Commodities have been controlled by the Evergrande debt situation the past week or so – adding to an already volatile market. Each commodity has been affected by this situation in its own way. Cocoa has pulled back due macro uncertainty from China. Asian demand has a big affect on cocoa this time of year. As we head into the final quarter, cocoa demand has slowed in recent years. The slowdown during Q4 has mainly been due to the pandemic, there has been less chocolate consumption due to shutdowns and slowdowns.

A few key things to watch – N. American and European demand and weather in West Africa. If production and supplies continue to look like an issue, cocoa prices could end the year around 2800. The next few weeks should be telling, we’ll get more information about the current state of the global economy and see how Covid numbers look as vaccine rollouts continue and people try to continue to the new normal.

Cocoa Dec ’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.