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.