Softs

Cocoa Supply, The Weaker Euro, and The U.S. Debt Ceiling

Posted 10/08/2021 8:50AM CTPeter Mooses

As it appears the U.S. will extend their debt limit in the coming days markets are finding support. We’ve seen volatility in the global markets over the past week stemming from debt concerns, weakness in the Euro and split news about the progress in the battle against Covid. As more individuals get vaccinated against Covid, it appears numbers in cases, hospitalizations and deaths are headed in the right direction – but this depends where you are looking. There are still many parts of the world struggling to recover physically and economically after the past year and half. As we enter the fall and winter seasons and holiday season, we’ll see what the trajectory is of the virus.

The equity markets, both European and U.S. have provided strain on commodities. Cocoa has managed to stage a rally earlier this week, trying to hit a new high of 2800 – but we have seen a big pullback the past few sessions. The key for the bulls is if production will really be lower than anticipated. This key will guide the cocoa market to start Q4.

Cocoa Dec ’21 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.