Same story, different day for cocoa futures. Lack of demand continues to pull cocoa prices lower. The chart looks bearish, short-term outlook for demand is bleak. Cocoa futures have found support at lower and lower levels the past week. Although the global vaccine rollout has been somewhat promising, issues overseas has caused concern in the markets. Lockdown measures still in place in some areas as Covid-19 cases rise again continue to hurt a chance of a recovery in cocoa prices. European demand has been weak, chocolate companies continue to report weaker earnings. Continue to monitor prices in the currencies correlated to cocoa, Euro and Pound specifically. For now, traders should follow the technicals. If cocoa finds a bottom on Friday’s trading day, look for a short-term bounce to start the week if the COT data is positive.

Cocoa May ’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.