March Cocoa futures rallied into the end of the year and now have tapered off as traders decide their positions to start 2023. Demand continues to support prices. Globally, cocoa demand has been more resilient than other commodities of late and has been able to fight off negative macro data. Cocoa’s own fundamental news has continued to direct the market. Supply is also a concern for 2023 which helps the equation. It seems that exports are moving quicker than production numbers are increasing which will help prices move higher.

The market is reaching overbought levels so there is a concern profit taking could cause a pullback in January. If prices move lower instead of consolidating, look for that as a possible buying opportunity before the March roll comes into play. Traders should monitor the 2650 level, a push above that should have cocoa trading above 2700 in Q1.


Disclaimer: The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that R.J. O’Brien believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

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.