Cocoa Futures – Rally Stalled but Upside Potential IntactPosted 09/06/2019 7:34AM CT |
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.