After a short-term rally in the March cocoa contract, we have seen pull back the past week of trading. The futures’ prices moved back around 2100 Wednesday and closed at some resistance on the chart. As of now, the demand outlook has strengthened. Funds continue to add to long-term positions. Asian demand has also continued to climb. Global supplies appear to be smaller than expected. Last year, Ivory Coast had issues with flooding and the market didn’t really know what their output would be until the end of Q4. If the crop comes in lower – look for prices in the May and September contracts to rise.
In the March futures contract, technically there is support at 2075 and 2100 – buyers have reentered the market at these levels. Resistance was met at 2125 and 2160. With a break in trading Thursday and lower volume, look for choppy trading the remainder of the week into the last week of November. The December trade should bring volatility has production estimates and numbers lead the way into the end of 2017.
Mar ’18 Cocoa Daily Chart