July ’19 cocoa futures break sharply lower with volatile US/China trade talks and the potential for trade conflicts between the US and EU. US/China talks have been a significant factor in many markets lately and have been wreaking havoc on charts and taking trader’s psychology on a roller coaster ride. If the US/EU enter conflict on trade this could decimate any cocoa confidence as Euro zone grinders make up more than 1/3 of all global cocoa processing.  Possible issues with supply and potential marketing cooperation from the world’s two largest producing regions (Ivory coast and Ghana) have been supporting factors but depleting confidence and increasing demand concerns may prove too strong. At the time of writing that the price of cocoa has briefly pierced down past consolidation lows but is recovering. Volatility is expected but technical factors indicate we could be close to a breakout and it’s time to start paying close attention.

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.