Cocoa bean
Cocoa futures are leading the way today in the commodities complex, up approximately 3.38% today as of this writing. Cocoa farmers along Ivory Coast are concerned about the fungal black pod disease disturbing cocoa crops, along with cool weather hindering proper bean drying. There is not a case of real supply panic at this point, but prices are rallying because of these fundamental facts along with cocoa futures touching up against some very key technical levels. Cocoa futures have been in a $500 dollar range since the beginning of 2012, and currently cocoa is extremely close to the top of this range. Cocoa has held key support at $2,100, and has staged a solid rally since June, making lower-lows and higher-highs since then. We could be setting up for a breakout above the top of the range of 2012's trading action. If this occurs, we look to the next key chart levels at $2,670 and $2,823 as upside targets and resistance levels. We see the first major support level at $2,380, so we will be watching this level closely.
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We are also watching the silver market, as the bulls maintain control over silver futures and today silver is up another 1.58% as of this writing. This is silver's sixth positive day in a row, and as we noted in our recent analysis, silver looks to have broken out of a multi-month downtrend. We also note that since September 2011, silver futures have been carving out a range between $26 and $37. Now that silver has been rallying above its key pivot level of $29, we consider that silver might be headed to the top of its recent range toward the $36 level of potential resistance. It looks like further promotion of the possibility for increased stimulus by the US Federal Reserve has stoked the buying of precious metals, with silver leading the way today.
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