Cocoa futures continue to feed the bulls. Supply and demand concerns have led this recent move higher. Will the demand for chocolate continue to prove it is strong enough to support this rally? Will cocoa production data come in lower than expected? Will the fertilizer shortage in Ivory Coast be impactful to cocoa prices? These questions will be answered in the coming months.
For now, the recent strike at the Ivory Coast port of San Pedro has futures headed to 2600. If this lasts long enough, exports will be negatively affected, and beans could be damaged.
Technically, key levels have been broken, 2550 is the next target to monitor on the upside. Cocoa prices have been lower the past few years due to demand issues mainly, but if crops are hurt during these strikes and companies continue to see chocolate purchases up we could be headed back to pre-pandemic cocoa prices. Continue to monitor this current trend the remainder of the week.
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