Softs

Cocoa Grindings and Coronavirus

Posted 04/24/2020 7:47AM CTPeter Mooses

Cocoa futures have some fundamental news this week that normally would be strong enough to move the contract. European grinding data came in higher than estimates, causing Wednesday’s trade to see the July contract in the green. Traders were thinking the range would 2-4% lower but the European data came in up .9%. Asia data also came in above estimates, bullish for futures, but the market didn’t react that surprised. N. American data came in inline; all three of these should have had prices closer to 2400, instead the global uncertainty still has control of all markets.

Demand will remain weak in cocoa as most of the world remains in some form of a “lockdown” or restricted from the “norm.”

As the world continues to learn how to live in these times, commodities are trading off one main economic force, supply and demand. This seesaw is not giving the markets much to work with. Supply chains are obstructed, bullish prices, demand is lower, bearish prices – this equals rangebound trading sessions in cocoa most days.

Cocoa Jul ’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.