Cocoa futures hit a 6-month low this week as weakness in demand continues. Outside markets and possible supply issues stopped that dip from becoming any worse. The Euro also made a nice recovery helping support cocoa prices in the short-term. Cocoa’s chart is still looking to find real direction, but this may take months to occur. Look for volatility through the spring and summer months as areas of the world continue to ease their Covid restrictions.
If the vaccine process continues at the pace it’s been at, many chocolate companies are hoping for positive purchasing data heading into Q3 when these companies can usually capitalize on the holiday season approaching October through year end. Halloween chocolate sales are a good indictor of where the US is at with consumption outside the pandemic. In the meantime, continue to look for the macro data to guide traders, followed by the currencies correlated to cocoa – until demand can really recover, prices are set to trade in the 2400-2500 range.