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Time to Buy Cocoa? | RJO Futures

Posted 03/29/2017 3:13PM CT | Peter Mooses

Chairman of the regulator Cocobod said Ghana has run out of funds to buy more cocoa. Their loan of nearly $1.8 billion is almost gone to get them through the season. This means that although they are the second largest producer of cocoa, they do not have the financing needed for the remainder of the production year. This comes at a time when the futures market tried to rally to 2200 but failed. Crop concerns came up: were pods damaged as they sat at ports waiting for buyers? Demand was coming back into the long-term picture. This news stopped the recent rally and has the short-term trade in question. On a chart, it looks like the market has a reason to be trading around 2200 and if fundamental news can turn around, 2600 is the next level of attraction technically for the July contract. Key levels had recently been met and broken, 2050, 2080, 2100…but now holding above 2080 is a must.

 

July Cocoa 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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