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Agricultural

Comeback Coming in Cocoa

Posted 05/15/2022 7:38PM CTPeter Mooses

Daily Chart

By Peter Mooses

July cocoa continues to be pressured. The recent decline in the US and European equity markets has hurt the demand side of the equation for the soft. The Dollar and British Pound have also shown weakness adding to the downside trend. Supply concerns from West Africa could provide support though. The regions arrivals are behind last season’s pace. Ghana specifically is behind by over 30% according to reports. Ivory Coast is also having production issues – which should help prices move higher in the futures market. Weather patterns in the near-term appear neutral.

Technically, the 2425 level in the July contract should be monitored, a dip below this could have the market headed to 2350. Many traders may be looking at this as a buying opportunity. If the equity markets and currencies recover, it should carryover to the soft market. A reversal in these outside factors should have cocoa prices move closer to 2600 in the near-term and up to 2800 as we approach the summer months.

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.