Market Analysis

The current cocoa trade could be broken up between short-term and long-term outlooks. Global equities have caused short-term trade to be volatile.  
U.S benchmarks reversed early gains yesterday and the S&P finished more than 1% from what is now a psychological ceiling at 2900. We noted here in the first half of the week that nothing ultimately changed from Friday’s news of fresh tariffs escalating the trade war.
Daily ranges have started to narrow as market participants search for new news. Market participants will continue to keep a close eye on weather as cooler temps work through the Midwest. The risk of an early frost still lingers in the back of our minds.
Despite predictions of new supply overwhelming an oversupplied market, the reality may actually be the opposite. New supply has already been priced in with spreads and backwardation in the crude curve, suggesting a market that is tightening.
Crypto is lower with every coin in the Top 20 red. In spite of the correlated move, volumes remain light and in the range of 50% of the 30-day average on most major exchanges.
Futures put in their low early in the session, then proceeded to march higher over the course of the trading day. Second-tier economic numbers didn’t do much to influence direction. Once again the market was more in tune with trade war rhetoric than economic data.
December corn futures tried but failed miserably to work higher on the back of positive news regarding trade with Japan, cooler weather, and the Pro Farmer crop tour findings.
U.S benchmarks are clinging to yesterday’s recovery, but trade war uncertainties persist. We maintain the belief that this market is not thriving on bad economic news anymore, in fact, we believe recessionary-like data will encourage selling.
Oil prices are getting bounced around on conflicting reports about late-night Chinese phone calls and the possibility of talks with Iran.
Crypto is mostly higher today. Volumes in the space were abysmal over the weekend with Bitfinex at times trading ~35% of the 30-day average.