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