RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Softs

Technical Trade Taking Over in Cocoa Futures

Posted 01/14/2022 8:27AM CTPeter Mooses

Traders have been leaning on technical information to trade cocoa futures. With the recent leg up, March cocoa appears to be headed towards 2640. Key resistance levels have been broken, most recently, 2560. COT data shows a short position that may be weakening.

As for the fundamentals, there are a few developing stories that should boost cocoa prices higher in the coming months. Production issues in Ghana will support this current move higher. Ghana is well behind last year’s pace and it appears that things can only get worse.  Milder weather in key growing regions have thrown off production numbers.

Grinding data is around the corner, next week we will get Europe’s numbers from the fourth quarter of 2021. This paired with current currency volatility will likely lead to cocoa prices edging higher.

For now, traders should continue to keep a close eye on the charts and wait for the fundamental stories to develop.

Cocoa Mar ’21 Daily Chart

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.