July ’19 cocoa futures crash down after consolidating in over bought territory for most of this month. The major sell-off started slowly at first the night of April 18th with prices trading around $2400 per ton. Since then, cocoa futures have given back a major portion of the gains made during the late march/ early April bull run where we saw prices close higher for 14 days straight. It appears the market has grown impatient waiting to see if supply concerns for the mid-crop are valid and is correcting fiercely. Prices are in danger of a continued decline with market momentum still pushing down. At the time of writing, June ’19 cocoa is trading at $2241/ton and there is a possibility it could continue down to $2175 with bears in near-term control. Caution should be paid by bears and patience is advised to bulls; below average rain fall with continued dry soil conditions on the Ivory coast and crops under threat of “Swollen Shoot Virus” in Ghana could still impact mid-crop harvest and see prices bounce back up.

Cocoa Jul ’19 Daily Chart

Cocoa Jul '19 Daily Chart

Eric Scoles

Eric entered the workforce during the summer of 2007 as an apprentice tradesman just before the big crash and recession which followed. The impact of which strongly inspired his interest in the financial industry and began him as a student of the markets. Eric worked throughout the following years developing strong communication skills and risk management practices in the aviation and marketing industries before ultimately getting licensed and turning his passion into a career as a market strategist with RJO Futures.