On the 16th, after European grind data came in bullish, reporting a number of 3.3% against an expected 1-3% rise – prices had a volatile day. After a move higher, the market sold off – overbought techinals pushed prices even lower. 2314 was touched, the lowest level reached after the recent rally. Since the ECA started recording data in 2000, this week’s first quarter level is the highest to start a year.
Asia reported grind data at 9.5%, well above the 3-5% range that traders were anticipating. Economic data in this part of world also remains supportive for a move higher in commodity prices, especially in cocoa.
Port arrivals in Ivory Coast continue to come in high and weather in the region remain bullish for prices. Lower rain falls, dryer weather have producers concerned about output levels. Ghana’s production levels may also come in down, as expectations are being lowered.
Technically speaking, overbought levels have been reached, but with the recent demand news, grinding numbers are very positive for prices to remain at these levels or higher. If the market can erase the loses put in on the 16th look for the chart to continue its path. Also, with continued cuts in production levels in West Africa, look for prices to test 2450 in the July contract.
Cocoa July ’19 Daily Chart
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