RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Cocoa has been on a steady decline since the start of the month. As more vaccines are administered, the globe will get a better idea of when we can get back to “normal.” For now, Covid cases are on the rise in certain areas, shutdowns continue, and employment concerns are very relevant. Fundamentally, cocoa has been one of the hardest hit commodities of late. Adding and removing shutdowns have created volatility in cocoa. The recent pullback in the May cocoa can create opportunities for traders. Clear support in on the chart and a reversal may be forming. Looking to buy further out calls in the September contract – an increase in demand in the summer months could help this idea. Also, a strengthening Pound will help traders find a direction of the market. Of late, the NY cocoa versus the London cocoa has also been something to watch.

As we move into the 2nd Quarter, monitor cocoa’s key growing regions and what production numbers come in at. Weather will play a big factor in the coming months, hot, dry heat can hurt the crop and also boost the futures prices.

Cocoa May ’21 Daily Chart
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Peter Mooses

Senior Market Strategist
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.
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