see approach in the coming days as more news is likely to break on the variant, but solid answers won’t be available till year end according to health officials and vaccine companies.

Cocoa Mar ’22 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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