Pressure On Cocoa Prices Continues Due To Covid-19 Restrictions

April 9, 2021 11:55 AM
Cocoa Report

Cocoa Report

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

Source: Tradingview

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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