
With global uncertainty, trade wars and volatile currencies – all commodities and stock sectors have had a rough week. Cocoa futures are no different. Cocoa futures’ prices are down again, 12 straight trading days. This market has formed one of the most bearish charts in commodities. Is this a good buying opportunity? Now, it is hard to tell, not only have the outside factors created this spiral lower, but cocoa fundamentals are weak too. Demand is a concern; volatile Asian markets are not helping this. Cocoa arrivals are leaning on the move lower as well. Uncertainty in cash prices in Ivory Coast and Ghana are also pressuring the cocoa market. As September options reach expiration and the September trades in its final weeks, look to see if the market holds above 2200. If it holds, buying opportunities in the December contract should form.
