Cocoa futures prices are feeling pressure from multiple sources. Grinding data is being released this week – most traders are anticipating levels lower than last year at this time. Demand is a continued issue for cocoa as we move closer to the holiday season. European markets have also shown a weaker currency and equity trade – adding to the global pressure this commodity is facing.
Technically, the December cocoa chart looks bearish, but oversold. Look for support to hold at these current levels. The market should be strong enough to hold above 2335 even after all the grinding data is released this week. Look for opportunities at these levels, a positive earnings reports or weaker production data can send prices back above 2500. As we get closer to the US election and closer to year end, look for continued volatility across the board.