No New News Leads to More Uncertainty in CocoaPosted 05/23/2018 1:20PM CT |
July cocoa futures continue to make lower lows – no fresh news has led to a bearish market. Long-liquidation, production uncertainty and a quite demand tone has the front month trading near 2600. Will production data be stronger than expected from West Africa? That question has weakened the market. Will the weather also help these numbers move higher? Will grinding data come in-line with expectations around 1.5-2%? The cocoa market has created more questions than answers over the past week. To add to the confusing equation, demand in cocoa has been lacking, but suddenly traders may see a boost – this will be dependent on the currency trade as well as corporate news – Barry Callebaut plans on expanding some locations which could mean demand is anticipated to grow. Technically, the market is weak and a break lower, around 2500 is realistic looking at the July chart. The market will take a wait and see approach until traders can obtain some solid fundamental news.
Cocoa Jul ’18 Daily Chart