Cocoa December Futures – Friday Rebound but 2280 Resistance Holds Strong
After four positive trading sessions this week in the December Cocoa futures, the contract took a pause and pulled back to the 2230 support level Thursday. Although most signs point to the potential of more upside, 2280 provided resistance technically. During Friday’s morning trading session, we saw this level hold again.
Demand seems strong after the European and Asian markets moved higher this week. With China trade talks seemingly back on, the US equities also rallied.
Brexit talks have added volatility to the currencies. The British Pound strengthened, providing a push for cocoa prices.
Production levels in the new calendar year will be monitored. It’s apparent a global deficit is on the horizon for the next calendar year. If this turns out to be the case, prices will be supported.
Weather for Cocoa Growing Conditions
Current weather conditions could affect the longer-term output as well. West African weather fronts are supposed to produce substantial rain over the next week. Ghana and Nigeria are already dealing with the disease in their crops, more rain could add to the damage.
COT data coming out after today’s close could provide some insight into how traders are positioning themselves as we head into the final quarter of the year.
Cocoa FuturesTrading Levels To Monitor
Monitor the 2280 level in the December cocoa contract, if this is broken, look for 2350 to be the next level of resistance. A gradual climb technically, led by the fundamentals will be needed to see cocoa prices reach July’s highs. If this current move fails to go into next week, support is at 2170, which could break August’s lows if this is tested.
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