Cocoa futures have been trading around 2500. After the lows we saw earlier this month, cocoa futures have been able to rally slightly despite renewed fears of Covid lockdowns. As the Omicron variant spreads and the medical world tries to figure out next steps – commodities have been volatile.
On the cocoa side of the equation, supply issues could be what this market needs to get and trade above 2600 in the March contract. Many areas of the cocoa world are coming in with lower production estimates. Weather premium could also still boost prices as well. If demand can increase in the coming weeks and months, these factors could be just enough to carry the cocoa bulls higher. COT data will give us an idea where trader’s heads are at as we approach year end.
For now, traders should take a cautious approach as the Fed announcement earlier this week gave us an idea of what the next two years could look like. The ECB changing its course of action has also affected the markets and potentially the longer-term moves in their system.