Softs

U.S. Elections, Supply & Demand, and Techincals Lead Cocoa Futures News

Posted 11/08/2018 7:32AM CTPeter Mooses

A day after the U.S. midterm elections, equities rallied and commodities had a mixed tone. Softs traded mainly off their own fundamentals and technicals. The pound moved higher as the dollar weakened. The demand outlook for cocoa continued to gain strength as supply news in cocoa also continued to support the market. West Africa is showing lower production outputs while increasing demand data. Cameroon cocoa production and exporting could be affected in the short-term due to unrest and safety issues that their government has had to intervene in. This news could also provide additional support and help the futures push above 2400.

Technically, the market is overbought, but if the fundamentals continue to be the front story, look for new highs to be made. The roll to March could also give us some direction if longs stay in the market. A break above the 200-day moving average will also be a bullish indicator.

Cocoa Dec ’18 Daily Chart

Cocoa Dec '18 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.