Cocoa continues its recent downtrend, and this trend was accelerated after Chairman Powell announced a rate hike would come sooner than expected for the US. All markets appeared to take a hit after this announcement. Many agriculture markets were hit the hardest.
Cocoa futures dropped to test the lows put in early this year. The weakened Euro and Pound versus the Dollar hurt the potential of a short-term recovery in the demand for cocoa. Although vaccinations continue and restrictions are lifted, the demand for chocolate has not returned strong enough. Grinding data will continue to be critical.
Weather is also bearish in Ivory Coast. Rains have moved in and have helped the crops which may produced higher output.
Continue to anticipate a stronger global recovery as we head into Q3. If that occurs, look for cocoa prices to head back to 2500. For now, the day to day trade will continue to be volatile and based on macro data.