After four strong trading sessions in the December cocoa futures, the contract took a pause and pulled back to the 2230 support level. Although most signs point to the potential of more upside, 2280 provided resistance technically. Demand seems strong after the European and Asian markets moved higher this week. With China trade talks seemingly back on, the U.S. equities also rallied. Brexit talks have added volatility to the currencies. The British Pound and Euro have strengthened, providing a push for cocoa prices. Production levels in the new calendar year will be monitored – will current weather conditions affect the longer-term output? West African weather fronts are supposed to produce substantial rain in the near term. Ghana and Nigeria are already dealing with disease in their crops, these patterns could add to the damage. As we approach the weekend, COT data could provide some insight on how traders are positioning themselves as we head into the final quarter of the year.

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.