Cocoa, Covid, and Candy Sales

August 7, 2020 09:42 AM
How will cocoa demand look with no school and no trick-or-treating
Cocoa prices may be turning around
Key growing regions have reported lower rainfall totals
Cocoa Futures Update

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As the summer starts to come to an end, we look ahead to fall activities and holidays. Will the demand for cocoa be down due to Covid-19 and classroom closures? What will Halloween look like in the U.S.? All these unknowns have investors guessing on what earning will be for the major chocolate/food companies. If data comes in better than expected look for the cocoa recovery to continue.

Demand has been the weak link for cocoa prices, but now it may be turning around slowly. Production news has been coming in bullish, technically cocoa continues to close above the 200-day moving average and the currencies are supporting this recent move as well.

Weather premium may also come into play supporting these new prices in the futures as key growing regions have reported lower rainfall totals. Traders should monitor the charts and resistance at 2585 in the short-term.

September Daily Chart

Sept daily Cocoa futures chart
Source: Tradingview

If you are interested in discussing the soft commodities 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