Softs

Global Economic Slowdown Could Weaken Demand For Cocoa

Peter Mooses
March 13, 2020 12:25 PM
Look to see if 2425 holds and if the cocoa futures
Demand for chocolate could take front stage for cocoa futures
Traders eye how virus will change consumer demand
Cocoa Futures Update

Cocoa Futures Update

Cocoa Futures Move On Global Demand Slowing

As we continue volatility in every market, cocoa continues to move lower. As the May contract tests lows put in at the end of 2019, demand for chocolate could take front stage for cocoa futures.

As the NBA, NHL, MLB and most other professional and minor league sports and teams postpone play until further notice due to the Coronavirus, cocoa could be one of the futures most affected. Since chocolate is a good indicator of cocoa demand and it’s sold at many entertainment venues, this suspension of play could affect futures’ prices.


Looking Ahead

Each trading day appears to be different as more news breaks daily on the virus. As traders try to position themselves in commodities, a close eye is needed. The fundamentals will control most markets in the near future.

 

Technical Outlook In Cocoa

Technicals will provide guidance on quieter trading days. Look to see if 2425 holds and if the cocoa and global markets can recover next week.

Price Chart of Cocoa Market


Source: Tradingview

If you are interested in discussing 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.