Softs

Uncertainty in the Global Markets Have Cocoa Traders Waiting

Posted 05/31/2019 7:32AM CTPeter Mooses

Due to the uncertainty in the global markets, many cocoa traders are taking the wait and see approach. With trade tensions stemming from the U.S. and China talks, the futures markets, specifically the softs and grains, are being affected. Unlike the grains, cocoa is consolidating. Many other markets have seen volatility, but the soft has decided to do the opposite. With demand weakening, and Asian demand potentially being weaker due to the unknown, some traders are staying on the sideline. The pound and euro are also causing this recent trend as well. The chart is showing that small pullbacks could be good buying opportunities. We are seeing higher lows and tightening on the chart. If consolidation continues, a breakout is due. With a potential new range in the July contract of 2430 to 2480, 2500 is insight again. If this resistance could be broken and bullish demand news breaks, look for new highs in cocoa.

Cocoa Jul ’19 Daily Chart

Cocoa Jul '19 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.