May cocoa futures have had a volatile week as we head into Friday. Bearish supply news earlier in the week out of Ivory Coast caused the market to move lower – but the futures found support from the possibility of a stronger demand outlook. With a weaker euro and pound though, the market wasn’t able to run with the demand news. If the May contract can stay above 2245, look for buyers to re-enter the market. A new trading range appears to have been established between 2240 and 2360. The trendline forming from December 2018 up to today’s close could help the market to recover. That line has been supportive over the past two months. If the May contract can also close above the 9-day moving average, a reversal could occur. The COT data tomorrow will provide some direction for the short-term.

Cocoa May ’19 Daily Chart

Cocoa May '19 Daily Chart

If you are interested in learning more on the softs market, please check out our free Trading Softs Futures Guide.

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.