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.

Cocoa Dec ’20 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.