Looking For More Upside In Cocoa Futures

September 6, 2019 09:25 AM
Monitor the 2280 key level in the December Cocoa contract
COT data coming out after today’s close
British Pound strengthened, providing a push for cocoa prices
Cocoa Futures Update

Cocoa Futures Update

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.

Cocoa Geopolitical

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.


Money Flows

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.

Source: Tradingview

If you are interested in discussing futures or the soft commodities further contact pmooses@rjofutures.com




About the Author

Peter Mooses is a commodity broker at RJO Futures. He enjoys the analytical aspects of futures trading and appreciates the economic impact that commodities have across all markets. Peter utilizes market analysis and trends to help clients achieve a balance between risk and return, while always keeping their investment objectives top of mind. Follow Peter on Twitter @PMoosesRJO