Cocoa futures have fallen from the highs we saw mid-month. Currencies have played a major roll in the weakness in cocoa futures. The Euro specifically has continued to move lower which has carried over to the soft, causing concerns that the European demand will continue to be low for cocoa.

On the macro-side, it appears the demand for cocoa is starting to increase. There are also supply concerns that should provide support and could start a quick recovery in futures prices. Weather in West Africa is also very dry and hot which will potentially hurt this year’s crop – causing traders to think that we move back to 2600.

For now, traders should continue to monitor weather patterns in West Africa. This paired with volatility in the global markets, mixed with demand concerns should create an interesting quarter of trading.

Cocoa Mar ’22 Daily Chart

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.