July cocoa continues to move lower the past few sessions. Traders have experienced a choppy few weeks of trading after a small “V” in the chart. Demand is slightly on the rise as more easing occurs in the U.K. and the U.S. As more vaccinations are administered, there appears to be an increase in demand for many commodities. Cocoa in particular, should see a rise in prices, especially later in the year as we head into Q3. Inflation is also a huge question for the U.S., this will have an impact on commodities and how they react to their natural day-to-day fundamentals.

For now, continue to monitor the Pound and Euro and see the correlation work its way into the cocoa market. Weather premium is also something to watch in the near term, mainly the lower than normal dry spell in West Africa. There is already a robust supply from last year and with a weak demand tone, prices may move a little lower before we see the real recovery take place.