The recent turn in the equities has taken control of the global markets causing further volatility, as stocks sold off, and some commodities followed. The currencies also tried to make sense of the recent moves – euro and pound found some strength, as did the dollar. The currencies will be a critical watch as we wait for grinding data and some guidance in the demand outlook from the key regions, North America, Europe and Asia. It does appear that most traders are anticipating demand to rise overall.
Weather in Ivory Coast has been favorable for growth. A little rain with dryer weather could help production this time of the season.
As we wait for the grinding data, European third-quarter results are set for October 15th – we will keep an eye on the technicals for short-term trades. The North American data may disappoint but the Asian grinding data has not released a negative result since 2015 so the market could find support and a rally higher over the next few weeks.
Cocoa Dec ’18 Daily Chart