Looking at a December cocoa contract, traders see the gap formed earlier this week – will that be filled? As we approach the weekend, Ivory Coast’s Presidential election is set to take place. Many people are anticipating political unrest and potential boycotts. As this occurs and supply issues arise from port closure or disruptions, prices continue to move lower.
The eurocurrency remains weak as lockdowns take affect in certain regions. Relief doesn’t appear close to an already demand dependent cocoa market. As new measures are put into place in Europe, demand continues to weaken as we head into a key time of year for the cocoa market. Typically, data from corporations show a boost in demand over he next few months, not during a pandemic though.
The U.S. Presidential election has the global markets on edge, waiting for the results next week will be sure to add movement commodities. Fundamentals will vary from day to day over the next week, but technical levels may hold, look at option strategies to gain limited exposure to the market during an uncertain time.