Same story, different day for cocoa futures. Lack of demand continues to pull cocoa prices lower. The chart looks bearish, and short-term outlook for demand is bleak.
Cocoa futures have found support at lower and lower levels this past week. Although the global vaccine rollout has been somewhat promising, issues overseas have caused concern in the markets. Lockdown measures are still in place in some areas as Covid-19 cases rise again, continuing to hurt any chance of a recovery in cocoa prices.
European demand has been weak, and chocolate companies continue to report weaker earnings. Continue to monitor prices in the currencies correlated to cocoa, specifically the Euro and Pound.
For now, traders should follow the technicals. If cocoa finds a bottom on Friday’s trading day, look for a short-term bounce to start the week if the COT data is positive.
May Daily Chart
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