RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Softs

Demand and Fund Buying Moving Cocoa Futures Higher

Posted 02/07/2019 7:32AM CT | Peter Mooses

Bulls in the cocoa futures market have waited patiently for the demand of the soft to improve. Over the past few sessions, the patience has paid off. Longs have re-established their positions as funds have also increased purchases. Production levels have been able to cancel demand increases in the past though as they have washed each other out. The market has quickly gone from oversold, to a buying opportunity. Currencies must be monitored, as the dollar has gained strength while the euro and pound have weakened. COT reports have shown increases in the longs, if traders continue to believe prices should be higher look for this continued path. Global markets are still a concern and key factor adding to volatility across all commodities. As we approach the March roll in the futures, traders will monitor if longs re-establish in the May contract. With resistance broken at 2255, look to see if the market can move and close above 2285. In a market that many traders believe should be trading near 2400, watch to see if supply/demand is enough to support those levels.

If you would like to learn more about softs futures, please check out our free Fundamentals of Softs Futures Guide.

Cocoa Mar ’19 Daily Chart

Cocoa Mar '19 Daily Chart

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Peter Mooses

Senior Market Strategist
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.
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